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Understanding Buyers' and Sellers' Market

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By : Roby Hicks    99 or more times read
It is important that we learn about the different types of market so that we can decide appropriately regarding our home purchases. The real estate industry can be under different state of market. Its state will influence the behavior of the consumers in terms of purchasing properties. We are currently in a buyers’ market. As many would say, now is the best time to make a purchase. But why is that so?

A buyers’ market is ideal for the buyers because almost everything is in their favor. However, this does not signify a good market either because this can be an indication of poor purchasing power of consumers and other underlying problems of sellers. In this type of market, there are a lot of properties on sale but there are only few buyers who are capable of making the purchase. In this type of market, the prices are low. This is due to the competition. Buyers can expect properties to be sold below their market values.

It is ideal to purchase a home in a buyers’ market. One buyer can greatly help the economy improve. Making a purchase is a good idea because of the cheap homes. In addition to that, the buyers have plenty of houses to choose from. They do not have to pick a house they do not like. They can look at foreclosed home and almost new homes sold in different areas. They can surely find a home from their ideal neighborhood. The negotiation will be in their favor as well. This is because more sellers will agree to what the buyers would want. The buyers can make lower offers. They can also ask for better arrangements and deals. There are even sellers who will give you freebies just to ensure that you will pick their home.

Contrary to the aforementioned market, the sellers’ market will be more favorable to the seller. This type of market exists when there are a lot of buyers with fewer sellers. Since this is the case, prices will rise. The sellers will also have the freedom to choose the seller who has the highest offer. It will be difficult to negotiate as well. This is because they are aware that many buyers would make a better offer and would pay more than the market value of the property.

It is not ideal to purchase a home under this type of market. First, the properties are expensive. You do not have a lot of options as well. It would be better to wait for the prices to go down. It might be a better option to rent for a while.

Knowing the market is important because this affects your behavior. If you know that properties are selling at a very low price, then you would be encouraged to make an investment. However, if you know that it will be very difficult to make a good bargain, you would not exert efforts to make a purchase. It is crucial that you know when to buy a property as this is among the most important and most expensive investment you will ever make.
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