Five reasons why buying a home over the holidays isn't such a bad idea
We're not quite to Thanksgiving yet, but the holiday countdown to Christmas and New Year's is already underway. Besides being a wonderful time to spend with family, the holidays are also known for being a great time to snag a deal on consumer electronics, automobiles and last year's latest fashions. But guess what? It's also a great time to get traction on buying that new house you've been thinking about.
Most people don't know — or don't want to believe — that there are real estate deals to be had during the holidays. Sure, there are the typical things that put a damper on househunting this time of year — it's cold in much of the US, inventory is limited and has been for some time, you have too much holiday shopping to do — but don't let the anxiety of the season keep you from finding, and putting an offer on, your dream house.
Here's why buying a home during the holidays will make you say, “Ho, Ho Ho! Why didn't I think of this before?”
- Less inventory = less competition
You've been hearing a lot of news about how there are no homes for sale anymore. The frenzy of buying a home during the pandemic has indeed decreased the available inventory, but real estate inventory has always been limited during the holidays. That's because there is less real estate activity in general at this time of year — fewer people are selling fewer homes because – well – they're spending time with their families during the holidays.
With typically fewer homes for sale in November and December, there are also fewer mortgage lenders, realtors and inspectors on call. Guess what? They're spending time with their families during the holidays, too!
Rather than seeing this as a roadblock, consider it an advantage. We're not sugar-coating it – it'll take some effort to line up open houses and realtors and inspectors and whatnot, but think about it: all that legwork is going to thin the pool of motivated buyers. There will be a lot less competition. That means there's a strong possibility that open houses will be empty and fewer offers will come in, which in turn could mean that you might be able to negotiate a great price, too. How's that for a holiday miracle?
- Sellers may be more motivated
If a homeowner is selling their home during the holidays, the chances are good to great that they have a compelling reason to do so. Maybe it's been on the market for a while, and didn't see much action. Perhaps they're relocating for a new job. Maybe there's a pending marriage or divorce, or cohabitation situation. Even better: what if they put a bid on another home that got accepted, and now they have to sell this one quickly?
Whatever the reason, if they're motivated enough to sell during the holidays, they're probably motivated to make a deal. Consider that when you make your offer.
If the home in question is a foreclosure property, you may do even better. Banks and other financial institutions are often motivated to get those properties off the books before the end of the calendar year. They have less to lose by accepting a lower price, and with less foot traffic, they might be more willing to negotiate.
- You may get end-of-year tax benefits
Depending on your financial situation and how your tax exposure is shaping up for the current calendar year, purchasing a property before the year's end can provide significant tax advantages.
If you itemize deductions, closing on the purchase of your new home before the year ends could allow you to deduct things like closing points, property taxes and any mortgage interest paid upfront. If you're buying for investment purposes, there may even be more tax benefits available — as long as you have a business entity established.
Of course, you'll want to confer with your tax accountant. And we don't recommend buying a home for the tax benefit alone, but it's worth looking into. Tax benefits from the purchase of real estate can give you some flexibility when it comes to determining what you're willing to offer on a property.
- You may see more attractive mortgage rates
Just because your house shopping during the holidays doesn't mean you're guaranteed a lower interest rate. Santa doesn't work that way (although that would be nice.) As we all know, you can't fully predict whether interest rates will rise or fall any time of the year — there are simply too many variables.
However, history is on our side. Historically speaking, interest rates do tend to dip slightly during the holidays. This can sometimes be attributed to the fact that there's just less demand for home lending during November and December and more of a chance for an interest rate adjustment during this time.
So, while you aren't guaranteed lower rates when taking out a mortgage during the holiday months, you can often find favorable financing with lenders who are happy to have your business over the holidays.
- Anticipate a faster, smoother closing
Motivated homeowners and homebuyers aren't alone in their desire to get a deal done during the holidays. Realtors, lenders, loan officers, home inspectors and home insurers are keen to hit their targets, close their books and earn their commissions before the calendar flips to January 1st. Sometimes there are extra incentives to do so.
Because of this, you might see things moving at a slightly faster clip than processes take during non-holiday months. You can't blame them; they want to get home to enjoy the holidays too!
Though there aren't many days when a mortgage loan officer or reals estate agent is totally off the clock — they're always checking email — there will be other internal demands at this time of year that they'll have to attend to. We suggest connecting with agents and lenders as early in the process as possible to make sure that they'll be ready, willing, and able if you find the right home, right now.
The Movement Mortgage difference
What has seemed to be the standard for the typical mortgage experience is a long time frame of 30 days minimum. And frequently even more than that. If you're concerned your home loan process will take a little too long to finalize — especially during the holidays — you need to know about Movement Mortgage's unmatched 6-7-1 process.*
- 6 Hours: Our goal for Upfront Underwriting. This results in qualified borrowers receiving a fully underwritten pre-approval. We recommend taking this step before you even start looking at homes so you don't waste time on properties you cant afford.
- 7 Days: Our goal for the complete processing of the loan. We won't bug you for documents, but we also won't tell you that your loan is weeks late because we forgot to ask you for an important bit of information.
- 1 Day: Our goal for closing the loan. Clear and simple!
To get pre-approved for your home loan, contact one of our local loan officers to learn what else you'll need to prepare for and to discuss which program might be right for you. Or apply online with the Movement Mortgage Easy App. This tool will help you get pre-approved quickly by letting you upload all required documents straight into the app.
Happy Holidays and Happy Home Buying!
*While it is movement mortgage's goal to provide underwriting results within six hours of receiving an application, process loans in seven days, and close in one day, extenuating circumstances may cause delays outside of this window.
