It has been a seller's market for so long, now buyers can finally start to win! Here's why!

/

What Is A Buyer’s Market?

A buyer’s market occurs when supply exceeds demand. To put it another way, real estate inventory is available but there’s a shortage of interested home buyers. These conditions give buyers leverage over sellers because when supply is higher and demand lower, the market is forced to respond.

In a buyer’s market, real estate prices decrease, and homes linger on the market longer. So, sellers must compete with each other in order to attract potential buyers. Typically, sellers will drop their asking prices to gain an advantage in the market. Furthermore, they are much more willing to negotiate offers to prevent buyers from walking away.

Tips For Buyers

A buyer’s market is the ideal time to purchase a new home because prices are lower and there are fewer buyers to compete with. Even with the higher rates, if you pay less for the home overall, you are still winning!

  • You can take a bit more time. During a buyer’s market, you can take a bit more time to make decisions because there’s less of a concern about losing out on a property you’re interested in. Gone are the days of every listing selling within a day or two of hitting the market. That being said a well priced, well cared for home will still go quickly, so waiting too long is ill advised.

  • Know what’s available. See as many properties as possible before making an offer. Knowing what’s available on the market is highly beneficial, because it will not only help you ensure that you find your ideal home but also afford you a greater ability to negotiate price.

  • Analyze comparable properties. Becoming familiar with comparable properties (comps) on the market is key to negotiating effectively. By analyzing comps, you can use their pricing to your advantage. On top of doing the research yourself, a real estate agent or REALTOR® can help you analyze comps based on up to the minute market trends.

Let’s say you’re interested in a three-bedroom house with an asking price of $700,000. If you find that there are a dozen similar three-bedroom homes priced at $550,000, you know the house is likely overpriced in the current market.

  • Pay attention to days on the market. The longer a home has been available, the more power you’ll have negotiating for a lower price. Even if you don’t ask to lower the price significantly, you can still negotiate for contingencies, seller concessions and repairs.

Tips For Sellers

If you find yourself selling your home during a buyer’s market, do everything you can to make yours stand out.

  • Make some needed repairs. Since there are more properties for buyers to choose from, you’ll find that they can be pickier. You’ll want to do any necessary repairs before putting your home on the market and consider making minor improvements.

  • Clean and depersonalize your home. Spend a lot of time considering how others will view your property. If buyers can’t envision themselves living in your home, they won’t make offers. So, do a deep clean of your home, get rid of any clutter and touch up your landscaping in preparation. As you clean and stage your living space try to depersonalize. Don’t display too many family photos or souvenirs which can make it hard for buyers to picture themselves there.

  • Market it like a pro. Your marketing will matter even more than it would in a neutral or seller’s market, so make sure you have stellar, professional photos taken of your property. If your home will be vacant or your decor is dated, it’s a good idea to hire a stager. With the assistance of a professional, you’ll be able to transform your rooms, so they look cohesive and polished.

  • Price it competitively. It’s crucial that you ensure your home is competitive by pricing it to sell. Survey similar homes on the market to see what they’re asking. Make sure your list price is either on par with or lower than the comparable homes in your area. And when you do get an offer, make sure that you judge it fairly. Since you have less power to negotiate, you should consider offering to pay a portion of the closing costs and for any repairs requested.

Article by Rachel Burris of Rocket Mortgage, published October 13, 2022.