Conventional wisdom states that the winter is the worst time to buy or sell a house. After all, no one wants to go out looking for homes or move when it’s cold, dark, and rainy, fewer homes are for sale, and people don’t want to upend their family during the holidays, right?
Not at all. In fact, the winter months are some of the best times for both motivated sellers and savvy buyers, as amazing deals and efficient transactions abound. That was the conclusion of study by a noted large national real estate site, which tracked thousands of real estate sales and purchases for a four-year period. Their data revealed:
- Homes sold between December and March – the winter months – sold faster than homes listed in other months and for more money.
- Listings in December sold for above asking price 17 percent of the time, which was the highest rate of any month the entire year.
- February was by far the best month of the year to sell a home quickly, with 74 percent homes selling within 90 days on average, and 13 percent selling for more than asking price!
- To put that in perspective, only 61 percent of homes listed in September sell within 90 days, and homes sold in October only go for above asking price 5 percent of the time.
- The data didn’t deviate in cities with cold or inclement weather.
So why is listing your home for sale or purchasing a home so lucrative in the winter? Here, we break down five reasons for buyers and five reasons for sellers.
Why you should buy a house in the winter:
- Less competition
There are far fewer buyers out looking for homes in the winter months, as the bulk of homes sales occur in the hotter and more favorable spring and summer months. Less buyers means less competition – and better deals.
- Motivated sellers
If someone lists their home for sale in the winter and especially during the holidays, they probably don’t just want to sell but need to sell. It could be a financial issue, move out of town for a new job, or a divorce, but whatever reason, motivated winter sellers are more likely to consider lower prices.
- Room for negotiation
For that same reason, sellers during the winter months are more likely to submit a counter offer instead of outright rejecting offers. Once the negotiation starts, all kinds of great terms, amenities, conditions, and of course a price that’s favorable to the buyer are on the table.
- No time to waste
Sellers in the winter months tend to be far more realistic since they don’t have time to waste – yours or their own. You can usually get your offer accepted, get into escrow, and close a deal a lot more efficiently in December, January February since sellers are extremely eager and value every serious offer.
- Tax benefits
There are huge tax benefits to purchasing a home before the end of the year. In fact, prepaid mortgage interest and even some closing costs are tax deductible, and you can realize those benefits on this year’s return if you close your sale in December. Of course you should consult your CPA or tax professional to learn more.
Why you should sell your house in the winter:
- Serious buyers
Sellers may be highly motivated to sell during the winter months, but so are buyers, who wouldn’t take the time and energy searching for homes and writing offers if they weren’t serious. Many buyers want to close a sale in December for tax purposes or get into a home as soon as possible to enjoy some of the holidays if possible.
- Holiday Decorations
Remember that a buyer doesn’t just want to buy a house, but a home, and that includes the ability to envision their family in the home as well as feelings of nostalgia and warmth, all significant factors. During the winter months, homes may be better decorated with holiday decorations, which will easily invoke these positive feelings with buyers, yielding great offers.
- It’s easier for your home to stand out
There are far fewer homes listed for sale in winter months, which can be a huge advantage for a smart seller if their home is priced fairly, staged well, and well maintained. It’s far easier to shine and attract buyers in the winter months than it is during the warmer months, where home listings increase exponentially.
4. Faster closings
Don’t things always take longer during the holidays because of days off and more distractions? Not necessarily in the real estate industry, as agents, loan officers, underwriters, banks, appraisers, home inspectors, and title and escrow professionals all have far less work in the winter months, which means they can get to your home/file sooner and finish their job quickly. When both parties are cooperative and motivated, winter closings can sometimes go shockingly fast.
5. Fewer contingent buyers
In the winter months, you’re far less likely to run into buyers who make contingent offers, which means they have to sell their own home first. While there is a time and place for contingent offers, sellers are wise to avoid them if possible because of the guesswork and uncertainty involved. During the winter months and the holidays, buyers are largely ready to go with non-contingent purchase offers.