One of the first things every potential home buyer should know is what kind of market they are entering. When it comes to home buying there are two types are markets: a buyer’s market and a seller’s market, let's review some of the key differences between the two, and which one is best for home buyers!
A buyer’s market refers to when the market has more supply than demand, meaning that there are more homes for sale than there are buyers. Some of the best ways to proceed in a buyer’s market includes but are not limited to:
1. Take Your Time: less buyers mean less competition and more options; you have the extra time to weigh the options, take it.
2. Do Your Research: With all your extra time you can be meticulous, find out more about the houses you are looking at through online searches, see how long they have been on the market (sometimes this can be a telltale sign of issues) and even conduct inspections if needed.
3. Analyze Similar Properties: In a market like this you may be able to find your dream home, do not settle for the first house you see, shop around!
4. Ask for Extra: Buyer’s markets can mean extra benefits when it comes to closing time, talk to your Realtor and Loan Originator about things like offering a lower price and incorporating seller’s concessions to the final offer.
A Seller’s Market, on the other hand, is the opposite, demand outweighs supply and there are more people looking for a home than there are homes to sell. Some important tips to note when entering a seller’s market include:
1. Realize the Pros and Cons: While seller’s markets can have added perks like lower interest rates, they also can trigger bidding wars and eager buyers forgoing inspections.
2. Be Prepared: Contacting a Loan Originator for a pre-qualification or pre-approval can increase your chances of having an offer accepted over other house buyers.
3. Act Fast: Houses in a seller’s market can sell in a few days or even a few hours, having a realistic understanding of your must haves and negotiables will set you in a good position to compete in this market.
4. Keep Offers Simple: When placing an offer on a home consider forgoing things like seller concessions, this can help boost the chances your offer is accepted.
Some additional ways to determine whether you are in a buyer’s or a seller’s market is by looking at local housing inventory, sales, pricing, times on the market and national housing trends. Be sure to keep in mind however that housing markets can change from season to season, state to state, and sometimes even zip code to zip code.
The professionals at Homestead Funding are here to walk you through each and every step of the homebuying process. We will work together to assess your specific situation and come up with a plan to help accomplish your home ownership goals. Contact us today to learn all you need to know about buying no matter the market.
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