Ask Andrew – Pros and Cons about Purchasing in the Winter
by: Andrew Goodman
Q: Should I consider purchasing in the winter months?
A: The question on many buyers’ minds is “When is the best time to purchase?”
In my opinion, the best time to purchase is in the winter, around the holidays. However, there are some things to consider before deciding whether or not the winter is the best time for you to purchase. Please note, the following are generalizations and just my opinions.
Price: Typically a buyer will be able to purchase a property in the winter at a better price than any other time of the year. The reason being:
- There are usually less buyers looking to purchase on or around the holidays due to them purchasing holiday gifts as well as many folks traveling, so there will be less buyer competition.
- More sellers are willing to sell at a lower price in the winter because they know less people are looking due to the holidays, so they would rather entertain a contract in hand versus waiting through the winter for a hopeful spring market (if they need to sell asap).
- Homes typically sit on the market longer in the winter, which leaves an opportunity to negotiate and reduces the chances of a bidding war.
Inventory: One of the cons to purchasing in the winter is the lack of new inventory. Due to the items mentioned about price, many sellers will hold off on listing their property until the spring market hits. Many homes that are on the market in the winter are due to the fact that they didn’t sell in the fall (so they could have been on the market for a while) or that a seller needs to sell asap.
Loan Process: It is normally quite difficult to close on a home in the winter months due to the holidays. Lenders are people too and want to spend time with their families during the holidays. So many lenders do not work on or around the holidays, which normally slows down the loan process quite a bit. Please note, this is not all lenders, but most. Some lenders do work around the clock, including holidays.
Depending on the location, the spring market usually calls for better inventory, more buyers, bidding wars, etc. This is not in all markets or every year, but the spring market usually brings out more buyers, which leads to more competition. So the question is up to you. Would you rather purchase in the winter and potentially get a home for a better price, or wait until the spring in hopes to find a home that better meets your needs, but risk the chance of being in a bidding war?
Me, personally, I’d rather purchase in the winter because I would rather purchase a home at a lower price. If a home were not 100% up to my liking, the money I could save by purchasing it in the winter could allow me to update, renovate, or remodel the home the way I wanted it. I feel that by purchasing in the spring I could potentially purchase a home that could fit more of my needs, but I may have to pay above and beyond to get it. I also believe that homes that are on the market in the winter are possibly on the market because the seller(s) must sell for one reason or another. Again, this is just my opinion.
Happy House Hunting and Happy Holidays!