Buyer’s Market Vs. Seller’s Market: What Does Each Mean For You, And What Is The Current Market State?

Carefully Consider Offers
It’s even more important during a seller’s market that you carefully review the offers you receive. Sellers are often so focused on choosing the highest offer that they fail to examine the financial strength of each buyer. Just because buyers say they’ll pay a certain amount for your home doesn’t guarantee they’ll be able to obtain those funds. Lenders will not allow buyers to borrow more than the assessed value of your home. The last thing you want is to accept an unrealistic offer and be forced to put your home back on the market when the deal falls through. The longer your home is on the market, the more questionable it will seem to buyers, and the more power they will have when negotiating.
Ensure The Buyer’s Mortgage Approval Early On
For any buyers who require financing, you should ensure that they have their initial mortgage approval before you accept their offer. This initial approval requires that buyers’ finances and credit history are verified, making it far more likely they’ll ultimately be able to obtain a loan for a specific amount of money. Prequalification, on the other hand, is just an estimate of buyers’ finances.
Be Aware Of Contingencies
Also, be on the lookout for offers that include contingencies. Offers that include stipulations, like mortgage contingencies, home sale contingencies, appraisal contingencies and inspection contingencies, enable buyers to back out of sales contracts if certain conditions aren’t met.

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How Can You Tell If It’s A Buyer’s Or Seller’s Market?

Before you buy or sell, there are ways to determine if your local area is experiencing a buyer’s market or seller’s market. Here are some indicators that will help you:

Real Estate Inventory

Review the homes currently available on the market. The larger the inventory, the more likely it is that your local area is in the midst of a buyer’s market. Conversely, if there seem to be very few homes being listed, then it’s likely a seller’s market. To get a precise read on the inventory, divide the number of homes currently on the market by the number of homes that have sold in the last month. If the result is above 7, it’s a buyer’s market. If it’s below 5, it’s a seller’s market. Anything in between is considered a neutral market.