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The hot time to look for a new home is in the fall or spring. So why does Barbara Corcoran, founder and chairman of the Corcoran Group, say that the best time to look is in the summer? With fewer people looking, little competition and no bidding wars, summer is the best time to get a deal. She was invited on “Today” to share her secrets.
Why is summer a good time to buy a house?Sellers feel they've missed their chance. Sellers never newly list properties in summer. They always list in the spring, so by July and August, sellers feel they've missed the market, and they are right. That's because few new people come into the market in the summer. People know there isn't a lot of property that comes on in the summer. Buyers want to relax, and they think they won't be able to get their kids in new school districts in time for the fall, so they say "Why don't we wait and start again in the fall?"
But if you are looking at dusty two-month-old listings, isn't it like eating leftovers?
No, because it was overpriced. It's a good house finally coming to the right price. On the Internet you can see when a home was listed. In the summer you know the only reason something is still on the market is that it was overpriced.
When do people normally buy?Spring buyers are more likely to have burned out come summertime. There is always a rush to buy in the spring. People look in the spring so they can get their kids into the fall semester at a new school. They also look in the fall so they will be settled in a new place by the end of the year. People normally either buy it in the spring or stop looking, which is like quitting on the job before you are about to get a raise.
In the summer there is less competition. People are away on vacation and competition is minimized. You don't get a lot of competitive bidding in the summer. There are not enough bodies out there milling around. It's hard to create a lot of tension over a property. Sellers are panicking. This gives you better negotiating power.
Tips for your search
The summer is a better opportunity to get to know the neighborhood.It's a good time to see activity in the area/neighborhood you won't see in the winter. If you go in the dead of winter, you don't get a feel for the neighborhood. In the summer, you'll see more life. You can see who lives next door. And think about it, the number one complaint of people is usually not their home, it's their neighbors. In the summer, you can actually meet your potential neighbors.
Bring the kids along.In the summer, when school is out, you can bring them along and make them part of the process. Brokers hate it but kids love it. Most searching is done during the week, since that's when houses come on the market. You can see how they'll like the area.
Summer is the best time to buy a summer home.
If you go looking for a summer home when it's tenanted, you can generally get a better deal. Normally people look for these homes in early spring so they don't have to wait, but you can do better if you are patient enough to buy a year in advance.
Exception to these rules
Weather-friendly markets aren't as affected by seasons, and up-and-coming retirement communities are an exception. Retiree and resort areas (Florida, Colorado, California) also don't follow traditional seasonal sales.
Is the real estate bubble about to burst?
This is always the fear that gets us. I cried myself to sleep the first time I bought my apartment. I just knew the price would go down. But unlike the stock market, real estate is not an easy in or out and you always have to live somewhere. As I've seen it, the market is slow to unwind, so you have getting out time.
Tips for home spotting:
- Check out older listings, especially those on the market for more than two months.
- Cruise the neighborhood. In the summer you can see the "For sale by owner" signs. A lot of people tack those up in the summer next to the garage sale signs, when they wouldn't do that in the winter.
- The worst house on the best street or in the best town. Cruising the town is the best way to look for a place, and you can really only do it when it's nice out. If you are cruising, you'll see that worst house. I call it dump hunting, and it's a great way to get a deal.