The Difference Between a Buyer’s Market and a Seller’s Market

The Difference Between a Buyer’s Market and a Seller’s Market

In the real estate market, the scales are often in the favor of either buyers or sellers. Shifts in demand and supply can create either a buyer’s market or a seller’s market. Anyone conversant with the market knows this. Regardless of which side you are on, it is important to know the difference between the two, because it can help you get the most out of your investment.

What Is a Buyer’s Market?

Demand is less than supply in a buyer’s market, making real estate more affordable. This implies that there are many more homes than buyers in the market. This puts downward pressure on the price of properties.

Properties in a buyer’s market tend to remain listed longer before an offer is made and also tend to sell for less. For sellers to close on their properties within a good timeframe, they must price them competitively, because there is less interest from buyers.

Also, it is often cheaper to buy properties in a market; however, there might not be much potential for growth in the short term, if the market does not change to an upward trajectory soon.

How to Navigate a Buyer’s Market as a Buyer

How to Navigate a Buyer’s Market as a Buyer

As a buyer, you have a high negotiating power to take advantage of. Below are some that you can employ to navigate a buyer’s market.

    • Offer less: Your offer in a buyer’s market should be less than the asking price. Sellers may be willing to lower their prices, when they know that you have many options.
    • Ask for seller concessions: Rather than offering less than the asking price, request for some or all of your closing costs to be paid by the seller. Other possibilities may include asking the seller to include some furniture or appliances in the price or asking them to be flexible with the closing date.
    • Ask the seller to complete repairs: It is not often that a home inspection must be carried out before you know that repairs are required. Sellers in a buyer’s market are more likely to make repairs, knowing that it can help increase the value of their property. You must take advantage of this.

How to Navigate a Buyer’s Market as a Seller

How to Navigate a Buyer’s Market as a Seller

You should not allow buyers to walk over you, if you have to sell your property in a buyer’s market. Although the market might be disadvantageous, here is how to deal with it.

Highlight the competitive edge of your property: Look at your property and see what stands out from the competition. These features; or create one, if there is none. You can do this by getting the interior and exterior painted with appealing colors.

Budget for a concession: There are instances in which sellers need to list their property for a particular price, because they want to make a down payment for their next property or pay off the mortgage; however, you may need to plan for concessions when selling in a market in which buyers can ask for help with repairs or closing costs.

Do a pre-inspection: You can make your home more attractive, by hiring an inspector to identify issues and help you fix them before listing. This step will go a long way in helping your property pass the appraisal and inspection process.

What Is a Seller’s Market?

When talking about real estate, a seller’s market is the complete opposite of a buyer’s market. Demand exceeds supply in a seller’s market. This means that it is common for sellers to close on their properties quickly and at a good price.

That a property stays on the seller’s market is often low. Also, unit prices and median home costs tend to be high. Sellers have a stronger negotiating power and will most often not budge on the price.

Furthermore, it is common for properties in the seller’s market to sell above their list price. This is because the hottest commodities are sought by a good number of buyers.

How to Navigate a Seller’s Market as a Buyer

The seller’s market is an exciting time for buyers; however, this period can also induce anxiety. Therefore, you need to go through the process prepared to get the best deals. The following tips will help you.

  • Get ready for bidding wars: Always keep in mind that there could be multiple parties interested in the property you want. Before starting a bid, ensure you decide on a rigid upper price limit, based on the value of the home and within what you can afford.
  • Act quickly: Properties in a seller’s market sell quickly. Stay on top of your desired listings, so you can get the best deal on time.
  • Keep your offer simple: Even though it can be tempting, never waive the appraisal contingency, the inspection contingency or the financing contingency. Keep your offer simple, and only include essential contingencies.

How to Navigate a Seller’s Market as a Seller

As a seller in a seller’s market, you should have a strategy—even if that seems you can sell any property in any condition, because there are buyers already lined up. You must get the best price for your property, and these tips will help you.

  • Your listing should be at market value: The best bet on getting your property sold at a reasonable price is to list it at market value. If it is overpriced, potential buyers can be turned off.
  • Choose the best offer: Even though there may be a bidding war, you should know how to choose the best offer. The one with the strongest finances is perhaps the best offer.
  • Have your new place lined up: You have a good chance of selling your property quickly in a seller’s market. Have a place lined up that you can move into, if need be, before selling.


The real estate markets fluctuate. A buyer’s market today can quickly change to a seller’s market tomorrow. Understanding the difference between these two cycles will help you get the best out of both markets.