“The early bird gets the worm,” as the saying goes. A well-known children’s story depicts the undertakings of a squirrel and a fox. While the fox was spending the winter being lazy, his neighbor was busy gathering nuts. In the middle of the coldest season, the fox was surprised to discover he was starving and couldn’t find food, while the squirrel had everything he needed. Planning and effort is what creates your future. Like the diligent squirrel, those who get busy buying homes in the holiday season — when they could be passing the time at a more relaxed pace — reap rewards from their efforts. While avoiding competition, you’ll benefit from lower prices and motivated sellers, better mortgage rates, tax deductions and quick closings, and you can feel satisfied that you spent your time wisely in the pursuit of a better life.
Reason #1: Lower competition means lower prices
Most people think of spring and summer as the best time to buy a house. They want to get their children settled into new schools before the start of the new school year. The warmer time of year therefore creates a seller’s market, where buyers have a disadvantage. You’ll find competition for the best deals and high prices.
For many people, the holiday season is the time to catch up on gift sales, festivities, and spending moments with loved ones. When you buy a house at this time, you take advantage of the low prices this natural lull in the marketing cycle creates. Like the diligent squirrel in the story, you will be one of the special few spending their time looking at houses.
Reason #2: Serious sellers
Less competition means that people are motivated to sell their house. In the holiday season, buyers are a precious commodity. In fact, only 8.1 percent of home sales occur in December. Sellers know that fewer feet will be treading on their carpet, so this small window of opportunity turns you into a serious buyer with a serious edge. If the house has been listed for many weeks, you’ll have even more negotiation power, especially since sellers receive a tax deduction if they sell before the end of the year. If you are genuinely earnest about wanting to buy a house and have a reasonable offer, why should a homeowner have to reschedule his holiday plans to continue showing his house and worry about selling? Here you have the leverage in price negotiation.
Reason #3: Better interest rates on mortgages
The drop in demand to buy a home at holiday season means that lenders experience less requests for mortgage money at this time. This phenomenon manifests itself in favorable mortgage terms for you — a great reason why it’s the best time to buy a house. Interest rates drop every December through January on a cyclical basis.
A lender can offer you a low interest rate or even cancel some fees to secure your patronage. Do your homework and shop around (don’t forget to include the many online options) in order to get the best rate.
Loan officers advise that it’s best to get prequalified with a mortgage broker or lender early because loan closing turnaround times can range from 30 to 60 days.
Reason #4: Tax deduction
Buying a house and closing before the end of the year may give you a much-appreciated tax deduction. You have a good chance to be able to subtract the interest component of the initial mortgage payment from that year’s taxable income. Speak to a qualified tax advisor to find out how mortgage interest deduction may be applicable to your circumstances.
Reason #5: Faster closings
Faster closings are historically more available in November and December, because of fewer overall transactions in the industry. Because lenders want to close their books at the end of the year, they may be inspired to close a transaction more quickly for people buying homes at this time.
Reason #6: Enjoy your summer vacation
Finally, do you really want to spend your summer vacation overwhelmed with the demands of buying a house? If you’re moved in during the winter, you’re freed up to enjoy summer activities. If you do some landscaping work in the winter, you’ll even enjoy the warm weather more when the fruits of your labors become a pruned and blooming property in the spring.
If you put in some planning and effort to buy a home during the winter months, then you can relax and enjoy yourself more than those caught up in the spring and summer house-buying frenzy.