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The holidays are a unique time to buy a home. Sellers are few and far between, the weather’s less than cooperative, and many real estate pros are on vacation, causing delays and other challenges.
But there are also notable big perks to buying a home during the holiday season – as long as it’s done right.
“While many people associate the holidays with family gatherings and time off from work, for homebuyers, the holiday season can be an ideal time to buy a property,” says Alex Shekhtman, CEO and founder of LBC Mortgage in Beverly Hills, California.
Are you considering a home purchase as we close out the year? Here’s what to expect – and how to do it successfully.
Pros of Buying During the Holiday Season
As Skekhtman alluded, there are some serious advantages to buying a home around the holidays. For one, there’s typically less competition. This makes it not only easier to find a home but to get a good deal when you do.
“There are typically fewer buyers in the market, which gives you more negotiating power,” Shekhtman says. “Additionally, many sellers are motivated to sell during this time of year and may be willing to accept a lower offer.”
According to ATTOM Data Solutions, he’s right: The best days to buy a house – at least price-wise – are all in the last two months of the year (Nov. 28, Dec. 5, Dec. 26, Dec. 19 and Dec. 12, to be exact).
But it’s not just lower prices you might enjoy with a holiday home purchase. Real estate agent Rachel Bennett says sellers are simply more motivated this time of year – and that means other valuable perks, too.
“Buyers who are looking this holiday season will be faced with far less competition and may be able to negotiate a number of things such as price, seller concessions and mortgage buydowns,” says Bennett, an agent with Orchard in Austin, Texas.
Finally, there are also tax benefits to think about. Buyers able to close on their mortgages before the end of the year may be eligible to write off their mortgage interest costs, property taxes and more come April.
Cons of Buying During the Holiday Season
Despite the many benefits a holiday home purchase comes with, there are also some drawbacks to consider. First, agents say there are typically fewer sellers – meaning fewer listings to choose from.
“The inventory is typically lower during the holidays, which means that buyers have fewer choices overall,” says Christy Budnick, CEO of Berkshire Hathaway HomeServices, based in Irvine, California. “You also have to be able to look past all of the holiday decorations to see the home as you would live in it.”
Additionally, real estate professionals – including agents, lenders and home inspectors – tend to have limited availability during this season. This can lead to delays and scheduling difficulties.
“The main challenges are going to be timelines,” says Michael Nourmand, president of real estate firm Nourmand & Associates in Beverly Hills, California. “It’s harder to line up inspections because people are on vacation and the loan process moves really slowly.”
The weather, not to mention shorter daylight hours, can also add an extra layer of difficulty, particularly when touring houses. Additionally, the upfront costs of a home purchase – including the down payment, closing costs and moving expenses – may pose a financial challenge, especially during an already expensive time of the year.
Tips for Buying a Home During the Holidays
If you do opt to buy a home during the holiday season, real estate pros say there are a few strategies that can make your journey easier.
1. Enlist a good agent.
Having a good agent on your side is critical during any point in the year – but it’s particularly important around the holidays. First and foremost, you’ll want one who’s experienced and well-connected in your area.
“Fewer houses are often listed from Halloween to the New Year,” says Jon Sanborn, co-founder of real estate investment company SD House Guys in Philadelphia, Pennsylvania. “You will need someone to find those key properties and utilize their network.”
2. Get preapproved.
You should also get preapproved for your mortgage. This gives you an accurate idea of what price you should be shopping in and also helps you act fast when it’s time to make an offer.
“If you see the right house, that will help your agent make an offer regardless of the day,” Bennett says. “You won’t need to spend time tracking down various stakeholders over the holidays.”
Getting preapproved can also help you in a rising-rate market, when you may need to make budget adjustments quickly.
“The most important step that a buyer can take to ensure a smooth transaction is to get preapproved for a mortgage loan,” Budnick says. “With interest rates changing rapidly, it will be important to understand how much home you qualify for and what it will mean to your buying power if rates increase during your home search.”
3. Plan ahead.
When buying during the holidays, you can expect to encounter some absences. Maybe your agent will leave to visit family, or you have a vacation planned as well.
“Right as you enter the Thanksgiving holiday, people’s minds are in full holiday swing,” says Christian Ross, managing broker at Engel & Völkers in Atlanta, Georgia. “People aren’t taking two days off; they are taking a week off. Make sure you have additional points of contact so you can get any questions or concerns answered in a timely manner.”
You should also line up other professionals early on in case they have other plans, too. This might include cleaners, painters, moving companies and, most importantly, a home inspector.
“Keep a home inspector on notice the closer you get to landing your dream home,” says Christa Kenin, an agent with Douglas Elliman in Connecticut. “A delayed inspection can hold up your mortgage process and will frustrate the seller.”
4. Know the seller and be aggressive.
Since demand is down this time of year, agents say buyers have leverage – leverage they should use to get the best deal possible.
“Sellers would much prefer to unload a home before winter arrives,” Kenin says. “Buyers can capitalize on this anxiety. I encourage my holiday house hunters to aggressively negotiate the closer we get to the holidays.”
To help in those negotiations, work with your agent to understand the seller and their motivations for selling.
As Budnick puts it, “Determine the seller’s hot buttons. Are there things that are important to the seller that don’t matter to you? If so, use them to your favor during negotiations.”
Article source https://realestate.usnews.com/real-estate/articles/tips-for-buying-a-home-during-the-holidays.