Is there a Best Time to Make an Offer on a House?
We recently posted about the best time of year to list your home – spring – and best day of the week to list – Thursday – but is there a best month to buy?
Although many experts say the best month to make an offer on a house is January (and we’re almost at the end of that month), there’s also a best day of the month to make an offer on a house – the first Tuesday.
The housing market, a reliable economy forecaster, seems to be bouncing back from a long period of stagnation. Many of the nation’s largest home builders surprised analysts by reporting a profit in the quarter that just ended.
Home sales continue to rise nationwide, compared with 2011, and home prices also are up and rates are still low. All of this good news has been widely reported, so many people are thinking more about taking another look at the real estate market, both as buyers and as sellers. But how many of us know there are best times to buy and sell houses?
Here are some timing tips that can save our Solutions clients – home buyers and sellers – a lot of money:
The best day of the month to make an offer is the first Tuesday
Why early in the month? Because the homeowner just wrote a mortgage check for a house he no longer wants – or needs to sell — and he doesn’t want to write another one.
Why Tuesday? Because by Tuesday he’s starting to worry that he won’t get any offers from house hunters who saw the house the weekend before.
The best month to make an offer is January
Fewer buyers are willing to house-hunt during cold, miserable weather, so there’s less competition and few, if any, bidding wars.
Sellers also tend to be more motivated than they’ll be in the spring, when there are more buyers. Why? They may have just received their credit card bills that reflect Christmas spending and may be feeling financially insecure.
And their decision to try to sell their houses in the winter means they’re willing to risk listing during a time of the year when properties tend not show particularly well.
The best time of the year to sell is the spring
As we noted in our last blog, Buyers come out of the woodwork during the spring, and with tax refund checks in the bank, they often pay full price. In fact, sales peak in the spring, helping to explain why about 60% of those who move do so in the summer.
The best day of the week to list your house for sale is Thursday
As we’ve also noted, this is more true during a Sellers’ market, but if you list your house for sale on aThursday, it will be available right away for weekend showings and by Saturday — the most important day of the real-estate week — your house will have shown only two days.
That’s important because the fewer days on market, the better chance the home will attract a full-price offer. Even if your house doesn’t sell by thenext Saturday, it will still show only nine days on market, benefiting from the psychological advantage of a single-digit number.
Is there a best time to stop renting and buy?
A good way to check the figures is to find two similar houses – one for sale and one for rent – and divide the asking price by the annual rent. The difference is called the rent ratio.
During the 1970s, 1980s and 1990s, the nationwide rent ratio stayed between 10 and 14, then rose to nearly 19 in 2006, when the housing market topped out.
A rent ratio of 20 or more usually means that it costs considerably more to own than rent after you factor in the mortgage, taxes, insurance, repairs and other expenses. It makes financial sense to buy when the rent ratio is a lot closer to 10 than to 20.
Ask your Solutions agent to help you figure this rent ratio out and decide if buying now makes more sense than renting.