subject: The Difference Between A Buyer's Market Versus A Seller's Market? [print this page] These days when somebody asks, "What is a buyer's market versus a seller's market?" 9 times out of 10 they're talking about Real Estate. After all, isn't Real Estate on just about everyone's mind lately? One of the best ways to gauge the state of the economy is to look at the Real Estate market. If it is a buyer's market, that typically means that the economy is down and people are trying to sell their homes to get out from under their enormous mortgages. If it is a seller's market that usually suggests that the economy is good and more folks are looking to invest their extra money in a home. However the most basic answer to the question , "What is a buyer's market versus a seller's market?" is that it comes down to the law of supply and demand.
Typically in a buyer's market there are far more homes available than there are buyers. Meaning that somebody who is trying to sell his home is going to have to work extra hard to make it more attractive to the buyers because of all of the other houses there are to choose from. This typically means that home values are less than normal because of all the competition however you can also do things to increase the market value of your home so you won't need to lower your price.
A fresh coat of paint, some nice shrubbery and landscaping, clean carpet, clutter free closets and garage, new appliances will all help increase the market value of your home. Along with taking care of repairs like plumbing problems, furnace problems and a leaky roof. To sell your home in a buyer's market you do not necessarily need to lower the price you just have to make sure it's worth the price you're asking.
In a seller's market there are more buyers than there are homes for sale and this often leads sellers to believe that they can raise the asking price of their homes to astronomical levels. While you usually can get more for your home in a seller's market simply because there are more buyers bidding against each other, you still have to make sure your home is worth the price you're asking for it. A seller's market means that home market values have gone up due to the supply versus the demand. But market value and selling price are two different things.
The market value of your home is based on average selling prices of other homes in your area and the condition of your home. In a seller's market the value of your home might be one hundred twenty thousand dollars whereas in a buyer's market it might only be ninety thousand dollars. Regardless of whether it is a buyer's or a seller's market if your asking price is well above market value you will have a tough time selling it because people will have a difficult time getting financing due to the asking price being so much higher than the market value or appraised value. So in answer to your question , "What is a buyer's market versus a seller's market?" it really doesn't matter as long as your home is worth what you are asking for it.
