You may have heard these terms before and not realized what they meant. A Buyer’s Market sounds like it favours buyers, but what exactly does that mean? How does this affect you as a seller? Read on to find out the difference between a buyer’s market vs. a seller’s market and which market Ottawa is currently sitting in.
The terms “buyer’s market” and “
In terms of supply and demand, a buyer’s market happens when the supply exceeds the demand. This gives buyers more opportunity when negotiating. When the demand exceeds the supply, the sellers have more opportunity when negotiating. To do this correctly, you need an experienced Realtor representing your best interests.
In a buyer’s market, homes typically will be on the market longer. Which gives the impression to buyers that the sellers will be more cooperative. This is why checking out the days on market for a home is important. In these situations, the buyer can work out a strategy with their agent to get the best price possible. When there is a ton of inventory on the market, buyers have choices and take longer to make a decision. Buyers feel as though there will always be something better around the corner which exasperates the situation. In a buyer’s market, the buyer typically has the upper hand.
Opposite to the buyer’s market, a seller’s market happens when there is a shortage of homes available to the public. In a seller’s
Given the right environment and strategic planning, you may be able to plan for a multiple offer situation. There are times when the market moves so fast that multiple offers are inevitable. When an offer is received, a good Realtor will call every person who has viewed your property to see if there is further interest. This creates a sense of urgency on buyers who have fallen in love with your home.
On the buying side in a multiple bid situation, it is important that your Realtor calculates the value of the home prior to you placing your bid. They should also calculate the maximum amount that you are able to offer. This depends on several factors including how long you will be living in the home. Most homes that go into multiple bids are either priced below or very close to market value which creates the perception of a better price. Your Realtor should give you a few different scenarios so you can pick which you are most comfortable with. It’s all about making an educated decision. A strategy that is sometimes effective is writing a “love letter”* to the homeowner.
If you find yourself in a multiple offer situation, you may not have the budget to throw an extra $10,000 onto your offer. You could write a “love letter” to the seller. This tactic does not always work, but once in a blue moon, it does.
Selling your home is an emotional time and if the seller has spent a significant amount of time in the home, they don’t want to sell it to just anyone. They want the right person. This is your best case scenario to write a love letter. Your letter should be heartfelt and emotional. You should never write a letter than exceeds more than 1 page, as the seller probably won’t read it. Things you could talk about would include: your family, reasons why you love the house (get specific), how you can picture your life in the house, and how purchasing this home would change your life. Add a couple of photos of your family to go along with your letter. Sometimes, these letters will pull at the heartstrings of the homeowner and they may even choose your offer over someone else who brought in an offer with a higher price. It all depends on the seller’s situation.
Within the city, we are currently in a Seller’s Market. There are too many buyers and not enough inventory. Normally you could combat this type of market by moving farther outside of the city, however, rural properties are experiencing a similar amount of activity. As a buyer, your best defence would be to have a strategy with your Realtor for the best possible outcome. As a seller, it’s not just champagne and roses. It’s crucial to have the proper game plan in place. You need effective marketing to ensure you are not leaving any money on the table.
If you are thinking of selling your home, now is the time. The Susan and Moe Team use strategic planning, a unique marketing approach and have proven results.
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Call us today for assistance in navigating through this challenging market.