The hottest real estate season is typically the summer — so hot that 50% of the homes are sold during the summer. The reason for this is that kids are out of school and it’s often the best time for families to make a move. It also gives them time to settle into a new home before the school year start. The warmer temperatures also make moves easier. The summer is not the only time one should purchase a home.
Some folks would not dare buy a home right before the end of the year. With all the end of year activities why add a big event of a move. Buying a home before the end of the year even though it’s not the most ideal it may be best from a financial standpoint. Here are some reasons to buy a home before the end of the year.
Tax Benefits
Your tax liability can be lowered with a home purchase by allowing you another tax deduction. This would let you to have a lower tax bracket.
With tax deductions, every little bit counts. When you purchase a home at the end of the year and close on or before December 31, you can use mortgage-related deductions. The deductions from mortgage interest, property taxes, and interest costs/points. These deductions can save your taxable income by thousands and save you hundreds of dollars.
You can also have access to these deductions even if you close after January 1, but you would have to wait until the following year for your tax returns.
More Opportunity to Negotiate with Motivated Sellers
December is a cold and can be a rainy month, and most people do not want the headache of moving during this time of year. With Christmas right around the corner with the smaller pool of buyers this is not good news for sellers, but its good for buyers who stick it out. The smaller pool of buyers can serve to your advantage and can give you a bump in your negotiating power when you submit an offer to a house. If a property does not receive a lot of traffic they may drop the price, offer to pay part of the closing costs or could offer other incentives like appliances or a home warranty deal.
Receive Builder Incentives
A slower market effects not only resale properties but also home builders. To attract more sales during this time of year builders will also offer extra incentives such as discounts on asking price or builder credit toward upgrades or offer closing costs.
Competitive Moving Prices
Another item to consider is that end of the year also impacts moving prices. If you will use a moving company end of the year is the time to book them. The spring and summer are their busiest month. Some movers even have waitlists during their peak season. That of course if a different story in the winter. Some companies are not even busy this time of year and will offer discounts for their services as you can price out many companies and choose from the lowest bid.
Homestead Exemption
The state of Texas has no state tax and gets most of its taxes from sales tax and property taxes. A Homestead Exemption lowers your taxes by reducing the taxable value of your home. You must live in the house by Jan. 1 of the tax year and live in that residence as your primary home.
You Have Time to Move and Unpack
Many people have employers that give them time off during the holidays and moving in this time would allow you to take advantage that you don’t have to be at work. This would allow you to move and unpack during the time off before you have to be back at work.
Increase in Interest Rates
One more thing to consider is the increased interest rates. The Federal Reserve will evaluate the current economy and will decide if interest rates will once again be increased. Currently, interest rates are around 4.65% and it’s predicted that they will rise to 5.1% in 2019.
If you have questions or need help deciding on buying or selling a home please call me and I can assist you.