So what’s the difference between a Buyer’s Market and a Seller’s Market? Should I care?
Like most professions, real estate has its own vocabulary and to those not “in the business” at times it may seem like a foreign language! There has been a lot of press this spring about a “Seller’s Market” in Indianapolis. What does this mean and how is it different from a Buyer’s Market?
In a Seller’s Market there is a shortage of homes available for purchase, which in turn increases the odds of multiple offers and drives up prices. Just last week the Hoagland Group showed a property in Irvington the 1st day on the market and there were already 8 offers! When sellers have multiple buyers fighting over their property, sellers have the upper hand in the negotiations. They will be expecting a good price and reasonable terms. They may ask buyers for things like delayed closing dates or days of possession after closing at no charge. There is also an increased possibility that a seller will not be willing to complete repairs during the inspection negotiations.
On the other hand, a Buyer’s Market is when there are plenty of homes on the market for buyers to choose from. This allows buyers to be very selective (“picky”) about every feature of a home or neighborhood. Sellers need to have their property staged correctly and in excellent condition if they want to be “the one”! Buyers have the negotiating power. If they can’t come to terms with a seller, they move on to another property and the seller will be left waiting on another buyer.
So a Seller’s Market is great for sellers – right? Yes, most will receive top dollar, however, many sellers are also buyers. Because their home is likely to sell very quickly, they will be under a lot of pressure to find their next property in a matter of days, or do the dreaded “double move”, where they go to temporary housing prior to finding their new place.
Check out this related blog, “7 Things Buyers can do to Win Offers in a Seller’s Market”.