For most of 2014 San Antonio has been a Seller’s Market which means that Sellers have had the advantage in negotiations and pricing because there were more people out buying homes than there were homes for sale. Buyers had to contend with multiple offers on properties that had only been listed for a few days, final sale prices going above listing price, and Sellers who were willing to make little or no repairs because the next Buyer in line would buy the house and not ask for anything. The good news is that with the winter months upon us and the holiday season starting, Buyers may benefit from seasonally decreased demand.
Which party has the upper hand in home sale negotiations is a function of basic economic supply and demand: the more houses for sale (supply) the stronger the Buyer’s position, the more Buyers out looking (demand) the stronger the Seller’s position. Using history as our guide, there will be fewer Buyers out looking to purchase a new home and move during the cold months and the holiday season. If you don’t have to move, you’re probably going to put it off during the holidays. This means that Sellers who have a home that is still on the market from the summer, or who have to sell right now because of their work or family situation, are going to have to compete for fewer Buyers. This seasonal reduction in demand could last through April or May of next year when it starts warming up and children are out of school, although in 2014 demand started the year off strong in January and February. Next summer has every indication of being another strong sales season and Sellers will likely have the upper hand once again; so if you are buying a home and can take advantage of this short window, do it.
My best advice for buying in the winter months really comes down to three key points: (1) make sure you have a thorough, persistent and experienced Realtor; (2) be as flexible as possible with showings; and (3) have your lender Pre-Approval done and ready to go.
- Having the right Realtor can make all the difference when you’re trying to purchase a house at this time of year. Lenders, Inspectors, Appraisers and Title Companies all take holiday vacations too and pushing a transaction through takes skill and strong relationships. A Realtor who has requested 30 inspections this year can pull a favor with an inspector who is heading out on vacation to do “just one last inspection.” A Realtor with hundreds of sales under their belt will be able to keep on top of all parties involved to maintain a very tight scheduling window and will also be able to identify problems and address them in advance.
- When requesting showings try to understand that the Seller probably has family in town, has children out of school and that their home is the focal point for all of their holiday plans. You may not be able to schedule all of the home that you would like to see in a row, and you may get rescheduled at the last minute. The house may also be heavily decorated for the holiday and overly stuffed inside with visitor’s luggage, blow up beds and extra rooms converted to bedrooms. Try to see past all of that to the actual home itself.
- Very few items can derail a home transaction like a letter from a lender who did not review your documents ahead of time. Make sure that your lender has looked at your income, your bank statements and pulled your credit. Any lender who issues you a letter without doing those things is wasting your time, your Realtor’s time and the Seller’s time when you have a contract. In the middle of a tight holiday transaction and with your money on the line (option fee, earnest money, cost of the inspection & cost of the appraisal) is not the time for your lender to figure out that you are self-employed or that you’ve been the victim of identity theft on your credit report.
The next few months can be a great opportunity for Buyers who have been fighting all summer to get a fair deal on a well maintained home. Be prepared, have a good Realtor and good luck!