Your home purchase is one of the biggest and most important investments you’ll make in your lifetime. It’s important to not only choose the right house for you, your family and your future, but it is also just as crucial to make your offer at the right time. Most potential homebuyers who are in the market for a property are aware of fluctuations in their local markets as they relate to inventory and pricing. However, there are many other factors to consider when you’re timing your next real estate purchase.
Planning out the timing for buying your new home can save you money and can sometimes make your closing process much easier and faster. While a new home purchase can be exciting and you probably want to jump into the shopping process, consider waiting until the time is right if you can. If you’re not sure whether now is the right time to pounce on a home for sale, here are five of the best times to buy a home, no matter where you plan to live.
1. When You Don’t Have Competition
There’s nothing better than an empty supermarket when you’re shopping for groceries. You get your prime pick of food items and you have plenty of staff to help you with all your needs. If you want the local housing market all to yourself, you’ll need to time your house shopping for a time when there are not a ton of other local browsers in the market.
You will usually have the most competition during the spring months, including April and May. During these months, many potential buyers start to investigate the housing market in the area. This is an easy time for many potential shoppers to look around since the holidays are over, the weather is usually favorable and the kids are still in school. While most of these home browsers are not serious about buying and are simply looking at current prices and market trends, they can make home sellers feel like there is plenty of interest stirring up around their properties. This gives you less potential to negotiate prices with sellers, even if you are one of the few serious potential buyers looking at a home.
2. Right When Home Prices Dip
To save the most money, you will definitely need to find a home with a reasonable listing price and a seller who is motivated to negotiate. Keep in mind that the exact time you begin to search for a home can have a huge impact on the price you will pay. It is important to start searching as soon as the prices in your desired area improve. If you wait too long to see just how low these home prices will fall, you may miss your opportunity to get a great deal.
When home prices begin to fall, any local resident who was even remotely dreaming about purchasing property usually begins to seriously shop. The market can become flooded with buyers, driving the home prices back up and making it hard to secure a good purchase without fighting off several other interested buyers. When home prices are consistently low and buyers inundate the market, you have to deal with these drawbacks:
- Finding several homes you desire. Since there are so many buyers, homes will fly off the market quickly.
- Submitting multiple offers on homes. To ensure you will snag one of your potential homes, you’ll need to submit multiple offers on different homes, which can be stressful and disappointing.
- Getting outbid for listings. In a busy market, homes may sell for higher than listing price, making it easy to be outbid on a home you want to purchase.
- Slow service from closing agencies. Title companies and closing agencies become overwhelmed by the influx of business and closing times can be delayed.
These characteristics of a busy market can make it tough to get what you want at a price you can afford. However, if you jump into the market as soon as you notice prices falling, you may be able to snag a deal before the market becomes saturated and bidding wars begin.
3. When Interest Rates Are Favorable
If you’re planning to finance your home purchase, it’s not enough to continuously observe home prices in your desired location. You’ll also need to keep a close eye on interest rates or special financing options that you qualify for. Even if you feel current home prices are not at rock-bottom, you might still want to make a purchase if you can obtain:
- A low interest rate.
- Down payment assistance.
- Additional financing incentives.
There are usually federal assistance programs available for first-time homebuyers, VA loan borrowers or other types of financing options. If one of these generous temporary assistance programs applies to you, you should look into the terms, conditions and expiration dates of the offers and attempt to purchase a home within the parameters, if possible.
It is also important to pay close attention to limited time promotions that your mortgage company or loan provider offers, such as no closing costs or free home warranties. These discounts won’t be around forever, so do the math to see if taking advantage of the offer will end up getting you the best deal on a new home.
4. When You’re Ready
While figuring out the best time to buy a home based on the market is important, you should also analyze yourself and your own financial situation before putting in an offer on a home. Don’t rush into making one of the biggest purchases of your life simply because it’s springtime and home prices have just decreased in the area. Make sure you’re prepared for all the responsibility that comes with homeownership, including the down payment and monthly mortgage payments that will be expected of you.
Owning a home is a major responsibility that requires your constant attention, care and commitment. Before you begin to look into the homes for sale in your desired area, ensure you’re ready to take on homeownership and consider your current commitments. You’ll need to make time to:
- Shop for homes.
- Submit offers with a real estate agent.
- Obtain a loan.
- Complete the necessary paperwork.
- Attend the closing.
If you’re not ready for the time and financial commitment it takes to purchase a home, it’s simply not the right time for you to shop the market.
Choosing the best time to buy a home can save you money and make the transition into homeownership easier on you and your family. If you shop for homes in the spring months when there’s less competition, jump in right when home prices decrease, take advantage of favorable interest rates and wait until you’re ready, you can rest easy knowing you picked the perfect time to make your purchase. Follow these tips before you begin your search and you’ll soon find your perfect property at the perfect time.