I was talking to a colleague the other day about human nature. He was discussing how it's common amongst us to adopt a behavior merely because it's "what everyone else is doing". Sometimes
Why End Of Year Can Be The Best Time To Buy
I was talking to a colleague the other day about human nature. He was discussing how it's common amongst us to adopt a behavior merely because it's "what everyone else is doing". Sometimes we even do these behaviors without understanding why. So, it was no surprise to me when a client told me she was planning to buy in the summer because that's when everyone else does it. Yet, when I asked, she couldn't tell me why.
I explained to her that many people buy in the summer because people get busy due to the school year beginning and the holiday season rolling around. The best time to buy is when you're ready and there can be many benefits to buying at the end of the year. Here are 5 reasons why end of year may the best time to buy.
1) Less Competitive
The market is doing really well, which has led to moments where buyers are competing with each other to bid on the same home. Because there are less buyers on the market at the end of the year, you may have no competition when you find your dream home.
In fact, you may sometimes come across a motivated seller looking for a quick sale to downsize, upgrade, move to a new job, cash in on equity, or may want to enjoy tax savings on buying a home before the end of the year (more on this below). If the stars are aligned, I maybe able to negotiate money off the listed price and/or get seller concessions, which can lower your closing costs.
2) Builder Incentives
The market slowing down during the end of the year doesn't only affect sellers of resale properties, but also new construction. If you're buying a house that is brand new, there's a good chance builders may need to meet quotas and push to close the books on their year. If you have a good Realtor, he or she will be able to know their sales rates and negotiate on your behalf. They may be able to get you discounts on price, paid closing costs, and upgrades.
3) Interest Rates Are Still Low
Rates have gone up, but are still low, which means a lower monthly payment and less interest paid over the life of a loan, This can save you thousands of dollars. According to Kiplinger the Fed may raise interest rates twice in 2018. If you lock in the 2017 mortgage rate now, you'll be safe when 2018 rates go off the charts. If they drop, you can always refinance.
4) Tax Deductions
Property taxes and some closing costs can be tax deductible. If a property is a rental the taxes can be claimed as an expense. If you need a tax deduction, buying before the end of the year can lower your tax liability. If you close by December 31, you can deduct mortgage interest, property taxes, points, and additional costs. We are in no way providing tax advise and always recommend consulting with your tax advisor.
If you are planning to reside in the home, then you have time to register your new home with a Homestead Tax Exemption. Primary residents get a tax discount every year, but must register their home by the end of February to qualify.
5) Down Payment Assistance
There is currently a program where you can get up to $15,000 towards your closing costs and pre-paids. If you live in the property for 5 years, you never have to pay it back. That's $15,000 for FREE!! Not many people know about or have taken advantage of this program. There is speculation that the program will not be continued in 2018.
So, if she bought a home now, she might get a lower price and incentive whether she is buying resale or new construction, have to pay $0 down to buy the home with the free $15,000, get a lower interest rate, get tax deductions, and start putting money towards an asset that she will own. This will ensure a payment that may be lower than rent and will not rise for the next 30 plus years. Did I mention, she gets to renovate and decorate as she wishes. Sounds like a win, win situation to me. So like your mom always said, if you're friends jumped off a roof, would you do it too? The lesson here is don't always follow the pact, because it may save you hundreds or thousands of dollars.
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Please text or call me if you have any questions about this or any other topic. I'm here to service any of your real estate needs. I can be reached at (407) 534-0147 or by email at Jen@PropertiesInTown.com.
Jen is a seasoned Real Estate Agent with more than 7 years of experience in the industry. She started out as a Title Insurance Marketer in Park City, UT, then moved to Florida to enjoy the beautiful ....