Certified Residential Appraiser Practice Exam

Which of the following is typically NOT a characteristic of a buyer's market?

1. Low market prices

2. High supply of properties

3. Strong negotiating power for sellers

4. Advantageous conditions for buyers

The correct answer is: Strong negotiating power for sellers

In a buyer's market, the conditions usually favor prospective purchasers rather than sellers. Characteristically, this environment is defined by a surplus of available properties, leading to lower market prices. Consequently, buyers gain significant negotiating leverage, allowing them to push for better terms and prices. The option indicating strong negotiating power for sellers contrasts the very essence of a buyer's market. In such a scenario, sellers need to be more flexible and accommodating because there are typically more properties than potential buyers, making it a less advantageous position for them. This imbalance gives buyers the advantage to negotiate more favorably, resulting in lower prices and better purchasing conditions. In summary, a buyer's market is characterized by low market prices, a high supply of properties, and advantageous conditions for buyers, while sellers generally do not possess strong negotiating power.