Wikipedia:Reference desk/Archives/Miscellaneous/2015 December 20
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December 20
[edit]Selling a house
[edit]I have heard some opinions along the line of "don't put a house up for sale in December if you can wait. They get better prices in March." This makes me wonder why someone doesn't just make a living buying houses in December and selling them in March. Is this just a myth? Are there actual studies that support the March claim?
Related question: If I give a renter notice that the house is selling (120 days notice in California) would there be any advantage to showing it occupied vs. empty? Do buyers care about that? Is it better to paint it inside and out before showing it, or better to have a somewhat lower price?
I have been doing some web searching on these questions, and opinions are all over the place. --Guy Macon (talk) 23:02, 20 December 2015 (UTC)
- Why do you think our opinions would be any more authoritative? Surely there can be no one definitive right answer to this. -- Jack of Oz [pleasantries] 05:13, 21 December 2015 (UTC)
- It takes a ton of money to buy and sell a house. If the holiday season slump is real but less than the overhead of buying and selling then the difference in price might never disappear. Sagittarian Milky Way (talk) 05:25, 21 December 2015 (UTC)
- Agreed. There's also the risk that the market will take a down-turn while you wait, and unoccupied homes are often broken into, vandalized, and/or have squatters take over, so you need to buy insurance to cover these risks. Then there's the opportunity cost of what else you could have invested in if your money wasn't tied up in the house. You also are legally required to maintain the home while you own it, such as shoveling snow.
- So why is it in the original homeowners interest to wait ? Unlike an investor, they are living there, so are getting a substantial benefit while waiting. They also don't incur any additional transaction costs by waiting. Indeed, their costs might be lower, if it's not on the market as long, when listed in the spring. StuRat (talk) 07:36, 21 December 2015 (UTC)
- This graph of Canadian house prices does seem to show a bit of a slow down at the end of each year, but the change is tiny compared to larger market trends (buy in December 2006 and you get a better price in March 2007, yes, but buy in March 2007 and you'll get a better price in December 2007). The housing market is volatile and bubbles have become increasing the norm in industrialized countries (land prices grow much faster than savings at average interest rates), and flipping a house quickly offers a poorer return-on-investment than holding it. Smurrayinchester 09:38, 21 December 2015 (UTC)
- When showing the house it is good to have some furniture, and some simple decoration such as pictures and flowers. But clutter and untidiness will detract. Also it is inconvenient for tenants to allow for viewing or exhibition. Also many buyers would prefer to buy a place with no tenant, otherwise they may have to ask the tenant to leave. But an investor would prefer an existing tenant. Graeme Bartlett (talk) 10:40, 21 December 2015 (UTC)
- If a regular person tries to do this in the USA, they end up paying 3% to the buying realtor and 3% to the selling realtor - a few thousand in title fees, inspection fees, appraisal fees - a few thousand more in finance fees. You'd also be paying interest on the loan for a couple of months. The result is that you lose maybe 10% of the property price in these kinds of fees - which is about what the difference is between pre-Xmas and post-Xmas pricing. So, as an individual, you can't earn money doing this.
- We just sold our house and are in the process of buying a new one - and the lowered selling price on our home pretty much balanced out the lowered buying price on the one we bought...but since we're moving up-market, that's actually a net win for us. Counteracting that is that there are far fewer houses on the market at this time of year - so finding a house we wanted to buy was harder (however, we got lucky and found our "dream house").
- However, if you can act as your own realtor - and had cash to do the transactions without borrowing money to do it - and the nerve to buy without having the house appraised or inspected - you could possibly make money at it. But it's always risky. If you buy a lemon - you could wind up being seriously out of pocket.
- The big money is in buying run-down, foreclosed properties and 'flipping' them. Those are cheap all year round because the general public don't like to buy severely trashed houses and can't participate in the door-step auctions because they don't have cash. These kinds of houses generally need money to be spent on them to fix them up - but it's possible to sell them for considerably more than the purchase price and thereby make significant profits doing that. But it's work - you have to do the paperwork, you need to oversee construction workers - you have to market the property yourself. It's also risky. Even the best people at this particular game lose occasionally - and you have to have enough money to take an occasional loss and not be knocked out of the game and be prepared to win "on the average". If you don't have millions of cash dollars - you can't do this.