Looking for a Bargain?
A new release from RE/MAX emphasizes what we’ve been saying for many years: The winter season is a great time to buy a home if you don’t want to pay top dollar. While areas like Southern California may not see much, if any, of a seasonal price break because of a lack of winter, bargains may await buyers in places that see cold and snow.
Jeff LaGrange, Vice President of the RE/MAX Northern Illinois Region, explained that, “In the Midwest, homes that go under contract in November, December and January usually are offered by highly motivated sellers. In spring and summer, purchasers may pay a premium because they compete with many other buyers. Less competition in winter means prices typically don’t include that premium, and sellers frequently are more flexible about price and other terms.”
It’s that flexibility that is often key to a successful closing. So how can you use the time of year to your advantage to buy a home? Here are a few tips.
Be ready to negotiate
“When you have fewer buyers in the market, supply exceeds demand,” said The Spruce. “This usually results in prices being lower than during the hot or peak season.”
In northern Illinois, “Chicago-area homes sold in February had a median sales price that averaged 17.8% less than homes sold in June of the same year” over the past 14 years, said LaGrange. But, that doesn’t mean you can lowball and come away with a new home. You never want to insult the seller, who can flat out reject your offer if they so choose. Allowing your real estate agent to guide the process to come away with a good deal for you that doesn’t turn off the seller is key.
Creative negotiating may also help you get the home. Be willing to look at scenarios involving closing costs, repairs to items uncovered during the inspection, and even renting back if needed to help get a deal done.
Be ready to tour a home on a moment’s notice
OK, maybe not on a moment’s notice. But being flexible with your home tours is important in a winter weather-prone area. “With fewer hours of daylight, it may be necessary to visit more homes after dark, a less than ideal situation,” said RE/MAX. “When that happens, it makes sense to arrange a daylight visit before making an offer, and that can involve taking time off work,” said Linda Dore, a broker with RE/MAX Synergy in Orland Park, Ill, “but it’s worth it.”
Make sure your agent is winter savvy
Vacant homes can throw a wrinkle into any buyer’s plans, especially if a storm has left the home in less than hospitable condition. You never know when you’re going to have to MacGyver a situation. “These days, more homes than ever are vacant when they go on the market, and you never know what to expect,” said Donna Smolak of RE/MAX Vision 212 in Chicago. “Some can be beautifully maintained, but in other cases there can be six-inches of snow in the driveway, the storm door many be frozen shut or the whole home may be winterized with the heat and plumbing out of service,”’ she said. “I always bring a fold-up shovel with me in case a car gets stuck or we want to scrape snow off an outdoor area to check what’s underneath.”
Use your imagination
Vacant homes can also pose a challenge to buyers who lack the ability to envision what the home may look like with their furniture inside. But buyers are notoriously bad at seeing past paint colors or décor in any home. Especially when you’re dealing with a home that may not be everything you want, it’s important to try to look beyond any poor decorating choices or even some curious floorplan issues to see what the home can be.
Remember that if the house were perfect, it would either be more expensive, would have been sold quickly in the spring or summer, or both. Try to focus on things like overall space, ceiling height, and natural light. That will help you see the potential in the space and plan for changes once the home is yours.
Keep the goal in mind
Buyers in the winter often “have a real need to buy quickly, perhaps because of a work-related relocation, the arrival of a new baby or dealing with a divorce,” said Dore. It’s easier to let the small stuff go if you remember what you’re trying to achieve. And if that doesn’t work, think about: “This year they should have an added incentive as mortgage interest rates are likely headed higher in 2019.”