Real Estate News & Commentary

Holiday Bargain Hunt: How to Score the Best Deal of the Year During Its Last 2 Weeks

Expertise: Landlording & Rental Properties, Real Estate News & Commentary, Personal Finance, Real Estate Investing Basics
119 Articles Written
Home For Sale Real Estate Sign in Front of Beautiful New House in the Snow.

Conventional wisdom is that spring and summer are the high seasons in real estate, when all the action happens.

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This is precisely why the holiday season, during the real estate industry’s slump, is the best time to press the court for acquisition.

Experts on investing of any kind will all agree—buy when others are holding back. The last two weeks of the year, while everyone else sips egg nog and spends too much money on the latest gadget or fashion, is precisely when bargain hunters can score a quick win.

But only if they’re willing to push hard and zig while everyone else is zagging.

Sellers Are Motivated (and Maybe Desperate)

Who sells their home during the holidays? People who need to.

That’s why inventory for sale drops in December by 10% on average according to the NAR’s chief economist Lawrence Yun.

Related: Confessions of a CPA: 3 Year-End Tasks I Wish All of My Clients Would Perform

“But wait a second. Isn’t lower inventory a bad thing for buyers?”

All things being equal, yes—except they’re not equal. Buyer activity drops even more than listings in December.

Seasonality is stronger in real estate than most in the industry know. No, really. Here is the annualized home price growth rate in summer versus winter:

What does that mean? Nearly all home appreciation happens in the warmer months. This makes sense, given that half of all home sales happen in one season: summer (see the Time article above).

What all this means in practical terms for you is that sellers are ripe for lowball offers. But speed will matter—offer to settle before the end of the year, and you’ll find sellers sorely tempted to take you up on your low offer.

You can even sweeten the pot by offering them a choice to settle on December 31st or January 1st (or 2nd, if the 1st will be spent recovering on the couch). Depending on the seller’s tax situation, they may greatly prefer putting the sale on this year’s books or next year’s.

Lenders Are Hungry, Too

It’s not just sellers who are feeling the holiday slump. This is an incredibly slow time of year for lenders, who spend just as much as everyone else during the holidays but earn far less in commissions.

That means they're also more open to negotiation than usual. Loan officers will be willing to work for lower commissions, to score one last paycheck this year.

It's worth mentioning that loan officers' commissions are based on two factors: the lender fees and the interest rate they quote you. Both are negotiable, and lenders will go lower on both when pressed hard and tempted by an extra paycheck (however small) squeezed in before the end of the year.

And because lenders have less work on their desks, they can push your loan through faster than usual.

Even so, most conventional lenders can’t close in two weeks. You may have better luck with hard money lenders.

This isn’t all bad, because they tend to be even more flexible and negotiable in their rates than conventional lenders.

Related: Your Belief That “You Make Your Money When You Buy” Is Holding You Back From the Best Deals

…And Everyone Else Is Just as Hungry

Guess who else is paid on commission? Real estate agents.

Granted, as the buyer, you probably aren't paying real estate agent fees. But sellers lean heavily on their agent's advice, and in real estate's slowest season, listing agents are more likely to say, "This may not be the price you were hoping for, but it's a quick settlement and can get this house off your books by the end of the year."

In other words, even the seller's listing agent will be pulling for your offer to go through.

With real estate agents’ business so slow, they’ll also be more available to give your deal attention and make sure it settles.

This is a trend you’ll see across the board in real estate support personnel in December. Appraisers, home inspectors, and title agencies are all quiet this month, so at every step of the way the process can move faster.

Everyone wants an extra paycheck this year. They’ll do what they can to pave the road for a quick, smooth settlement.

Some of them may even be willing to accept a lower price to make it happen.

property-management-team

Taxes, Too

One last perk to an end-of-year sprint to score a final property purchase? More deductions for this year’s return.

Nearly every line item on a settlement statement can be deducted by real estate investors in today’s tax code. Make one last push to score a final deal, and lower your tax bill in the process.

While your tax bill may not be negotiable, everything else in real estate is. Push sellers hard over the next few days, negotiate aggressively, and when you find a seller who’s willing to take a lowball offer in exchange for settling by year’s end, then turn around and negotiate hard with your lender.

You’ll find the holidays soften up more than people’s midsections, with far easier negotiations across the board. Press hard, and you can secure the best possible property prices, interest rates, and lender fees of the year!

Ever made an end-of-year drive to score a last-minute bargain?

Share your tips and experiences below!

G. Brian Davis is a landlord, personal finance expert, and financial independence/retire early (FIRE) enthusiast whose mission is to help everyday people create enough rental income to cover their ...
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    Curt Smith Rental Property Investor from Clarkston, GA
    Replied about 2 years ago
    Best time of the year to get low offers accepted is between Thanksgiving and end of Jan. Especially if weekend was bad weather. Monday offers are looked upon more favorably. 🙂 Set up your email alerts on both zillow and realtor.com, I just closed on a good REO that was ONLY on realtor.com, not zillow. Boo hoo for the investors hunting only on zillow. Manually check hudhomestore.com every Sun for Monday offers. And then,,,, if the deal shows up on zillow is for an auction.com auction, now is the time to put in your lowish MAO offers, then walk. I’ve bought around 12 deals off auction.com, not my favorite or biggest source of buy and holds, but one that I have some experience with. When your offer does not exceed the reserve the Bank (seller) is allowed to bid against you. Yes this is true, verified many times. NEVER bother with upping your bid, its the seller bidding against you. I calc my max offer and put it in when the auction just opens then I walk away, never to check back. I get called at 5pm EST on the last auction day with someone from CA: “hey you are high bidder, even though you didn’t exceed reserve, the seller probably will take your bid. Do you still want this deal?”. I always say, let me call you back tomorrow… Then I drive to look at the deal. I just closed on 48 Dee Vue Ln Rossville GA, off auction.com, I bid $31,250 (always bid odd numbers just over the 10k price). Closing got delayed and I got a price reduction down to $30k. Check zillow, zestimate is $98k. I own 2 other rentals in this neighborhood so I know the rehab issues and rentability ($1100/mo). I picked $31k because that was half of what its worth and I figured a desperate seller would take 1/2…. 🙂 Make low offers,,,, but offers that make sense! Figure your MAO and figure in the “oops” pad on the rehab. To me my $31k made sense and … I was right. Same neighborhood I negotiated a $51.5k on the idendical house layout a few streets over an REO, bank seller. $69k ask, I held at $50k then came up a bit to pay “the game and show good faith”. Got that one too. Same $98k zestimate but fixed houses selling for $120k. I rent these so I don’t care what ARV is… Summary: know your area well. Know what is a good price (for you) and make those offers now through Jan.
    Angelica Leyva
    Replied 2 months ago
    Curtis id love to learn how to buy from auction.com
    Lola Brown
    Replied 2 months ago
    Great advice!
    Jennifer Appelman from West Bloomfield, Michigan
    Replied about 2 years ago
    Thanks for the great tips Curtis. Happy holidays
    Wenecio Godfrey Flipper/Rehabber from Jacksonville, FL
    Replied about 2 years ago
    Thanks for sharing this knowledge!
    Frank Boet from Miami, Fl
    Replied about 2 years ago
    Curt, that was great information. Thank you!! Merry Christmas.
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    Great tips Curtis, and congratulations on the new acquisition!
    Krista Walker from Cave Creek, Arizona
    Replied about 2 years ago
    If I have cash to close before the end of the year is it difficult to then go out and get a conventional loan later?
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    Nope, not at all. With that said, you’ll probably incur some duplicate settlement costs, like title work. You may be able to negotiate for a discount if you use the same title company and not much time elapses between closings though.
    Bryan Frost Investor from Overland Park, Kansas
    Replied about 2 years ago
    Great Information and Post. Thank you!
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    Thanks Bryan, and happy holidays!
    Bryan Zundel from Chicago, IL
    Replied about 2 years ago
    Great info and very motivating. Thank you.
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    Glad you enjoyed it Bryan! Hope you’re having a great holiday season!
    Ty Little from Spring Lake, North Carolina
    Replied about 2 years ago
    Great article. I tried negotiating a deal earlier in the month and sellers were a bit unrealistic on their price. I was told to try again earlier in the month. I agree everyone is hungry and will be into January. Happy hunting.
    G. Brian Davis from Baltimore, MD
    Replied about 2 years ago
    I’m sorry to hear that deal didn’t go through (yet!), but there are plenty of hungry sellers out there, hope you find a great deal over the next few weeks!
    Dawn Matze Contractor from Carlsbad, CA
    Replied about 2 years ago
    Nice Tips! Thanks for sharing. Wish West coast had those numbers!
    Josh Sellers from North Hills, California
    Replied 2 months ago
    We've purchased three year end properties in the last couple years and all the things you mentioned came into the deal. People selling in the late months seem very eager to move their properties.
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Awesome Josh! Glad to hear you've found great deals during the holidays!
    Lidia Grasso
    Replied 2 months ago
    Thank you so much for sharing
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Thanks Lidia, glad it was useful for you!
    Donald Barre from Adelanto, CA
    Replied 2 months ago
    Awesome info. Thank God for BiggerPockets
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Haha, thanks Donald!
    Elizabeth W Radigan
    Replied 2 months ago
    Great info! Thanks for sharing!
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Thanks Elizabeth, glad it was useful!
    David Pfeffer
    Replied 2 months ago
    I agree with this article 100%! started my hunt for my first rental property in June of last year. I noticed my market in particular was terrible to buy in summer time. Too much competition from to many people looking to buy. Maybe summer made looking too easy maybe in addition to everything else? Upstate Ny winters are especially brutal. Winter was by far the best time to buy.
    G. Brian Davis from Baltimore, MD
    Replied 2 months ago
    Sounds like winter real estate shopping is working out for you David, glad to hear it!
    Kyle Deutschmann Lender from Nashville, TN
    Replied about 2 months ago
    Great article! Ive definitely noticed houses sitting on the market longer and price drops happening more frequently over the last few months of the year so it makes sense that its a great time to buy. Only thing Id point out is that Im a loan officer, and my commission is not based on the interest rate or fees, and its a fantastic refi market right now so we are actually pretty busy despite a decrease in purchases.
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Thanks Kyle! Definitely a slow time of year.
    Daniel Vidrio Rental Property Investor from Benicia
    Replied about 2 months ago
    thanks, great info.
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Thanks Daniel, much appreciated!
    John Murray from Portland, Oregon
    Replied about 2 months ago
    Going to list my latest flip in January. Inventory is down, interests rates are low and buyer competition is high. We will see if my 2500 hours of work in the past year nets me a big score. No taxes because I lived there for 2.5 years before I'm dumping it. Maybe it will be my winter of discontent or my Summer of 42.
    G. Brian Davis from Baltimore, MD
    Replied about 2 months ago
    Great strategy doing a live-in flip John, hope you get the price you're looking for!