The Best Times to Buy
or Sell a House
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. Prices rose 4.6% in August compared with a
year ago — the largest year-over-year increase in more than six years.
All of this good
news has been widely reported, so many Americans are thinking more about wading
back into the real estate market, both as buyers and as sellers. But how many
people know there are best times to buy and sell houses?
Here are some
timing tips from real estate agents that can save home buyers and sellers a lot
of money:
The best month to
make an offer on a house is January. Fewer buyers are
willing to house-hunt during cold, nasty weather, so there’s less competition
and few, if any, bidding wars. Sellers also tend to be more motivated than they
will 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 day of
the month to make an offer on a house 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 time of
the year to sell a house is the spring. Buyers come out of the woodwork during the spring, and with tax refund checks
in the bank, spring buyers more 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. Tip within a tip: Don’t price your house with a zero at the end.
Studies show that people perceive a precise price, such as $282,284, as lower
than rounded ones, such as $280,000, even when the rounded prices are actually
lower. Real-life sales show that one zero at the end of an asking price lowers
the final sale price by .72% and two zeros lower it by .73%. That may not sound
like much, but it can add up to thousands of dollars.
The best day of
the week to list your house for sale is Thursday. This is more true during a sellers market, but if you list your house for
sale on a Thursday, 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 the next Saturday, it will still show only nine days on market,
benefiting from the psychological advantage of a single-digit number.
The best time to
stop renting and buy a house is when it costs less to buy than to rent. Makes sense, but how do you figure that out? 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. (The rent ratio neared 35 in San Francisco
and San Jose in 2006.) 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.
No comments:
Post a Comment