Buying or selling a home could be daunting, especially if it’s your first time to do so. But if you’re thinking of either buying one or selling your current house, it pays to know the difference between a buyer’s market and a seller’s market.
Simply put, a buyer’s market is the ideal time to buy a new home or even a nice one that seasoned real estate agents would most likely consider a good deal. That’s because a buyer’s market opens up tremendous opportunities for property seekers and buyers to purchase one at a much lower cost than what you’d normally pay for in a seller’s market. A buyer’s market occurs when available properties for sale far exceed the demand for them, simply because there aren’t enough buyers who want to purchase properties during such time.
Weighing the pros and cons
A seller’s market, on the other hand, is the ideal time to sell your property because there are more property buyers who want to purchase homes on the market than there are properties currently available. And if your property happens to be one of the most sought after – either because of its location or due to a number of factors – a multitude of interested buyers might even try to outdo each other by offering a higher price or a value proposition that you just can’t ignore. As a seller, you could secure a price for your property that’s higher than your listing price. At the very least, you’d at least be able sell your house even at the lowest price that you’d most likely accept for it. In other words, a seller’s market is a wonderful time to sell your home.
So, if you’re planning on buying a home in a seller’s market you need to be aware that you’d most likely be at a disadvantage. That’s because other buyers who might be eyeing the same property that you want to purchase could offer the seller a much sweeter price, or perhaps even offer to buy the house outright if the buyer is awash in cash. You would be in no position to bargain for a lower sale price and could lose the opportunity to buy the property against someone who could easily make a higher offer. For this reason, property agents sometimes refer to a seller’s market as a renter’s market because potential buyers need to keep renting until they can save enough money for a higher down payment and compete with other buyers in the market.
But if you’re toying with the idea of selling your property, it might not be a right one to make such a move in a buyer’s market. The property that you’re selling would most likely remain on the market longer than you might expect before you’re able to find a buyer for it simply because there’s a large number of available properties for buyers to choose from. And if you really need to immediately sell your house, you may have to lower your listing price or make other concessions if you want to secure a buyer.
Season and location
Just like in other countries, the Philippines’ real estate market, even if it has been experiencing a remarkable growth rate over the last several years, goes up and down from time to time. In the United States, for instance, its property market fluctuates depending on the season. More homes are usually for sale during their summer months, which is between June and August, than any other time of year. That means that it could be a seller’s market in the winter but a buyer’s market in the summer.
The areas or locations of real estate properties also play a role on whether it’s a buyer’s market or a seller’s market. If you live in a metropolis where there are a lot of available jobs and growing industries, expect that area to be a seller’s market most of the time. Those areas with struggling economies, on the other hand, would often be a buyer’s market.
Another way to find out if the house you’re eyeing at in a particular area during a particular period is a buyer’s market or a seller’s market is to look at the inventory of properties there, or the number of homes that are for sale in that district or town. If the inventory is low, it is most likely a seller’s market. If not, then perhaps it’s the perfect opportunity to purchase that dream property of yours in that place that you want to call home.
A property agent knows best
If it’s your first time to buy a home or sell your property, it’s best to engage the services of a professional, seasoned, and trusted real estate agent to do the nitty-gritty transactions for you. That property agent should be able to come up with a strategy that would get you the best deal available, whether it’s a buyer’s market or a seller’s market. If you’re buying, the agent could guide you on what you need to offer to compete with other potential homebuyers, or at least sway the seller to accept a much lower price. If you’re selling, the agent is there to coach you on how to market and sell your property for a much higher price.
Work with an agent you trust, someone who won’t push you beyond what you’re comfortable to offer.
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