Defining a Buyers Market or a Sellers Market

It has been said that 5 months or 20 weeks of inventory is neutral territory between the much discussed buyer or sellers market. Before entering into the housing market as either a buyer or a seller it is important to determine where your market is.

If you have less than 20 weeks of inventory, as Kitsap does, then it is a sellers market. If you have more than 20 weeks then it becomes more and more of a buyers market the higher the number becomes.

Kitsap County Washington currently has 11 weeks of inventory. In other words, we have an absorption rate of about 70 to 80 houses a week. We currently have about 782 listings on the market. We are clearly in a sellers market. What does this mean to buyers and sellers?

To Buyers:
1) Realize the market you are in and plan accordingly.
2) Plan to place a strong offer if you really intend to get the house.
3) A strong offer means:
a) You are pre-approved with a lender and have a letter to that affect.
b) Try to tender a conventional offer, FHA or VA unfortunately are viewed as weaker offers.
c) Provide for a respectable earnest money amount. This does not mean $500 or $1000 as
has been customary in our area. If you are putting 20% down on your conventional loan,
show some of that to the seller. Put 10% or more up as earnest money.
d) Put a significant amount down on the loan. 20% will eliminate PMI.
e) Trim down any additional requests you might have of the seller. This does not mean
however that you should not have an inspection. Inspections protect all parties involved.
f) Offer a closing date or other terms that may accommodate the seller. Your agent should be
able to glean these details from the listing agent.
g) Your real estate agent should present the offer to the seller and the listing agent. If the
seller is out of area your agent should at least meet with the listing agent face to face to
present your offer.
h) If you have to sell a home before you can buy this next home you are at a distinct
disadvantage....consider a bridge loan. Talk with your lender.
i) And last.....in a sellers market make your best offer right off as you may well not get
another chance to better your offer. There will probably be multiple offers.

To Sellers:
a) Strategize with your agent how to deal with multiple offers.
b) Don't get greedy, it is better to have an offer a few thousand dollars less that actually
closes then a larger offer that doesn't.
c) Don't be in a hurry....though time is of the essence. If an offer comes in that does not have a
response time until the next day...wait it out. If another offer materializes then you can bid
the two.
d) My opinion.....It is better to counter offer on the best of several offers then do a
simultaneous counter offer to several offers. Discuss this with your agent.
e) There is often talk or chatter about agents who are about to write up an offer. Stick with
what you have in front of you. The bird in the hand beats two in the bush.
f) Don't second guess yourself. Human nature leads us to wonder, "Wow, if we got an offer
this fast maybe we under priced and could get a boat load more for our house??" Do the
research, have your agent do the research (that’s what they do), figure out your expenses
and your needs. Pick a price that works for you and is logical in your current market. Stay
focused on the goal....why are you selling in the first place and what is your next step.

Last....Be Happy! Much of the world would love to have the option to buy or sell a home but they can not. Americans have the greatest home ownership opportunity in the world!!!!!!