Just around the corner is the start of the November and December holiday lull in real estate…but not for everyone. Surprisingly, buying a home during the holidays is a thing for buyers with a strategy. While many house hunters are taking time off from their search to enjoy the festive season, there’s always someone whose persistence is ready to pay off. Check out the holiday hunt rationale below!
Find the Most Motivated Home Sellers
There are plenty of reasons that a seller may be more willing to negotiate a lower price toward year’s end. Maybe a family is relocating and wishes to get the kids settled in a new school system by start of January. Perhaps a home has languished through the fall and the seller dreads holding on through winter. There could be tax reasons behind needing to sell before the new year, too. With a buyer’s persistence, the perfect situation can present itself. When a seller under stress finds someone interested in their home, especially during a lull in viewing traffic, they’re often willing to make a deal.
Less Competition from Other Buyers
The last few years have been tough on buyers with declining inventory of homes for sale. It’s made competition tough, particularly in popular markets where many people want to vie for sparsely coveted property. During the holidays, however, the buyer competition tends to wane as people ready themselves for leisure and family time. That means more opportunity for a persistent buyer to find what they want without a multiple-offer war scene on their hands.
Find Builders and Investors Trying to Move Inventory
The holiday season is ripe with opportunity to find deals with new home builders for upgrades on carpeting, paint, and cabinetry. The builder’s incentive to move before December 31st is all about trying to minimize holding costs, losses, and taxes. To time the sale for year-end, they offer incentives to buyers on their existing new homes. Always research builder reputation and testimonials from those you trust, regardless of the deal.
It’s also a time to find reasonably priced homes from investors who need to unload inventory for similar reasons as builders. Because time is ticking for them, you’re likely to get a better price in November and December than a few months earlier. As with any home sale, never waive home inspections, and consider hiring a structural engineer for homes that were once distressed and then renovated for flipping.
Tax Benefits
In some circumstances, there a tax benefits for both a buyer and seller to close by year-end. For buyers who qualify for a tax exemption, such as Ohio’s homestead exemption, closing by year’s end can make a difference of enjoying this benefit immediately or a year later. Qualified home owners need to own the home by January 1st to receive the exemption.
If a seller estimates a hefty profit from her home and is getting a salary raise that kicks in January 1, she may want to unload by December 31st to prevent a possible increase in capital gains taxes. Currently, a single person is exempt from capital gains tax on the first $250,000 in proceeds. For couples, the first $500,000 in proceeds are exempt. Beyond these figures, capital gains tax applies to home sales based on the seller’s income tax bracket.
Easier Access to Home Industry Professionals
The busiest home selling seasons put a strain on time for real estate industry professionals. During the holidays when things move slower, it will be easier to gain access to home inspectors, mortgage brokers, and movers for all sensitive timing needs.
Real Estate Term of the Week
Ohio Homestead Exemption The homestead exemption allows low-income senior citizens and permanently and totally disabled Ohioans, to reduce their property tax bills, by shielding some of the market value of their homes from taxation. The exemption, which takes the form of a credit on property tax bills, allows qualifying homeowners to exempt up to $25,000 of the market value of their homes from all local property taxes.