Buyers’ and sellers’ markets: what’s the difference?

October 9 2022 | Admiralty Law

Those involved in real estate transactions will often hear that it is “a buyer’s market” or “a seller’s market.” Sellers generally understand that it’s good news if it’s a seller’s market, and buyers know it’s good news when it’s a buyer’s market.

Conversely, it can be more challenging if a buyer is looking for a property in a seller’s market or vice versa. Real estate transactions don’t always happen at the most opportune time, but certain strategies can help minimize the pain or close the deal. Below are some issues to weigh in evaluating the market and determining the best course of action.

A buyers’ market

Every market is different, but sellers have less leverage in the buyer’s market. Common elements include:

  • There are many similar properties for sale in the same area.
  • The number of properties for sale exceeds demand.
  • There are properties in the area for the same price with a better location or more amenities.
  • There is a shortage of serious buyers.

Concessions can involve providing additional incentives, lowering the asking price, or otherwise sweetening the deal to make that property stand out from the others.

A seller’s market

Sometimes the seller needs to wait for the right buyer in a hot market:

  • There is not a lot of inventory and many serious buyers.
  • Aggressive buyers may bid over the asking price or counter other offers.
  • Desirable properties move quickly.

Other details that strengthen the seller’s hand include selling a property that is well maintained, updated and stands out as unique from others in the area. It may be best to wait for the right offer in these circumstances. They can also try to start a bidding war by offering the property as a good deal.

The signals are not always easy to read

Real estate prices and appraisals will vary from person to person, even when experts do them, which means disagreements among realtors, lenders and others involved in the transaction. Considering the amount of money involved in these deals, buyers and sellers find it wise to discuss real estate deals and negotiation strategies with a local real estate law attorney who understands the market. They can help identify good deals from bad, and they even identify legal issues that will hold up the transaction.


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