Everything You Need To Know About Housing Seller’s Market

The housing market refers to the demand and supply for houses in a particular country or region and its key element is house prices and trends in house prices. This pricing fluctuation is controlled by the buyers and sellers of the housing market.

The key features of the housing market that can bring volatility in this market are:

– Demand and supply of the houses

– House prices

– Rented sector

– Government interventions in the housing market

– Mortgage industry

– Interest rates

– Economic growth, unemployment rates and income

– Population and demographic trends


Seller’s market

 A seller’s market arises when there is a shortage of supply, and demand exceeds the supply. In this market, the sellers are at an advantage because there are many interested buyers but the real estate inventory is low.

In a seller’s market, the homes sell fast and buyers compete to score a property furthermore; the buyers will spend more and sellers get to raise their asking prices. In this condition, buyers hardly have any power to negotiate the prices which lead to bidding wars.

A bidding war is a situation where the competing buyers make attractive offers that are beyond the listed price, hoping to win the house.

 Tips for the seller’s

If you are wondering how to buy a home in a seller’s market, these below-listed tips will help you with that. There are certain tips that sellers must keep in mind when the market is in their favour:


Everything You Need To Know About Housing Seller’s Market


Organized and clean house

Make sure the property for sale is in good condition and has been organized properly before you market the house. No buyer will bid on something that isn’t worth bidding for.

Fair pricing 

Even though the market at this point is in your favour, you need to make sure that the house is fairly priced. There is a term used in the housing market called the Fair market value which is the predetermined price agreed between a potential buyer and seller and you need to make sure that the asking price is at or slightly below the fair market value. This way, you will attract more buyers and will encourage bidding war.

Carefully review the offer 

During the seller’s market, the seller’s primary focus is on choosing the highest offer and in this process, they cannot examine the financial capacity of the potential buyers. You need to be sure that the buyer has the financial strength to pay the amount as promised. You need to check the source of the funds and the authenticity of the source.

One more thing that you need to take into consideration while accepting an offer is that the offer is not unrealistic. If by any chance the deal fails, you will lose your negotiating power and the power will end up in the buyer’s hand.


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 Pre Approval

When you conduct a financial capacity of the buyers, also check if their loan is pre-approved. This is because preapproval of a loan requires verification of the buyer’s financial history and credit score, which is ultimately an estimation of the buyer’s finances. If the loan is pre-approved, you don’t have to worry about the buyer’s financial status.

Predestine contingencies

Check out the offers contingencies which include stipulations on mortgage contingency, home sale contingency, appraisal contingency, and inspection contingency. It is important that these contingencies are discussed and determined because it may enable the buyers to back out of the sale contract if conditions aren’t met.


Key signs of a seller’s market

There are certain signs that will help you determine if the housing market is inclined towards buyer or seller.

 High priced properties

When the demand for the property increases, multiple buyers compete to gain a house, which leads to bidding war which gives strong bargaining power to the sellers. This power leads to the fixing of higher prices of the homes. So, if the properties on sale have comparatively higher prices as compared to the previous period, it means that it is a seller’s market.


load image Housing Seller’s Market


 Lack of supply

An increase in demand and a decrease in supply means fewer homes to sell at a period. This scenario means it’s a seller market because in the seller’s market the houses sell faster, leaving a few houses available for sale. An easy way to determine the market inclination is by comparing the number of houses available for sale in this period as to the number of houses sold in the previous period.

Bidding wars

One of the most important steps of buying a home is making an offer for the property you want to buy. A bidding war takes place when multiple interested buyers make offers in the same house, and the final decision in on seller about which offer to accept. During this war, buyers make competing offers which drive the prices up, which is typically above what the seller has offered. This situation arises when it’s a seller’s market. 

Faster sell of homes

Seller’s market means higher demand and limited supply of properties in a specific area. In this scenario, homes sell faster than compared to the buyer’s market because of the limited options available and lack of options to choose from. Therefore, buyers even end up compromising with regular homes. This situation only exists in the seller’s market.



 Seller’s market is a market where the demand of a product exceeds its supply, and this imbalance is an advantageous position for a seller as it leads to negotiating better deals from multiple interested buyers. In the real estate business, unique properties can always crack better deals and get favorable prices. But in the seller’s market, the buyers are in a rush to lay their hands on property as there are chances that another buyer might end up purchasing the property if they take too long.

There are various factors that drive a housing market towards a seller’s market. Season is one of them as more properties are sold during summer because homeowners dispose of their property during summers. The other reason that can create a seller’s market is investment growth.

This means that cities with higher employment, suitable business environments and growing populations have high demand and limited supply for the homes.

Ultimately, everything is determined by the market force and economy of a country. If the country is growing, people invest more on properties and if the GDP is not doing well, there will be any fewer investments taking place

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