Property practitioners and homeowners talk a lot about "buyer's markets" and "seller's markets, but what do these terms really mean? A seller's market takes place when there are more buyers than there are houses for sale. On the other hand, a buyer's market occurs when there's an excess of homes for sale and fewer buyers looking to scoop one up.
1. Who has the power
One of the biggest differences between a buyer's market and a seller's market lies in the power position. Buyer's markets are more favorable to buyers - more inventory, lower prices - so they have more "power" than sellers. Conversely, seller's markets give the power to the sellers, allowing them to ask more for their homes and even encourage bidding wars.
2. How home marketing works
Marketing a home in a seller's market is a little different than marketing that same home in a buyer's market. In markets that favour buyers, homeowners and their property practitioners have to be aggressive about making a house stand out through social media marketing, traditional advertising and holding show houses. Seller's markets give sellers a little more leeway when it comes to marketing, although too many homeowners make the mistake of neglecting to market in a hot environment. Even in a seller's market, sellers need to present their home in the best light to buyers, using professional staging, proper pricing and professional quality photos.
3. Expectations
In any market, buyers have expectations. In a buyer's market, home seekers expect to find plenty of inventory and even a great deal. In a seller's market, they expect to pay top-money and to compete with other buyers, but they also expect to get a turn-key property for their money. Buyers know they're paying a premium in a seller's market and they want their end-purchase to reflect that. Sellers, in turn, have to offer a home that's worthy of a seller's market asking price. Sure, an "as-is" property will sell in a hot market but the return on investment can be exponentially greater when a home is presented with care. In a seller's market, homes that are beautifully-staged, expertly represented and priced ever so slightly below market rate are the ones that get dozens of offers after only a couple days.
If you're a seller, you're leaving money on the table if you decide not to invest in marketing your home the right way.
