There’s a holiday song that croons “there’s no place like home for the holidays.” Well, what if you need or want to buy a home during the holidays? You may be relocating and need new digs, or simply have more vacation time to look than you do during the rest of the hectic year.
Most real estate brokers will tell you that the preponderance of home-buying season extends over the spring and summer months, not the dead of winter. People tend to look strongly when daylight is more extensive, and at a time when their move will mean kids don’t have to change schools midyear.
However, that doesn’t mean there’s no home buying during the holidays. People buy houses all year long. There can be strong advantages to buying during the winter. We itemize them for you below, along with some drawbacks to watch out for.
There are several motivating factors that make buying a home during the holidays beneficial:
One of the chief benefits of looking during the holidays is that you have more negotiating power. That’s always good in a financial transaction, particularly one like real estate where you can negotiate prices fairly easily. Fewer people are looking for houses that sellers want to buy.
Sellers at this time of year may have put their houses on the market because they need to sell. Perhaps they are relocating or downsizing. They are motivated to sell, rather than keeping the house on the market six or more months longer. As a result, you can name a lower asking price, and if the sellers find it reasonable, you may well get a house far more cheaply than the same house would sell for during the summer.
Fewer prospective buyers are ringing sellers’ doorbells this time of year. That means you’ll have far less competition, both in looking and making bids. This can translate into several good things. It can significantly lessen the anxiety in a hot market. You don’t have to worry so much that you’ll be outbid, or that sellers are entertaining a number of bids.
It can also mean you can ask for sweeteners from the sellers. If you think a major repair is coming less than five years down the road, you can ask that the seller contribute all or part of the estimated price, by lowering the house’s price.
It also means your real estate agent is likely to take more time with you. With fewer clients ringing their doorbells, they have more time to devote to each one.
Because of the lower number of houses sold at this time, there is also more competition among lenders. You may be able to negotiate with lenders to get lower interest rates on your mortgage. Shop around.
Ask about negotiating points as well. Lenders can be motivated to make arrangements in a slow season, just as sellers are.
There are several advantages in closing a newly purchased house toward the end of the year. The first is a potential tax deduction for the year. Points, interest paid and property taxes are all tax-deductible. If you close before the end of the year, you can apply any monies you’ve paid in this category to lower your tax bill.
The second is speed. Closings can take weeks and considerable time expenditure on your part. At the end of the year, everyone involved is motivated to close by year-end. That means you, the seller, the lender, the agent and the appraiser! Closings can move with speed unimaginable in the summer.
Along with the positives come the negatives. Here are some things that can put a damper on a holiday home sale:
While you’ll have more negotiating power and less competition, you’ll likely also have fewer homes to look at. Most people, again, put their houses on the market in spring and summer, not winter.
There are some strategies to get around a dearth of homes to look at. First, ask your real estate agents if they know of any homes coming on the market in the near future. It’s possible the sellers would consider showing you the house.
Second, find out if there were any homes on the market recently that didn’t sell. Sometimes sellers rethink their plans if their homes don’t move. They could be persuaded to show you the home.
If you live in a place with snow on the ground, it’s possible that certain elements won’t be visible to you. Roof inspection, for example, is an important part of assessing the home’s condition. You need to see if shingles are missing or animal nests are abundant. You may not be able to. The same goes for the lawn and yard. If there are shade trees that crucially need pruning, that is only going to come to light in the summer.
One strategy is to obtain careful documentation about the home’s condition. Another is to negotiate the price down based on the potential for unforeseen elements you’ll have to fix or repair.
There are many benefits to looking for a house to buy during the winter holidays. Have fun looking and negotiating, but be sure to remember the drawbacks as well.