‘Tis the season to buy a home – Add ‘new home’ to your shopping list – By Tracey C. Velt • Bankrate.com

‘Tis the season to buy a home – By Tracey C. Velt • Bankrate.com
While you may think it’s crazy to tackle the huge task of homebuying during the schedule-jammed holiday season, the holidays are actually a great time to find real estate deals in today’s new economy.

“This year in particular may be different than other years,” says Beth Tyler, a broker with Long & Foster Real Estate in Annapolis, Md., who says the economy has boosted many sellers’ motivation to sell.

“Interest rates are at an all-time low, prices are greatly depressed and inventory is plentiful,” says Nick Burrafato, broker/owner of Florida HomeGallery Real Estate in Orlando, Fla.

“The holiday season is a particularly good time for first-time homebuyers to find a home,” says Rich Hayden, senior loan officer for HomeFirst Mortgage Corp. in Alexandria, Va. “But get prequalified with a mortgage broker or lender early. The typical turnaround to close a home is 30 (to) 60 days, so it’s best to get started right away.”

“The housing market appears to have reached a floor through the June to September period,” says Steve Murray, editor of REAL Trends, a real estate industry publication.

“December home sales usually make up about 8.1 percent of total annual home sales,” he says. The peak months are May, June, July and August — each nearly 11 percent of annual home sales. The only months lower than December are November, January and February.

Here are five reasons the 2009 holiday season promises to be filled with better-than-usual home bargains:

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LOW INTEREST RATES

Interest rates and home prices are at all-time lows. “If we look historically at interest rates, cyclically we’ve seen drops every December through January,” “While rates are now at all-time lows, we could dip even lower,”.

“Interest rates have to come up sometime but it won’t be during the holidays.”

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SERIOUS SELLERS

With unemployment rates still high and looming holiday expenses, many home sellers are extremely motivated to sell immediately and are more willing to negotiate a lower home price. “Properties that are on the market over the holiday season usually have very serious sellers,” says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate in Parsippany, N.J.

Lori Bowers, a broker with The Lori Bowers Group Desert Properties in La Quinta, Calif., agrees.

“Many owners are anxious to get the home sold before the end of the year because it helps on their taxes,” she says. Moreover, a serious seller means more negotiating power for the buyer, especially if the home has been on the market for several months.

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SLOWER MARKET

With many people busy gift shopping, traveling and entertaining, November and December are traditionally slow for real estate. On-the-ball buyers can take advantage of that fact and find less competition for the most desirable homes. According to Elio Buoni, a Chicago-based broker with RealEstate.com, fewer buyers and plenty of listings on the market mean bidding wars with other buyers (which can drive up the cost of the home) are less likely to occur.
CLOSE FAST

Fewer transactions mean faster closings. “November and December are historically slower months in the mortgage business, so things get done faster,” says Brad Walbrun, a mortgage consultant for A and N Mortgage Services in Chicago.

Not only that, “Financial institutions and lenders that are looking to close the books on 2009 may be more willing to act quickly to get a transaction closed by year end,” says Chris. That means it may take less time to get an offer accepted on a foreclosure or short sale property, a real boon for buyers who want to
TAX DEDUCTIONS

“Most settlement costs paid to the mortgage company, lender or broker are tax-deductible in the year in which you pay them,” says Walbrun. If you close on or before Dec. 31, you may be able to deduct the interest on your first monthly mortgage payment from your taxable income. And, you may be able to deduct points paid to reduce your interest rate as well, says Buoni.