Probably now you have a more or less definite understanding of what the real-estate market basic types are. But how can a person understand whether he is in a buyer's real-estate market or in a seller's one? What are the basic signs of them?

The most common signs of a buyer's real-estate market are: inventory is high as compared to previous months, years, fewer buyers are purchasing, resulting in lower closed sale numbers, comparable sale prices are higher than active listing prices,  there is much more real-estate advertisement, median sales prices are declining, more than six months of inventory is on the market. 

To compute months of inventory you should find the total number of active listings on the market last month, then the total number of sold or closed transactions for last month and finally you should divide the number of total listings by the number of total sales, which results in the number of months of inventory remaining.

The most important signs of a seller's real-estate market are: inventory is very low as compared to previous months, years, less than six months of inventory is on the market, comparable sale prices are lower than active listing prices, more buyers are purchasing, resulting in higher closed sale numbers, median sales prices are increasing, real estate ads are getting smaller.

Some of the signs of a neutral market are: inventory is normal as compared to previous normal months, years; sales numbers have stabilized; two to four months of inventory is on the market; real estate advertising remains uniform; comparable sale prices are close to active listing prices; median sales prices are flattened.

What you should know is that there can be either a buyer's real-estate market or a seller's real-estate market. If you are in a buyer's real estate market it means that there are more homes available for sale than buyers to purchase them. So you see that if you are a buyer looking to a purchase home in a buyer's real estate market, this is the best financial market in which to buy.

If you are in a sellers market it means that there are more buyers than available houses to buy. This is a perfect situation for home owners who want to sell their property.

Serious buyers in a hot market are often willing to pay more than list price. So you can sell your house quickly and for more than you ask for it. If your market is sizzling hot, you might be able to demand that buyers waive appraisals and inspections, although it's always a good idea to let a buyer have a home inspection.

Serious sellers in a cold market are often willing to negotiate.

In a neutral real-estate market the number of buyers and sellers in the marketplace is equal. These markets are balanced and interest rates are affordable. The scales don't tip in either direction, meaning the market is normal without experiencing volatile swings.

Most real-estate participants working without an agent don't usually pay much attention on the current market conditions. That's because most folks tend to think of their home as a place to live and not as an investment. When most people decide to sell or buy a home, very few stop to take the temperature of the marketplace or wonder if the market is conducive to the goals at hand.

If you choose working FSBO you should understand that you won't have an agent to explain you all the terms and rules of the market. So it essential for you to know at least the basics of the real-estate market in order to understand all your negative sides in a particular situation and all your priorities as well.