A buyer’s market occurs when supply surpasses demand. To put it simply, real estate inventory is high, and there are plenty of homes for sale, however, the number of interested buyers are low.
These conditions give buyers leverage over sellers because when supply is higher and demand is lower, the market is forced to respond.
In a buyer’s market, real estate prices decrease, and homes linger on the market for much longer. So, sellers must compete with each other in order to attract qualified buyers.
Typically, sellers will drop their asking prices to gain an advantage in the market. In addition, they are much more willing to negotiate offers to prevent buyers from walking away.
Tips for Buyers in a Buyer’s Market
A buyer’s market is the ideal time to purchase a new home because prices are lower and there are fewer buyers to compete with.
Take your time: During a buyer’s market, it’s best to take your time because there’s less of a concern about losing out on a property you’re interested in.
Know what’s available: Look at as many properties as possible before making an offer. Have an understanding of what is available on the market.
This will not only help you ensure that you find your ideal home, but it will also afford you a greater ability to negotiate price.
Analyze comparable properties: Becoming familiar with comparable properties on the market is key to negotiating effectively. By analyzing comparable homes nearby, you can use their pricing to your advantage.
Let’s say you’re interested in a three-bedroom house with an asking price of $700,000. However, your realtor finds comps of other similar three-bedroom homes priced at $550,000, you can make the case that it’s only worth that in the current market.
Lastly, pay attention to days on market: The longer a home has been available, the more power you’ll have negotiating for a lower price. Even if you don’t ask to lower the price significantly, you can still negotiate for contingencies, seller concessions and repairs.