In the world of real estate, buyers and sellers are looking for opposite things when it comes to price. A seller, of course, wants to sell their home for the most amount of money possible. A buyer, on the other hand, wants to buy their home for as little money possible. The state of the market will determine whether prices are higher or lower, depending on demand. This is true of all real estate transactions, whether they be For Sale by Owner or listed with traditional real estate ages.
Within the real estate profession, an average market is considered to be one in which the average home takes about six months to sell. Thus, there will be roughly six months worth of homes on the market at any given time. When the time a home stays on the market is shorter than six months, this is considered to be a seller's market. When the average home is on the market for longer than six months, it becomes a buyer's market.
For FSBO sellers, then, timing of a sale can be critical. If you have the time to wait for a bit to put your home on the market and sales are in a slump, you might want to look for a time when sales begin to pick up before putting your house up for sale. Like every market, the real estate market has its ups and downs, even if things don't look good at the moment things will eventually pick up again.
It is important to note, though, that even in a buyer's market sellers can still make money. If you have a bit of time to wait and have a good property, you will be able to find the buyer who is willing to give you the price you're looking for. For those in a must-sell situation, however, you might find yourself taking a bit of your profits in order to make the sale during a buyer's market.
If you are a buyer looking for private real estate sales, you may want to do just the opposite. Wait on buying your home until sales start to slow down a little. In a buyer's market, you have more control. Sellers are more likely to lower their prices, and you will be able to buy more house with less money.
There are some tricks to helping to identify a buyer's market. For example, one rule of thumb is that winter is often a buyer's market. Less people are moving during the winter, thus less people are going to be out looking to buy a new home. Less buyers means less sales, thus buyers have a bit more control. When spring comes the pendulum swings the other way as more buyers enter the market, tilting things more towards the seller. This is not always true, of course, but it is something to take into consideration.
Another thing to consider is that it is possible for their to be a buyer's market in real estate agent run transactions, while the FSBO market becomes more of a seller's market. In today's tough economic times, with many banks in trouble, many people are foregoing traditional home buying routes and preferring to look at private home sales. When an owner is selling their own home, they are often more likely to be able to work out alternative financing in a market where mortgages can be difficult to come by.