A seller’s market is considered a “hot” market. This type of market is created when demand is greater than supply - that is, when the number of buyers exceeds the number of homes on the market. As a result, these homes usually sell very quickly, and there are often multiple offers. As a buyer, you need to consider that many homes will sell above the asking price; in other words, you may have less room to negotiate, and may encounter competing offers. Though most buyers want to get a home for the lowest price possible, reducing your offer could mean opening the door for another buyer instead.
A buyer’s market is a slower market. This type of market occurs when supply is greater than demand, the number of homes exceeding the number of buyers. Properties are more likely to stay on the market for a longer period of time. Fewer offers will come in, and with less frequency. Prices may even decline during this period. As a buyer, you will have more selection and flexibility in terms of negotiating toward a lower price. Even if your initial offered price is too low, the seller will be more likely to come back with a counter-offer, so you can begin the process of negotiation.
In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of buyers. When a market is balanced there aren’t any concrete rules guiding whether you should make an offer at the higher end of your range, or the lower end. Prices will be stable, and homes will sell within a reasonable period of time. You will have a decent number of homes to choose from, and may encounter some competition for offers on the home of your choice, or none at all.
The proximity of the home to amenities, such as schools, parks, public transportation, and stores will affect its status on the market. Also, the quality of neighbourhood planning, and future plans for development and zoning will influence a home’s current market value, as well as the ways in which it might change.
The age, size, layout, style, and quality of construction of the building will all affect a property’s market value, as well as the size, shape, seclusion and landscaping of the yard.
Condition of the Home:
This includes the general condition of the home’s main systems, such as the furnace, central air, electrical system, etc., as well as the appearance and condition of the fixtures, the floor plan of the house, and its first appearances.
Examine the selling and asking prices of similar homes in the neighbourhood. Ask your REALTOR® to prepare you a general market analysis of the neighbourhood you’re interested in, so you can determine a range of value for a particular property. A market analysis will provide you with a market overview and give you a glimpse at what other similar properties have been selling for in that area.
Market Conditions/ Economy:
The market value of a home is additionally affected by the number of homes currently on the market, the number of people looking to buy property, current mortgage rates, and the condition of the national and local economy.