With home purchases on the rise in Canada, determining whether it is a good time to purchase or sell can raise some doubts.
It’s exceedingly common for the real estate market to change, and rising or falling interest rates, economic prosperity, and even changes in the population’s size influence these shifts.
How do these fluctuations affect the housing market, and what does that mean if you’re selling or buying a house?
We rarely exist in a state of balance, but it can be challenging to understand what a seller’s market is compared to a buyer’s market.
Keep reading to learn everything you need to know about the differences between the two as well as how to buy a house in a seller’s market, and vice versa.
What Is a Seller’s Market?
When people who want to sell their homes have more negotiating power than potential buyers, it’s called a seller’s market. There are typically fewer homes for sale than there are buyers in a seller’s market. So basically, demand exceeds supply. Since there are fewer homes available, sellers find themselves at an advantage.
Characteristics of a Seller’s Market
Homes sell faster in a seller’s market, and buyers have to compete with one another for the same property. Many people don’t know much about buying a home in a seller’s market and because of this, buyers are generally willing to spend more on a home than they normally would otherwise.
As a result, sellers have the option of raising their asking prices, because of the greater interest, buyers rarely have much bargaining leverage and are more likely to take houses as-is.
Due to the scarcity of homes, these circumstances frequently result in bidding wars. Bidding wars occur when bidders make competing bids, driving up the price over the seller’s initial asking price.
What Is a Buyer’s Market?
When supply exceeds demand, the market shifts to a buyer’s market. To put it another way, real estate inventory is high, and there are plenty of homes for sale, but there aren’t enough buyers to go around.
These conditions provide buyers with an advantage over sellers, since the market is forced to respond when supply is higher and demand is lower.
Characteristics of a Buyers Market
Property prices tend to fall in a buyer’s market, and homes stay on the market for long. As a result, sellers must compete with one another to attract buyers. Sellers will frequently drop their asking prices to get a competitive edge. They’re also more eager to negotiate offers to keep buyers from walking away.
If you’re looking for a new home, purchasing in a buyers market is perfect since you’ll find cheaper prices and less competition when looking for your ideal home.
As a seller, you can increase your chances by making repairs on your house, marketing your property well, and setting a competitive, but fair, price.
Looking to Buy or Sell a Home in Ajax?
Bansal Team has ample experience helping buyers and sellers navigate the real estate market. We can help you buy or sell a home for the most value, no matter whether we’re in a seller’s market or the advantage is with the buyer.
Reach out to us today and let’s work together to get you the property of your dreams.