If you’re considering a new home this fall or winter, contrary to popular belief- the holidays are a great time to buy! Here’s why…
1. Homes are Priced to Sell
People selling their homes during the holiday season often have great incentive to sell, like an upcoming job relocation in the new year. If a home has already been on the market for some time- that incentive is multiplied. Although inventory is typically lower during the holidays, sellers tend to be considerably more motivated, meaning homes are priced to sell. Since the market is slower, this gives the buyer leverage! Bargains may be available, and listed prices may be more open to negotiation. The holiday season is definitely a buyers market- consider this the Black Friday and Cyber Monday of real estate… all season long!
2. Less Competition / Market Activity
Most people would like to avoid a real estate bidding war. No one wants to pay more than asking. Bidding over asking price because someone else is interested in a home can be one of the most frustrating experiences as a buyer. Offer too little and you could lose the contract – offer too much and you’re wasting money. Having to submit a second or third round of offers is even more nerve-racking. During the winter there is considerably less traffic, giving buyers an opportunity to see a home more leisurely and with less competition.
3. Mortgages are Approved More Quickly During the Winter
Banking, like every business, has a busy season and that means long wait times and less personal attention. During the busy months (spring and summer), the bank could take days, weeks, or even over a month to close. If there are any complications during the rush to process the tidal wave of applicants, this will delay your close as well. During the winter, less traffic means your bank can spend more time on you, help you find the best options, and even process your paperwork more quickly because they’re not being inundated.
4. Moving and Renovations Tend to Be Less Expensive In the Winter
Business slows down considerably for many labor trades. People tend to be busy getting ready for the holidays, spending money on presents and cutting down on exterior maintenance projects due to the cold. Painters, movers, and home re-modelers see their slowest months from November to March and are known to offer their best pricing during these winter months just to keep busy.
5. Estimates of Energy Efficiency are Most Accurate During the Winter
Winter months are the most expensive when it comes to energy. Buying a home during the winter gives you a chance to assess your home to precision with an accurate energy audit. Using a thermal camera, your home inspector can instantly tell you how efficient a home is, and where energy is being lost. Not only that- winter buyers can also request a copy of the most recent utility bills to review. You can also find out if the pipes freeze and if the furnace warms the house evenly. If anything doesn’t meet your expectations, you can request to have these items repaired… see point #1 on buyers having more leverage in the winter. The sellers are also more likely to oblige during holiday months- see #7.
6. It’s a Good Time to Make an Investment
Off-season home prices tend to be less expensive for this exact list of reasons, giving you almost instant equity if you have your home appraised in the peak season that follows. One reason might be that much of the competition in the winter consists of investors looking to snap up foreclosures and REOs during the holidays. Sellers who have received a number of low-ball offers from investors who often don’t respond to counter-offers may be more willing to accept a reasonable first offer from a owner-occupant. Lenders may also be willing to negotiate reduced closing costs to win business from the shrinking buyer pool, adding up to serious savings.
7. Sellers and Builders are More Likely to Offer Upgrades and Repairs
It’s the end of the year- the time when people are statistically feeling most generous. If you’re buying a brand new build, there’s a good chance you can convince the builder to offer a few upgrades or little extras so they can sell a few more houses before they close the book on the year. Sellers are also more willing to make repairs and oblige to buyers during the holiday months!
8. Instant Tax Incentives
Did you know, if you close prior to December 31st, you can immediately deduct mortgage interest, property taxes, points on your loan, and interest costs when you file for the new year? These kinds of deductions can be really significant- especially in the early years of your loan when you’re paying off a decent amount of interest.
9. Better Interest Rates
Within the general trend of interest rates, there is often a cyclical trend of lower rates during the holidays. Contrary to #7, these rates are not the result of the generosity of lenders, but rather due to limited demand forcing greater competition among lenders. There are plenty of factors that can obscure this cycle, but in general, you should see great interest rates around the holidays compared to immediately before or after.
10. Fast Closings
Generally, all parties involved have incentive to complete transactions toward the end of the year. Lenders want to close their books, real estate agents want to receive their commissions before the year closes, sellers want to move onto their new home and settle in for the holidays – and just like the sellers, buyers want to settle in as well. Since all parties are motivated and there are fewer transactions taking place this time of year, it’s more likely for a smooth and rapid closing. The holidays represent an opportunity to buy a home under mostly favorable economic conditions.
We won’t add this to the actual list… but wouldn’t a home be the biggest, best Christmas gift of all?! We’re pretty sure it would be the most memorable gift that could never be topped!