When is the best time of year to buy a house? The best month to buy a house? If you are buying a house for investment in order to rent it out, timing is very important. For many people, summer and spring are the best seasons for finding and buying a real estate investment property. Since it is a more pleasant time of the year, investors are more likely to get out and prospect. Summer and spring are also considered ideal for real estate investing because buyers can look at yards and roofs when they are not covered in snow.
However, though it is not usually considered the best time of year to buy a house, purchasing a home during winter comes with a wide range of advantages for real estate investors.
6 Reasons Why Winter Can Be the Best Time of Year to Buy a House
Here are some of the reasons why you should go house shopping in the winter real estate market:
1. Motivated Sellers
Homeowners that decide to put up their homes for sale during winter often do so because they want to sell immediately. Some of the reasons forcing them to move during winter could be family issues, financial constraints, and job relocation. In addition, if the property has spent many cumulative days on the market, sellers are often more eager to enter a negotiation. When sellers are motivated, the real estate investor has the upper hand when it comes to negotiating the terms of sale, purchase price, and anything else that comes with the transaction. In other words, winter is usually a buyer’s market.
2. Allows for Home Inspection in a Challenging Climate
Winter is usually the toughest season for properties, whether in places like Washington that see a lot of snow or even locations like Los Angeles, Las Vegas or San Diego that may see more rain during this time than in other seasons. Therefore, shopping for a house in winter allows you to inspect the investment property under stressful conditions before you sign on the dotted line. Does ice accumulate on the roof? Does cold air seep in under doors or through windows? Are there any leaks? Is the heating system generating enough heat? These are some of the questions you need to ask when inspecting the investment property.
3. Less Buyer Competition
Since spring and summer are seen as the best time of year to buy a house, the real estate market is busiest during those months. More listings and intense real estate bidding wars are common real estate market trends in these seasons. However, this activity begins to fade through fall and into winter. Very few real estate investors are willing to brave the cold weather and walk through the snow to look at investment properties. Though the housing inventory levels are lower during winter, it is the best time to buy a house since there is less competition from other buyers. You will have an advantage when negotiating prices with sellers and higher chances of closing deals. Christmas day especially can be a great day to buy a house for investment as most people will be celebrating.
4. Lower Sale Prices
The prices in any housing market are influenced by the law of supply and demand. When demand is low, sellers don’t have an option but to lower their prices. Therefore, buyers that go shopping during the winter season have a higher chance of finding great real estate deals.
5. Realtors Are Less Busy
The busiest seasons for realtors are usually summer and spring when most people are looking for homes. Since fewer people are hunting for a property in winter, this is the best time to invest in real estate if you want to work with a real estate agent. Realtors can devote more time to meeting your needs since they are not busy.
6. Favorable Mortgage Rates
If you intend to take out a mortgage for a house, winter is the best time of year to buy a house and get a favorable interest rate from your lender. Since fewer customers are applying for home loans in December, January, and February, there is a higher chance of getting better financing terms. This could save you lots of money in the long run. Winter 2019/2020, specifically, is experiencing low mortgage rates so take advantage of them now!
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5 Tips for Buying an Investment Property in the Winter Real Estate Market
The following are some tips to keep in mind when buying an income property during winter:
- Weigh the pros and cons – Though buying a house during winter has many benefits, it also comes with some drawbacks. First, low temperatures can present a great challenge for property buyers. Moving around and viewing houses in a difficult terrain can be a very unpleasant experience. In addition, you might not be able to inspect the investment property properly during this season. Since real estate listings are lower during winter, you have fewer options to choose from. This means that you could be forced to settle for a property that doesn’t meet your criteria. Examine the advantages and disadvantages before making a decision.
- Mind your due diligence – As mentioned in the previous point, winter weather conditions make it difficult to inspect specific sections of the investment property. However, don’t make the mistake of overlooking a thorough home inspection before purchasing. This could mean hiring a professional that is skilled in inspecting homes during winter. You should also ask for paperwork that supports what you cannot see. For example, does the homeowner have building permits or receipts showing when the roof was last replaced? To protect yourself, be sure to include a home inspection contingency in the purchase agreement. This gives you time to carry out inspections and negotiate any repairs needed.
- Don’t settle for less – Having fewer listings can be an advantage if it helps narrow the scope of your investment property search. However, if you cannot find exactly what you are looking for in the options available, don’t feel pressurized to buy. Simply move on and check the next listing, even if it means waiting until the hotter spring real estate market.
- Make the right offer – Pricing is crucial when buying property during winter. Before making an offer on a house, work with your real estate agent to evaluate the seller’s motivation level. If you offer a price that is too low, the seller could get offended. Making an offer that is just right will enhance your chances of success. Learn More: How Much to Offer on a House: An Investor’s Guide.
- Plan for the unforeseeable – The winter season often comes with many weather-related delays. For example, a snowstorm could stop the renovation of the heating or plumbing system. Such delays can be a problem especially when the move-in for tenants or closing date is close. You can alleviate a lot of frustration for the seller and yourself by creating some buffer time before the closing date.