The Colorado Springs Home Buying Process identifies each step of the process to purchase a home for buyers. Understanding the market by knowing if it is a Seller’s Market or A Buyer’s Market when writing an offer is critical to the strategy used by buyers to get their offer accepted.
When the average days on market are below three months, it is typically called a seller’s market. In a seller’s market, the seller calls they shot because there are more buyers than there are homes on the market. When average days on market are below two months, we will see multiple offers on homes in good condition and priced at market value. We also see the prices on homes appreciate quicker, sometimes 10-15% over the previous year for some neighborhoods in Colorado Springs.
When writing an offer in a seller’s market, the buyer needs to keep in mind that they want the seller to select their offer over any competing offers. One of the ways to do this is to consider the net amount the seller will receive at closing. When a buyer asks for concessions, this impacts the seller’s net.
It is also important to consider the seller’s timetable for selling. Offering to allow the seller to remain in the home three days after closing to move to a new home may give the buyer an advantage over others.
Offering more earnest money than the seller requests, or making the earnest money non-refundable, tells the seller you are a serious buyer.
A Buyer’s Market is typically defined as a market where the average days on market are four months or greater. In a Buyer’s market, the sellers are often very motivated to sell and more willing to accept less than the list price for the home. In a seller’s market, the longer the home stays on the market, the lower the sales price the seller will receive. The sellers are also more willing to make the deal by giving concessions to the buyer to help with their loan costs or for repairs or upgrades. So, in a Buyer’s Market, it makes sense that we see the average seller paid concessions increase.
A balanced market is when the market is transitioning between a seller’s market to a buyer’s market and vice versa. The time the market remains balanced can be relatively short. The average days on market for a balanced market are between three and four months. In a balanced market, neither party has the advantage. Buyers and sellers work to make the best deal for both parties.
Additional blog articles concerning Writing an Offer
By Nancy Murray
Murray & Associates, Keller Williams Colorado Springs