One of the key things you need to know when buying or selling a home is: What type of market are you in? Is it a buyer’s or a seller’s market? The answer to this question will help you manage your expectations when selling and properly submit offers if you are looking to buy.

The terms – buyer’s market and seller’s market – refer to the supply and demand of real estate at that time.

In a buyer’s market, there is more supply than demand. Multiple properties are sitting on the market waiting for buyers.  Buyers are at an advantage in this market.

In a seller’s market, there is more demand than supply.  This can also be referred to as an inventory shortage. There are more buyers trying to buy the few properties available. Most major housing markets, including Jacksonville, are experiencing a seller’s market right now.

The easy way to remember this is: you want to be whatever the market is called.  For example, you want to be the buyer in a buyer’s market.  You want to be the seller in the seller’s market.

In a buyer’s market, you will see these indicators:

– High Days on Market

– Properties are selling For List Price

– Closings are Low or Decreasing

– More than 6 months of inventory on the market

In a seller’s market, you will see these indicators:

– Low Days on Market

– Properties selling for Full List Price or Over

– Closings are Increasing

– Less than 6 months of Inventory

If it is a buyer’s market, sellers need to properly prepare and price their property. There is a lot of competition and you do not want to lose buyers. You will also need to be prepared to make concessions. For example, a buyer may ask you to pay for some of their closing costs. Denying little requests like those may cause you to lose the deal.

Buyers, on the other hand, can be aggressive in a buyer’s market. A buyer can try low ball offers and aggressive negotiations. Obviously you need to be reasonable though.

If it is a seller’s market, sellers should expect going under contract quickly sometimes even before your property hits the market. Bidding wars, or multiple offer situations, will also be very common in a seller’s market.

Speed is a buyer’s best friend in a seller’s market. You need to tour the property the day it lists and submit your best offer right away. Don’t mess around with your offer. If you are submitting an offer, it is likely someone else is as well.  There are not enough properties to go around.

Knowing the market is vital when making real estate decisions.   I hope this video will help you buy or sell real estate effectively.