We’re continuing on our series on the opportunities, challenges and difficulties in being a local realtor today with a dialogue on buyer’s markets, seller’s markets and everything in between. The recent Fed news that interest rates are not formally going up before December will continue to have a positive effect on mortgage interest rates. This creates a great environment for realtors to excel.
“Global definitions such as ‘buyer market’ and ‘seller markets’ need to have an adjustment in the realtor community’s mindset,” commented Gerard DiRuggiero, Principal Broker of UrbanLand Company. “These are great definitions and terms to use if you’re an analyst or in the economics business looking at macro trends. Realtors who want to complete as many individual transactions as possible need to subscribe to different concepts and focus in on the negotiation and terms of each deal. Otherwise, you potentially face getting stuck as a realtor with a buyer or seller that has their own slanted perceptions that makes your deal impossible to complete.”
Here’s the traditional definition of a Buyer’s Market in real estate, straight out of Google.
The market favors buyers when home prices are relatively low and there are a large number of homes available at a given time. Some real estate agents and analysts use a six-month sale as the base level for naming housing markets. When most homes take more than six months to sell, it is a buyers’ market.
Here’s the traditional definition of a Buyer’s Market in real estate.
A seller’s market is just the opposite. The demand is larger than the supply. People have more money to spend on real estate, so sellers will often see several buyers competing to buy their property, which drives up the price. This means that buyers will have to spend more to get what they want. This is the ideal situation for sellers because they get a great price on their homes.
“These blanket statements and broad terms are barriers to getting transactions done for realtors. Perception equals reality in the minds of your buyers and sellers,” continued Gerard. “When you have concerns about buyer’s or seller’s markets clouding the judgement of your clients, homes do not list, offers do not submitted and transactions fall apart before they begin or during the offer and negotiation process.”
Here’s some ways to really think about market definitions and how they affect your deals and commission flow.
Every single deal you’re doing is stuck between seller market and buyer market perceptions until settlement is complete. If you’re the seller, you’re in a Buyer’s Market where the buyer is “right” and holds the keys until they are satisfied. If you’re on the homebuying side, you’re stuck in a Seller’s market until they’ve finished saying yes or no to your demands. Either way, the deal doesn’t complete until everyone involved is “right” and happy. All these factors contribute to creating a REALTOR’s market.
Agents, you hold the real keys to getting deals done! Buyers and sellers WANT to get their transactions done during periods of low monthly mortgage payment costs and high-ish DC and Maryland prices. It’s up to you to manage your buyer and seller perceptions and expectations about market conditions for the interest of getting each individual transaction completed for both parties!
Have any questions? Call our Agent Leads Generation Program at 202.759.4114 to discuss the topic – we’re actively recruiting and happy to talk about how the grass is always greener for the other side of each transaction!
Our in-house Agent Leads Generation Program naturally maximizes your in-the-field exposure as an agent. It doesn’t matter if you’ve been licensed 5 minutes or for 5 years. Our firm’s Program for lead generation and realtor development is highly effective. The main requirement for entry into the Leads program here is 2 things – your time commitment and a desire to max out your in-the-field exposure as an agent with the public.
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