How about buying homes at year end?

By
Real Estate Agent with (408) 425-1601 CA bre 1519182

                                                                                      Sam Shueh

                                                                        Realty One Group

                                                                          Campbell, CA

I am a contrarian I have done fine avoid the competition and unnecessarily hassle.  I found our  home during  a Superbowl. The seller asked us what does it take to make an offer. I jokingly stated if it if they will consider a trade and pay for closing cost. They sellers said "OK". The sellers did well also. With a steep home appreciation at the time they sold our old home traded for a good profit.

 

In Silicon Valley, it has been a seller's market for decades. During the Great Recession, 260,000 tech jobs evaporated. Just a few years earlier, the Dot Com crisis shed  another 190,000 jobs. The distressed properties then comprised of 60% total sales. In the midst of Great Recession the investors jumped on the wagon bidding homes aggressively. A couple I have written 5 prior offers all were not accepted. During the year end, we went out and I got them a few choices. They kept thanking me as their child was on its way needing a bigger place.

 

With lower competition at year end most home sellers will consider all reasonable offers. This year in Saratoga, CA the estate home seller has dropped asking price a few times since summer. It was initially priced for a seller's market. Then demand for high end homes became soft. There were no new IPO offerings. Cash foreigners balked at the asking price. With not good earning news from Yahoo, Cisco, Twitter and Apple, people are wondering whether the stellar price level can be sustained? San Francisco rent dropped as high tech workers were leaving. Twitter and other high tech companies are reducing head count.

 

If one does not want to face the uncertainty of interest rate hike which is coming for certain, take note of these benefits listed and contact your realtor.  After New Year there is often a vacuum of no home sellers and all buyer. Often the inventory comes from probate or estate sales the condition of these neglected homes and greedy heirs are something people can live without having to deal with.        

A. Better price and less competition

The last month of the year is known for last minute shopping and holiday parties, vacation. Few even thought about for purchasing a home. This contrarian scheme works in your favor. With less competition of  buyers during the year end, the available homes for sale are less but they are more priced to sell. With less people looking, there’s less likelihood of  bidding wars, and escalator clauses. That being said I still got a multiple counter offer contract recently.  I told the agent if your client wants to play that game I will offer just $1K over as we already offered a lot more. We got the property. 

B. Sellers are more interested in looking at your offer

Many of the properties are homes that the sellers need to unload. Job relocation, probate sale, estate sales.  Home conditions were not a major reason why they do not move here. The turn key homes are gone quickly even not priced low.  The vacant homes are better candidates as owners need not to rent back and often they want it to live there for free

C. Tax benefits

Purchasing a home is good for your bottom line before year end. If you close by year end, you can deduct property taxes, mortgage interest, mortgage points, and interest costs. The tax benefits on closing cost for the investment properties are nice to have. In 2016 tax law allows first $1,000,000 in mortgage debt (the limit would be $500,000 if married and filing separately).  

D. Flexible schedules

Take advantage of the holidays to check out available inventory.  Your agent may have more time on their hands and willing to show more homes.

E. Lenders are available

Loan officers are willing to help you expediting the loan as their work load drops. Underwriter turn around time is more manageable. One needs to factor in the holidays to make sure the closing time is not on a holiday though.  

F. Discounts

The builder sales team have a quota and often they offer discounts or free upgrade to unload homes not yet sold. They operate the same as car fleet manager willing to strike a deal. Inventory carrying cost can hurt their bottom line.

 

 SOURCE:  

Shueh, Sam  How is my Silicon Valley home worth? (Silicon Valley Home Values

Silicon Valley Real Estate July 2016 (San Jose area real estate update

Shueh, Sam    (Real EstateBlogs

Shueh, Sam    (My Website)  

 

Sam Shueh Realtor    


 I've called San Francisco South Bay home for over 30 years. We love this area and all it has to offer, and I enjoy sharing what I know about homes.  I documented in several books about Silicon Valley history. I have much expertise in real estate...please give me a call.                 (Four-O-Eight)  425-1601

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Rainmaker
1,078,450
Laura Allen, Lake Tahoe - Truckee Real Estate for Sale www.TahoeLauraLuxuryHomes.com
Coldwell Banker, Tahoe City, CA (530) 414-1260 - Tahoe City, CA
Tahoe Real Estate Agent Helping Buyers and Sellers

Sam Shueh - All great reasons for sellers to put their homes on the market now, or for buyers to get off the fence and buy at year-end!

Nov 28, 2016 04:26 PM #1
Rainmaker
1,396,655
Yolanda Cordova-Gilbert
Sitterle Homes - Richmond, TX
Sitterle Homes

Sam,

 Usually the builder's discounts but with trid you should have bought in November unless you have a loan to go the sales are over or paying cash otherwise no special EOY sales!

Dec 02, 2016 05:34 PM #2
Rainmaker
3,233,562
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Sam

The end of the year would be a good time to buy or sell real estate in Santa Clara County California.

Good luck and success.

Lou Ludwig

Dec 04, 2016 07:39 PM #3
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