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Buyer's Market Versus Seller's Market: What's the Difference?

Posted on Apr 04, 2019 by Earl Raatz

Buyer's Market Versus Seller's Market: What's the Difference? Featured ImageYou have probably heard the terms "buyer's market" and "seller's market" before. While you probably have at least some idea what these terms mean, it pays to understand how these market conditions can affect you when buying or selling a home. It's not all about supply: whether there are more buyers than there are homes or vice versa can affect home prices, negotiations, how long it takes to get an offer on a home, how a home should be marketed, and much more.

Click Here to Discover the Pros and Cons of New versus Resale Homes!

Here's what you should know about key differences between a seller's and buyer's market and how they affect you when you're buying or selling a home.

Buyer's Market Versus Seller's Market: What's the Difference? House ImageUnderstanding a Buyer's Market Versus a Seller's Market

These terms are used to indicate the current market conditions in your area. In a balanced market, there are about the same number of homes for sale as there are buyers. In this type of market, offers tend to be reasonable and near list price and homes sell within a reasonable amount of time.

In a buyer's market, there are more homes than there are buyers. Buyers will usually spend more time looking for a home because they have plenty of options and can afford to be choosy. Home prices may be stable or they may drop in a buyer's market. As a seller, you won't have as much leverage when negotiating and you can expect your home to take longer to sell.

In a seller's market, there are more buyers than there are available homes. This causes home prices to go up and often leads to bidding wars or multiple offers. Homes tend to sell very quickly. Sellers have negotiating power and only strong offers are likely to be accepted. If you are a buyer in a seller's market, you can face stiff competition and difficulties getting a conditional offer accepted. Your home search may take longer than you expect.

Now let's look at how different aspects of buying or selling a home change depending on the market.

Time on the Market

How long it takes a home to sell will depend on two primary factors: whether the home is priced properly and whether it's a buyer's or seller's market. In a seller's market, inventory is low and homes tend to sell quickly. If you are trying to sell your home in a buyer's market, it may take more time. Rather than receiving multiple offers within the first week or two, you may wait months for a solid offer.

If you're selling a home and you can afford to wait, it may be better to wait for market conditions to change to get a better value for your home and avoid languishing on the market. If you're a move-up buyer, you will need to consider how long it will likely take to sell your home before you make an offer on another home. In a seller's market, another seller may accept an offer contingent on selling your home. You may feel more comfortable making an offer on a new home before your current home sells in a strong seller's market. In a buyer's market, you may not find someone willing to accept your offer if it's contingent on the sale of your house.

Buyer's Market Versus Seller's Market: What's the Difference? Negotiating ImageNegotiating

One of the biggest differences between a buyer's and seller's market that you should be aware of is who holds the negotiating power in the transaction. A buyer's market, of course, favours buyers as sellers must wait longer for fewer offers. If you're buying in a buyer's market, the seller is more likely to accept contingencies, come down on the price, or make repairs to the home. In a seller's market, the seller has more power. Because sellers are more likely to receive multiple offers and can expect close to or above their asking price, sellers can be picky and turn away buyers who don't bring the best offer.

Consider market conditions and how much power you will have during negotiations when buying or selling a home. As a buyer, it's a good idea to make your strongest offer first in a seller's market. As a seller, you can probably afford to turn down offers below your list price or with contingencies.


Marketing a home in a seller's market can be quite different than marketing a home in a buyer's market. When the market favours buyers, you will need to aggressively market your home with many strategies like ad placements, open houses, social media marketing, 3D home tours, and professional photography. In a seller's market, you probably don't need to go overboard with the marketing. If your home is listed, buyers are more likely to find and consider your home when options are limited. It's still important to present your home in the best light, however, with good photography, staging, and decluttering.

Buyer's Market Versus Seller's Market: What's the Difference? Agreement ImageExpectations

Buyers always have expectations when buying a home but that can depend on market conditions. In a buyer's market, home buyers expect to have plenty of options and the opportunity to take their time to consider each home they see. Many also expect to find some deals on the market and not face much competition, if any, when they're ready to make an offer. In a seller's market, buyers expect to pay more and have competition — but they also expect a home in move-in ready condition.

Because buyers expect more in a seller's market, it pays to put effort into making necessary repairs and upgrades before you list your home. Buyers know they're paying a premium and they want to see it reflected in the home's condition and presentation. If you're selling your home in a seller's market, don't assume you can be complacent and sell your home with minimal effort, even when inventory is low.

Whether you're buying or selling a home, it pays to consider market conditions and how they will affect your strategy. If you're a move-up buyer, you will need to consider the market from both sides, as both a buyer and seller, to strike a balance between getting the best value from your current home and getting a new home at an affordable price.

click here to discover the pros and cons of new versus resale homes!

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