A HOME FOR THE HOLIDAYS

Want to get the best deal in real estate?   Shop in winter.     Other would-be buyers tend to hibernate during the holiday season and the post-holiday bitter months of January and February.     That’s exactly the best time to go out and shop – you will tend to have more negotiating power and find better prices and deals in winter due to the predictable dearth of winter shoppers.

A common scenario:   The seller who is being transferred out of state for work.   In that situation, the buyer tends to be highly motivated to sell quickly so she can relocate for her promotion – which could mean a better deal for you.    Maybe that seller will pay for your closing costs and throw in a 1-year home warranty on major mechanicals, too.   So, dress in layers, drive safely, and get ready to make a great deal out of the housing winter wonderland.

That the dead of winter is an opportune time for buyers is bittersweet this year, with the recently announced extension of the first-time homebuyer’s tax credit (10% of the home price, up to $8000), not to mention the tax credit for existing homeowners ($6500).   This winter, there might be more bidding competition than usual if you’re a buyer.

Are you ready to find your home?   Succeed in meeting the tax credit closing date of June 30, 2010 by following these five tips:

Start looking at property NOW.     Remember, you will have competition–perhaps intense competition thanks to the extension of a great government program.     It’s an exciting time, and people are taking advantage of the tax credit, which is not only for housing market first timers but also for next timers this time around.   The translation could be a far more competitive winter scene for buyers.

Don’t expect an extension on the extension.   There may be no more tax credits after this one, so you might not again have the opportunity to receive $8000 as a first timer or $6500 as a next timer.    Also, remember that 2010 is a midterm election year, so the tide could turn significantly as far as government assistance for homebuyers, not unlike the Pell grant for students, in another political climate.

Beware, interest rates.   Right now, interest rates are historically low, in the neighborhood of 5% on a 30-year fixed rate.   Those rates will not likely stay low as the government purchase of mortgage-backed securities diminishes.       A percentage point or two could drastically affect how much home you can afford.   Right now, you can get a great deal more for a great deal less with such rock-bottom interest rates.

Keep in touch with your lender.    Contact me to find an ethical and experienced lender.   The lender will take good care of your transaction, likely the largest purchase of your lifetime.     Although I will put you in capable hands, be sure to do your part in getting needed paperwork together and submit it to your lender as efficiently as possible.    Also, try to avoid short sales-when someone sells for less than he owes on his property.    Your short sale may seem like a great deal, but there is no guarantee that you’ll close by the deadline-if at all.   Should you get to closing, you might regret having bought someone else’s fixer upper that cost you less up front but may well end up costing you more over time, with endless repairs and updates that he couldn’t afford-or didn’t bother–to make.

Do it the traditional way.   Real estate is returning to traditions that have historically worked well in the past.    One of the best traditions is the trusty 30-year mortgage (which you can on your own terms cut to a 15-year mortgage if you submit 13 payments a year, by the way).     Although time is of the essence, make sure you fall in love with your home, and by all means have your home inspected.     A time crunch should not mean settling just because you could get a tax credit.   Start now (see #1) and you can stave off a very unpleasant deadline frenzy.

Happy holiday home shopping!