Find a bargain before the holidays with these house hunting and negotiating strategies
By Shannon Petrie, FrontDoor.com | Published: 7/02/2010
#2: Seek out motivated sellers. If you’re hunting for a bargain, it’s important to distinguish the sellers who are eager to unload their properties from the ones who are just testing the market. Some sellers who list their homes in the fall are on a deadline to sell before the holidays. Working with these sellers is a great way to find a good buy, as they may be willing to come down in price to quickly close a deal. Other sellers who aren’t in a rush most likely won’t budge on price, so work with a real estate agent to find the flexible sellers instead.
#3: Look for slow-movers and price reductions. Some of the homes you’ll find for sale in the fall have actually been on the market since spring or summer. The sellers may have been overly optimistic about their asking prices when they first listed their homes, but as the holidays creep closer, more and more will slash their prices to make a sale. You can often find these properties simply by searching homes for sale online. Many online listings indicate how long a home has been on the market or if the price has been reduced. You can also ask the listing agent for this information.
#4: Negotiate your lender’s fees and terms. Home loans are less in demand in the fall, so some lenders may be willing to forgo certain fees to get your business. Shop around and get offers from at least three lenders, then compare interest rates and terms and negotiate. Don’t be afraid to tell one lender what another is offering to see if he’s willing to beat the deal. Be sure to get pre-approved for a loan before you start shopping for a home — it shows sellers you’re serious and eligible to buy.
#5: Explore new construction. Fall through early winter is the best time of year to get a bargain on a brand-new home. Builders usually start discounting their inventory or offering incentives around September to sell as many homes as possible before the end of the year. When spring rolls around, prices on these homes go back up as demand rises.
#6: Look for fall maintenance issues. Shopping for a home in the fall gives you the opportunity to look for red flags that may not be noticeable during other seasons. For instance, when touring a home, take a look at its gutters and downspouts. If they’re overflowing with leaves, you know the seller hasn’t taken the time to clean them. If they’re not keeping up with their gutters, what other home maintenance items have they overlooked?
#7: Hire a great real estate agent. Sellers are more likely to negotiate with you during the fall, even if you make a lowball offer. But unless you’re a master negotiator, working with a top-notch real estate agent is crucial to making solid offers and getting a good deal. Your agent can also help you navigate the fall housing market — since inventory will be lower than in the spring, he or she can pinpoint the homes that fit your needs.
#8: Make a strategic offer. While you’ll have some competition from other buyers trying to find a home before the holidays, the fall season is not as busy for real estate as spring. Since there’s less demand, you might be able to make a lower offer on a home. As long as your offer is reasonable, motivated sellers could very well be willing to negotiate. Work with your real estate agent to form a solid offer.
#9: Ask for concessions. If you want to save cash at closing, ask your lender about seller concessions. Also called seller contributions, this is an agreement in which the seller pays part or all of your closing costs, which can include mortgage fees, title company fees, points, homeowners association fees and more. Seller concessions typically range from 2 to 9 percent of the purchase price; the specific amount your seller can contribute depends on what type of loan you get and how much you borrow from the lender.
#10: Time your taxes. If you close on your home before Dec. 31, you can deduct mortgage interest, property taxes and points on your income tax return for that year. These deductions can save you a lot of money, particularly in the early years of your loan when you’re paying a lot of interest.If you’re an investor who’s planning to sell a property as well, you may be able to defer your capital-gains taxes with a 1031 exchange. Also known as a tax deferred exchange, this transaction allows you to trade a property for a “like-kind” property without immediate tax liability. After transferring one property, the window for acquiring a new property is 180 days or before the next tax filing deadline — whichever comes first.