How to Buy and Sell in Any Market
You’ve no doubt heard of “buyer’s markets” and “seller’s markets.” What’s the difference between the two, and more importantly, how do you successfully buy or sell a home in either one?
First things first: a “buyer’s market” is simply when there are more homes on the market than there are buyers over a period of roughly six months. Because there are so many homes for sale, not all will sell (at least, not quickly or for the price the seller wants).
A “seller’s market,” on the other hand, is when there are too many buyers and too few homes for sale. The rule of thumb is that if there’s less than six months’ “inventory” of homes for sale, you’re in a seller’s market.
How to buy:
· In a seller’s market: If you’re not in a rush, this is definitely not the best time to buy. Sellers can name their price, with few if any concessions. And they rarely allow for the common contingency of waiting for your home to sell before you buy theirs. It’s best to sit this market out, until home inventory becomes tighter.
· In a buyer’s market: This is absolutely the best time to buy, because you’re in control. Home prices are typically lower (because they’re not selling as quickly). And, you can expect that sellers will be more willing to negotiate, including the contingency that your current home sells first. Don’t be afraid to ask for extra concessions as well, such as the seller paying for a home warranty, inspection or repairs. Happy buying!
How to sell:
· In a buyer’s market: If you can wait to sell, make sure you do. Because when buyers are in control, you can expect offers well below your asking price. You’ll also be expected to make concessions that you’d never consider in a seller’s market (making repairs, covering the cost of a home inspection etc.). And if you agree to the contingency that the buyer’s home sell first (and it doesn’t), then you’ll be taking your home off an already competitive market, with nothing to show in return.
· In a seller’s market: You set the rules including price, concessions, and contingencies. During a seller’s market the difference between your original asking price and final sales price is much lower than it would be in a buyer’s market. In other words, everything is stacked in your favor. Happy selling!