Why November Is A Great Time to Buy
As we quickly approach Thanksgiving the end of the year is right around the corner. With this often comes holiday parties, excessive days off and a general lull in the real estate market. In real estate this can present a great opportunity to buy. With your competition mailing the rest of the year in you can take full advantage of it. Even though November is traditionally a slow sales month there are still good deals to be had. You just need to know where to look and how to approach them. By closing just one more deal before the end of the year it will set your business up for a great start next year. Here are five reasons why November can be a great time to buy.
- Reduced Prices. Sellers know that the end of the year can be a difficult time to sell. With the change in weather mixed with the holidays there are many buyers who decide to postpone their home search until the New Year. Partially because of this sellers are inclined to reduce their asking price. Even if they don’t come right out and lower the price they may be inclined to accept a below asking price offer. If there are any properties you have had your eye on now is a good time to at least make an offer. You never know what a seller may be thinking and want to do with the property. They may be desperate to sell by the end of the year and willing to come off their list price. A good tip is to look at properties that have had a price reduction in the last 45 days. If they took one reduction there may be a chance they are open to accepting any reasonable offer that comes their way.
- Motivated Sellers. As we mentioned there are many sellers who are desperate to sell before the end of the year. By finding motivated sellers you can stumble upon good deals. One group of motivated sellers at year end time are lenders. Banks are not in the business of being property owners. Although the number of short sales and foreclosures has declined there is still a good amount of inventory in many markets. Banks holding these properties would love nothing more than to clear their books of them by the end of the year. Ask your real estate agent for a list of all bank owned, short sale or foreclosed properties in your area. Go through them one by one and look for properties that have either been on the market for some time or require cash buyers. Don’t be afraid to make an offer you feel comfortable with as long as you can close before the end of the year.
- Tax Break. There are a handful of tax incentives or breaks that expire at the end of the year. As a buyer you can write off several closing costs expenses and apply them to your 2016 tax return. This alone may not be a reason to buy but if you are on the fence it can be a deciding factor. There are also a handful of sellers who want to take advantage of these benefits on the other side of the transaction. If you can target a seller who has recently purchased a property you may be able to get a good deal. This is especially the case with fellow investors. Scour through as many real estate listings you can find online and target properties sold by investors. They may be highly motivated to sell by the end of the year and will often offer a steep discount to do so.
- Quick Turnaround Time. Not every real estate purchase is done through a cash sale. If you purchase your properties with lender financing you may still have time to close by the end of the year. With decreased volume lenders have the ability to turn your loan around much quicker. Instead of waiting days to clear an underwriting issue it is possible get these taken care of the same day. The downside is that there are plenty of days off or half days towards thanksgiving but there is also more of employees looking for work to do. Ask your lender or mortgage broker what their current turnaround time is. If you have all of your loan items in place it is very possible that you can close your purchase well before 30 days.
- Supply. The end of the year is usually filled with ample property supply. This gives buyers the ability to sift through inventory to find exactly what they are looking for. It is not uncommon to find the best deals of the year at the end of it. Sellers understand that after the calendar turns there is still three to four months before the spring selling season. This is four months of carrying costs or mortgage payments they would have to make. With increased supply you know exactly what you are buying with a seller who may be willing to turn the page and move on from the property.
With the weather turning and the days getting shorter there is a tendency to work less. However if you can finish up the year strong and keep your eyes open for deals you will be rewarded. November can be a great time to take advantage of the market.