That's right, you heard me. November and December are almost always the best time of year to buy a real estate deal. The reason why is pretty simple.
(1) There are fewer buyers in the marketplace, and (2) sellers are much more motivated than in other times of the year because of tax reasons. Let me elaborate a little bit here.
#1. The reason there are few buyers is obvious. November and December starts the holiday season with Thanksgiving, Christmas, Hanukkah, Kwanzaa, New Years, and whatever other new holiday might pop up that I don't know about yet. Buyers are busy shopping, attending parties, cooking, traveling, church events, etc., and are simply distracted by all the other activities associated with these holidays. I expect this year to have much fewer real estate buyers simply because of the economy which will make sellers that much more motivated.
#2. Sellers are motivated because December 31 is the end of the fiscal 4th quarter and the end of the fiscal year on income tax returns for most people and most corporations - including corporate short sale and REO departments. I have seen banks literally slash their price by 50% just because a buyer could close before the end of the year. Trust me it is a big deal to the REO and short sale lenders to close by 12/31.
Here are a few examples from years past:
In 2007, a partner and I bought a house listed at $150,000 in MLS as a bank REO. We closed right before Christmas last year for $85,000. If you pull up MLS you would see that the list price is 150K and the sale price is 85K - that's 56% of the list price.
In 2004, I purchased 2 houses between Christmas and New Years. Both were short sales with pending auction dates. In order to get the sales postponed, I had to guarantee to close before 12/31/04. One was in Longwood, I bought it for 75K and 3 months later when I refinanced it appraised for 155K -- that's 48% of the after repaired value. The other in Deltona, I bought for 81K and resold it 4 months later for 159K -- that's 51% below market.
Currently in 2008 we have 2 pending deals where the bank REO department is selling properties for under $25,000 because the buyer will close in December. I don't know about you, but I don't know any single-family properties in Central Florida that would sell for that cheap in normal circumstances. Heck, one of these properties is a duplex.
Many people like to set goals for the new year (in January 2009). However, if you wait until then you will have missed a golden opportunity to buy something in December. I guarantee you the price in December is always far less than the price in January because now you are in a new tax year. You just have to make LOWBALL ridiculous offers -- you will be surprised at how many will actually get accepted or at least countered close to your price.
There are thousands of short sale and REO foreclosure properties for sale in Central Florida and metro Orlando that we can help you offer on. Our office personally has over 100 foreclosure deals listed right at this very moment, and new ones become available every week.
So what are you waiting for??? Get out there and steal a deal before the end of 2008. The weather in December might be frightful but your wallet will be so delightful when you pay near 50% or so of retail for that next property.
---------------------------------------------------------------------------------------------------------------------
(Copyright © 2008. Sand Dollar Realty Group, Inc. All rights reserved.) Subscribe to my blog via RSS feed.
Rob Arnold - Your full service and investor friendly Realtor(R) in Orlando and Central Florida.
ABR, CPL, CRB, CSP, GRI, Managing real estate broker, Licensed mortgage broker, Notary Public
407-389-7318 / 1-877-389-7318 www.SDRhouses.com/ We Buy Houses Florida
We sell foreclosures, short sales, and bank owned REO properties throughout Central Florida. We sell and list Central Florida real estate and Orlando real estate. Free list of foreclosure and short sale houses available.
I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central & South Florida, the Space Coast, and the Treasure Coast including Orlando, Winter Park, Maitland, Ocoee, Winter Garden, Apopka, Altamonte Springs, Casselberry, Longwood, Winter Springs, Oviedo, Lake Mary, Sanford, Deltona, Debary, Deland, Mount Dora, Eustis, Clermont, Kissimmee, Winter Haven, Lakeland, Tampa, Sarasota, Bradenton, Miami-Dade, Fort Lauderdale, West Palm Beach, Port Saint Lucie, Melbourne, Daytona Beach, Ocala, Gainesville, Volusia, Brevard, and more.
Comments(3)