Buying a home during the holidays can be a good choice for a variety of reasons. Advantages of purchasing toward the end of the year include less competition for homes, tax advantages, lower home prices and faster closings.
Plan For Holiday Savings
You don’t want to miss deals or a December 31 deadline (if you have one), so you’ll need an organized approach to holiday house purchasing. Often, homebuyers forget to plan in a rush to close before year-end while dealing with holiday activities.
You should know what you want to accomplish when buying a new home during the holidays to get the best deal and take advantage of year-end tax incentives. However, you won’t get the best home for your money if you don’t properly leverage the benefits of buying around this time of year.
With these five strategies, you can start the year with savings in your pocket and life in your new home.
Find a Trustworthy Real Estate Agent
In many areas, a handful of real estate agents sell the majority of houses. The biggest and best agencies in any given city usually talk to each other about homes and trends that are coming next in the housing market.
This is important because fewer properties will be actively listed between Halloween and New Year’s Day. Working closely with a knowledgeable real estate agent will help you gain early access to as many houses as possible (like the un-publicized listings discussed in the next section).
Make sure your agent is quickly and regularly available via email, text, or phone. You will require your agent’s help and expertise from the beginning of the process to the end, especially during negotiations, escrow processes, and closing.
Finding out which selling agents will be available during the holidays is important as well. Find them and ask how available they’ll be during the next few weeks. Chances are you can find one who still needs to meet their year-end quota, or who is able and willing to work just as much during the holidays as the rest of the year.
Ask About “Pocket Listings”
“Pocket listings” are homes not listed on local multiple listing services (MLS) or otherwise available to the public.
Once reserved for very high-end or celebrity homes, pocket listings are used today by regular sellers for several reasons. Some people may not want a high volume of people who are “just browsing” or want others to know that they’re moving just yet. Whatever the reason, these sellers only want the most motivated or qualified buyers to see their home. Only their real estate agents know the home is for sale. Some of the most desirable houses in a neighborhood might be “hidden” this way.
Other sellers opt for pocket listing so that they can pay a lower (or possibly no) real estate commission. If the sellers are willing to share those savings, it could be to your advantage as well.
The final advantage of pocket listings – for you -is that less publicity and popularity often means less competition from other buyers.
However, don’t assume you’re getting a bargain. Make sure to research comparable homes for sale nearby to get the best deals, and compare those prices to homes listed publicly or on the MLS.
Find Motivated Sellers
Around the holidays, it shouldn’t be difficult to find “distressed properties”. Most sellers who list their homes around this time are very motivated to sell for several reasons. Life changes such as divorce, change in financial situation, job relocations, or moving to be in a better school district are only a few of the many factors pushing people out of their homes.
Whatever the reason, you could benefit by negotiating a great price on the house. Since it’s the holidays, be empathetic but don’t be afraid to low-ball your offer. Request things you want, such as appliances and furniture, to be included in the price, too – you never know, you may get them. You could also ask for other incentives to buy, like a closing date that’s better for you.
Pro tip: remember that weather can hide some major issues. A broken AC system may hide in the winter, or septic tanks and foundations can be difficult to inspect after lots of rain or snow. Be extra vigilant!
Find the Moving Inventory
Other sellers may be more motivated to sell by business reasons than personal ones. Homeowners may try to minimize any current losses they’ve incurred, or to reduce their taxes by selling just before year-end. You can likely find holiday deals with contractors, such as upgraded carpeting, cabinets, or paint. Builders may need to move pre-built inventory by December 31 – leverage that need by purchasing those existing homes in newer areas. Make sure to buy from reputable builders. Research them thoroughly and look for referrals from people you trust.
With the explosion of DIYers and fixer uppers, you can get well-priced, newly renovated homes from real estate investors now, too. House flippers always try to unload homes quickly, but even more so during the holiday season. The longer they have the house, the more holding costs they’ll pay. You could get one of those homes cheaper than you would even a few months earlier.
As with all sales, never waive your home inspection. In cases like foreclosures or distress sales, consider an inspection by a structural engineer. They can see issues an interior home inspector is likely to miss or may not investigate.
Homebuying transaction volumes decrease during the holidays, and some salespeople get bonuses for hitting annual goals. You might be able to negotiate discounts on commissions, or services like title and escrow, by closing by December 31.
Remember - as the buyer, you will choose the title insurer, escrow company, mortgage lender, and home inspector. To ensure an objective valuation, the one thing you won’t get to choose is the appraiser if you finance your own purchase.
What About Mortgage Rates?
Along with most things in 2021, mortgage rates have been trending upward. However, mortgage rates are not yet at their expected peak. While the housing market as a whole is becoming more inflated and expensive as well, there is good news - while you may have to pay more for a new home, it’s likely you’ll sell your current home at a higher price as well. Choosing the right program and lender can help you maximize purchasing power.
If you're in the market for a home this holiday season, our experienced mortgage loan officers can you navigate the process. Make an appointment today to discuss your homebuying homebuying options!