I am looking to build a classified ads website but confused whether to go with joomla or wordpress. I know only a little about joomla and nothing about wordpress. Also if in the future, I want to switch from one to another, how difficult it would be? Is it possible? Or I have to start from the scratch again?
Assuming you don't want to use a specific Classified Ads Content Management System, I think that at this point you should consider Drupal as well. Drupal is very effective on user/permission management by default, and Drupal 7 already allows custom content types by default.
but depending on what you want, it might be feasible without this module.
To do the same thing in Wordpress, you would have to patch it with a lot of scripts/plugins. If you don't have deep understanding on how a CMS works, keep plugin usage at a minimum. There's no guarantee that very specific plugins will be updated and continue to be compatible in the future.