Holidays Good Time for Bargain House Hunting

Once the turkey is set out on the Thanksgiving table, most people set aside thoughts of buying a home until after Christmas or Hanukkah. They’re busy with shopping or family gatherings, and they reckon home sellers can’t be bothered either.

But home shopping during the holiday season could be an outstanding idea, real estate specialists advise. Off-season is a good time to get a bargain. And 1991’s combination of low mortgage rates, the dearth of buyers, the large number of motivated sellers and the huge inventory of unsold properties should make this holiday season a particularly good time for bargain hunting, they say.

“If you have a dime in your pocket, it’s a wonderful time to buy,” said Mary Jo Button, a sales manager with the Prudential Preferred Properties chain.

Mortgage rates are at their lowest levels since the late 1970s, points out Peter G. Miller, the author of the HarperCollins book “Inside the Real Estate Deal.” This year, you don’t have to resort to an adjustable-rate mortgage or some gimmicky financing to get an excellent mortgage rate. One of those wonderfully predictable fixed-rate mortgages can be had in the 8% to 9% range.

“With the low rates, we ought to have armies of buyers out there, but we don’t,” Miller observed.

Lingering problems in the economy--especially fears and realities related to layoffs--have kept many would-be buyers from moving into the market and kept home prices from jumping the way they usually do when rates fall, Miller said.

“What happens is that the general public listen to the media, read the gloom and doom and share the fear, regardless of their personal circumstances,” said Button, the Prudential Preferred Properties sales manager.

This year the number of homes with “For Sale” signs is enormous, said Lois Clinton, a spokeswoman for the National Assn. of Realtors. The supply of resale homes on the U.S. market in September (the last month for which statistics are available) reached 2.5 million units. That’s far in excess of the number on sale during most of the late 1980s, Clinton said.

Keep in mind that even in the best of economic times, most people don’t voluntarily sell their homes during the winter holiday season. It’s not only that they’re preoccupied with holiday rituals. They (like many buyers) are reluctant to move in the winter--especially if their children have to change schools. Most trying to sell homes during the fourth quarter of this year are highly motivated sellers forced to unload because of a job transfer, job loss or some other compelling circumstance.

“They have strong reasons for wanting to move,” said Robert Fisher, president of RE-MAX International, the realty chain. “And generally people who have a reason for wanting to move are more realistic about their property and their price. They’re not just seeing if they can do a get-rich-quick sale.”

The combination of motivated sellers and a shortage of home shoppers adds up to an outstanding buyers’ market late this year, realty specialists say.

Buyers’ market or not, however, no one suggests you purchase a home if your personal finances are shaky. Obviously, if someone in your household has lost his job or fears that could happen, it’s not a good time to buy. It could also be a poor time to buy if you’re convinced that selling a home you already own would come at a great sacrifice.

But if your hesitancy about buying this winter is based solely on some vague feeling that the economy is bad, or the notion that you’re too busy to think about home buying, you may be making a mistake that costs you thousands of dollars.

Of course, neighborhoods differ. You must assess price trends in the community where you intend to live and stay attuned to local economic changes--such as the threatened closing of a nearby company. Regrettably, no one can give you a guarantee about the future directions of home values. You have to reach your own conclusions.

For those interested in running against the pack and buying a home this holiday season, real estate experts offer these pointers:

--Stay flexible in terms of when you seek to see a home.

“A buyer has to understand there are many personal and private agendas that go on during the holiday season. They may not be able to get a showing any time they want,” Fisher said.

If Thanksgiving is just two days off and the seller of the home you’re eyeing has in-laws sleeping on the sofa bed in the living room, you can imagine his reluctance to show the place. Why not wait until the day after Thanksgiving when the relatives have packed up and gone? The seller will undoubtedly remember your patience when it comes time to strike a deal.

--Don’t assume that a seller slow to respond to an offer during a holiday period is not motivated to deal.

Perhaps you’ll make a serious offer on the Saturday before Christmas and then hear nothing for 48 hours. That could mean that the sellers are so absorbed in last-minute preparations for the holiday that they’ve failed to sit down and discuss your proposal.

“It’s not so much that the sellers are not motivated. They may just lack the sophistication to know what’s important,” said Miller, the real estate author.

--Don’t give up your right to a home inspection.

It’s not rational, but some buyers feel so trusting during a holiday season or are so impressed with the way a house looks that they waive their right to a professional home inspection before a contract is finalized.

“It’s a mistake to overlook the home inspection because the house looks so warm, cozy and inviting when it’s all decorated for the season. Yet some people do that,” Button said.