Understanding a Buyers and Sellers Market

 Understanding a Buyers and Sellers Market

Understanding a buyers and sellers market

In today’s fluctuating housing market climate, we will often hear about how people are waiting until the housing bubble pops for them to start thinking about buying a home. Or many people will casually throw around phrases like “it’s a seller’s market right now” or vice versa. 

More often than not, homebuyers (and sellers) don’t know what these phrases entail and will be deterred from even trying to pursue the homebuying journey simply because of the connotation to those phrases. 

Should you understand if your area is experiencing a buyers or sellers market? Will it actually affect you? Let’s chat about it! 

In this blog, we’ll discuss the difference between a buyer’s market is vs. a seller’s market in order to help you identify whether you are experiencing either of these market trends. This will help you gain an advantage by understanding your specific market. 

What is a seller’s market?

When an area sees more demand than supply, that is labeled as a seller’s market. This is when more buyers are looking for homes but there is very little inventory for those buyers. This makes it a sellers market because buyers are more willing to pay higher prices since there are not many options to choose from. Sellers benefit from this, and can sell their homes for a higher amount than normal. 

This is typically when homes sell much faster and buyers must try harder to have their offer accepted, otherwise known as bidding wars. The ability to negotiate will not be an option in a sellers market because the sellers are receiving so many offers above the asking price, so there is no incentive for the sellers to negotiate anything. 

Tips For Buyers

This is your time to shine. You don’t have much time to waste in a seller’s market, so time is of the essence. You’ll need to act fast and be confident in the home that feels right to you. Chances are, if you wait to mull it over to determine if it’s the right house for you, you’ll miss your chance. 



  • Get pre-approved before you start looking. If you find the home of your dreams before you are financially prepared, there will be another buyer already good to go with their loan and ready to buy that dream home of yours. 
  • Know your cards. You do not have the upper hand in a seller’s market. Don’t start to think that you can push contingencies, concessions, specific closing dates or repairs. Be very strategic and focused when telling your Realtor what to include in your offer. You want your offer to be the most competitive and the most attractive! 
  • Make an all-cash offer if you’re able to. The transactions are usually much quicker because you are not waiting on a loan to process and sellers typically prefer this!
  • Don’t overpay. Getting caught up in bidding wars is tricky and you’ll find yourself spending much more money on a house that is not worth that much in a normal real estate climate. Don’t get caught up in emotions, try to keep a level head and know that there will be more chances and other houses. 
  • Don’t settle! Imagine if you were in a buyer’s market, would you even be considering this house? If not, walk away. You don’t want to regret your purchase!


What is a buyer’s market?

On the flip side, a buyer’s market is when supply exceeds demand. In other words, when there are so many houses on the market that are sitting on the market for a longer than normal period of time, and not enough buyers to help with turnover. 

Signs of a buyer’s market:

  • Houses on the market for longer amounts of time
  • For-sale signs inundating neighborhoods
  • A drop in listing prices

In order for seller’s to make their homes competitive, they will need to consider dropping their listing price. Buyer’s will have an understanding in a buyer’s market that they have the upper hand and a huge advantage to get exactly what they want and for much less. If a home is priced too high, buyers will not even take a second look or schedule a showing. If buyers do schedule a showing and follow up with an offer, chances are they will low-ball the listing price in their offer. 

Tips for buyers:

  • Take your time. There is no rush for a buyer while living in a buyer’s market. You have the advantage, so act like it! Calm your fears and anxiety by reminding yourself of the facts of what a buyer’s market is and continue looking at the homes available, broadening your options and dreams.
  • Know your inventory. Keep an eye on what is happening in your market. Be looking at the MLS or Zillow often to keep tabs on the quality of homes that are popping up in your price range, or identifying if your ideal homes are listed at a higher price but end up selling for much less. This will give you valuable information to help you determine whether you should be looking at those higher price ranges, while knowing you have the ability to offer a lower price and still get the quality of house you deserve. 
  • Ask your Realtor to send you “comp” reports often. A good buyer's agent will be well versed in creating comparable reports for their buyers. This will justify or discredit the listing price and give the buyers a better understanding of how much leverage they have depending on their offer.
  • Always look at the “days on market”. If there is a home that looks perfect but it has been on the market for over 60 days, there is most likely an issue that is not being advertised. Ask your Realtor to reach out to the selling agent to inquire about why there is such a high days-on-market. 

Feeling like you need more information? Try out eHome America’s Home Education course to fully prepare yourself and your household for the homebuying process and build a financially wise foundation for when the market is right for you!

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