Five reasons to make a home purchase at the end of the year:
1. Tax Benefits
If you are self-employed or in a higher tax bracket and need every allowable tax deduction available to you, buying before the end of the year can lower your tax liability.
When it comes to tax deductions, every little bit counts. If you purchase a house at the end of the year and close on or before December 31, you’re eligible for mortgage-related deductions. These include deductions for mortgage interest, property taxes, interest costs and points, which can reduce your taxable income by thousands and save you hundreds.
You can still take advantage of these deductions if your mortgage closes after January 1, but you’ll have to wait until the following year when you file your tax return. If you need additional savings for the current tax year, the sooner you buy the better.
2. More Opportunity to Negotiate with Motivated Sellers
In many parts of the country, December is a cold and rainy month, and most people don’t want the headache of moving under these conditions. And since Christmas is right around the corner, others don’t want to jump into a major purchase at the end of the year, so they postpone shopping for a house until after the New Year. This results in a smaller pool of buyers, which isn’t the best news for sellers, but it is good news for buyers who stick it out.
A smaller pool of buyers serves your advantage and gives you increased negotiating power when submitting an offer for a house. If a property doesn’t receive a lot of foot traffic and little interest, some sellers become desperate and entertain any and all offers. If a seller is motivated and doesn’t want to wait two months for traffic to pick up, they may drop the asking price, offer to pay all or a percentage of your closing costs, or offer other incentives like appliances or a home warranty to close the deal.
3. Receive Builder Incentives
Slowdowns during the end of the year don’t only affect sellers of resale properties, but also new construction homebuilders. To attract interest and boost sales during this time of year, some builders toss in extra incentives, such as a builder credit toward upgrades, discounts on the asking price or paid closing costs.
4. Competitive Moving Prices
The slowdown during the end of the year also impacts moving prices. If you’re thinking about hiring a moving company, this is the time to book. The summer and spring months are the two busiest seasons for moving. Some movers have to put customers on a wait list, and due to greater demand, some companies charge more for standard services. It’s a different story during the winter. Some moving companies aren’t busy this time of the year, which means you have more companies to choose from. And since there are more options, some companies may discount their services to stay competitive.
5. You Have Time to Move and Unpack
Coordinating a move takes time and energy, and the whole process can be a headache if you’re juggling a move and full-time work. Ideally, you should plan a move when you have time off from work. I know of several big and small companies that shut down for one or two weeks at the end of the year. If your employer offers time off around the holiday season, this might be the perfect time to buy a house because you’ll have time to move and unpack before heading back to work.
Post Credit: Homefinder