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4 tips for holiday homebuyers

holiday homebuyerWhile the rest of the world focuses on party planning and buying gifts, savvy homebuyers can sometimes find a good deal a house. From Thanksgiving into the New Year, the number of home sales traditionally dips as buyers direct their attention to the holidays and opt to postpone house hunting until the next year. Fewer buyers means less competition for serious home shoppers.

Median sales prices traditionally decline a little at the end of the year. Sellers who keep their home on the market during the holidays tend to be more motivated and willing to negotiate. Families with school-age children, typically the buyers of larger homes, are less likely to buy in the middle of the school year, so lower median prices may be a result of the number of smaller homes that are sold during the holiday season.

Some sellers opt to take their homes off the market for a few months and try again in the spring. Those that keep their home listed for sale are usually eager to get their property under contract.

"I generally tell my buyers that sellers are more motivated, due to the time of year," says Kim Wirtz, a Realtor for Century 21 Affiliated in Lockport, Ill.

Just as at any other time of year, buyers need to be prepared with a mortgage loan preapproval so they know how much house they can afford.

"Buyers should talk to a trusted mortgage professional about a mortgage loan before they start to shop for a home, so they have time to gather all the paperwork a lender needs," says Brian Koss, executive vice president of Mortgage Network, Inc. in Danvers, Mass.

4 holiday homebuying tips

  1. Pay attention to prices. Buyers should be aware of prices and values in the neighborhoods where they are looking. Sellers who keep their homes listed for sale tend to be eager to start the New Year with a "Sold" sign, so buyers can anticipate either a lower asking price or a willingness to negotiate. "As a buyer, I would use the holidays to my advantage from a price standpoint," says Wirtz. "The homeowners are generally a bit more motivated due to less activity during this time."
  2. Look beyond the decorations. One potential drawback to shopping for a house during the holidays is that homes may be decorated for the season. "Shopping for a home during the holidays can sometimes skew the true beauty of the home, due to decorations," says Wirtz. "Heavily decorated homes do not show the true appearance as buyers are looking at the decorations and not the home." You can ask for photos of the property when it's not decorated and take measurements of room sizes, so your perception isn't changed because of a tall Christmas tree or furniture that has been rearranged.
  3. Be mindful of potential scheduling conflicts. Looking at homes and buying during the holiday season can be complicated by cold weather and busy personal schedules. "Sometimes homeowners will decline more showings than normal due to holiday parties and events," says Wirtz. You may also need to accommodate busy schedules with a home inspector and other professionals involved with your home purchase during the holidays. Some people in the real estate business take vacations during this time of year because there are fewer transactions.
  4. Do your mortgage loan paperwork early. "I find that during the holidays mortgage approvals take a bit longer," says Wirtz. "This is more the case when someone is using a large bank instead of a small mortgage broker. End of year banker vacations and days holiday office closures definitely hinder the approval process." Koss agrees that lenders, insurance companies and title companies may be staffed more lightly during the holidays. "While this can be easily planned for, don't expect everyone to be able to pivot and execute quickly," says Koss. "Get all your paperwork in early, choose your loan terms and stick to them."

Mortgage rates are anticipated to rise next year, so it may be a good idea to lock in a rate and a loan program early. The closing date for a holiday purchase may be this year or next year, which could have tax implications. Koss says that since most lenders are not tax experts, it can be a good idea to consult with a tax professional before deciding when to close.

If your holiday shopping plans involve a house, consult professionals so you make an informed decision that keeps you happy for many holidays to come.

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