October is the Month to Buy a New Home
Why October?
As it turns out, when you buy your home can be just as important as where you buy it. The market is always in flux and after analyzing real estate sales for 15 years RealtyTrac analysts have found October to be the best month to buy a new home. RealtyTrac Vice President Daren Blomquist says, “On average, October buyers get a 2.6 percent discount below estimated market value…It’s that middle month between the summer selling season and the holidays.” Holiday discounts aren’t the only thing motivating buyers.
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Sellers are motivated and willing to negotiate
Seller’s whose homes have been on the market all summer will be motivated to get their home off the market so they can move on with their lives. “Home prices often drop in October as sellers realize they’re on the shoulder of the home-buying season,” says Sandra O’Connor, regional Vice President of the National Association of Realtors out of North Carolina. Those searching for houses will find less competition as well, because families with kids have settled into a school-routine.
Interest rates will possibly rise
The threat of rising interest rates that has been present all summer is becoming more and more real as the year comes to an end. Rising interest rates will make the home on your radar less affordable so if you have money for the down payment and closing costs, Blomquist suggests you make the move sooner rather than later. Lower interest rates means you can get more house for your money.
Tax perks of the end-of-year
Talk to your CPA about this one, but there are some estimations you can make on your own before seeing your financial adviser. There is always a trade-off when deciding to take a standard deduction or to itemize your deductions, because your itemized deductions must be greater than your standard in order to optimize your tax-deduction. Add up the interest and tax payments for your new home, as well as your mortgage insurance premium. There are other things to consider that will get you a deductible, such as adding energy-efficient upgrades which would allow you to deduct 30% of the cost. If the itemized amount is greater than the standard deduction then it would be wise to consider buying before the year ends.
System issues come to light with cold weather
In the cold weather, it is easier to feel a draft and to find problems with a home’s insulation and heating and drainage systems. Hiring an inspector to take a closer look at these things is a good idea regardless, as they will be able to analyze the wear and tear of the systems, but the colder weather makes it easier for you to make an early decision on the house. Things like the amount of leaves in the gutters can give you an indication of how well the previous homeowners have taken care of the home.
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