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By Tara-Nicholle Nelson | Broker in San Francisco, CA

5 Ways Real Estate is on Sale This Black Friday

I am a very reluctant shopper on my excitement days, so Black Friday usually sends me running in the opposite direction of the big stores and their big sales. But, like everyone else - I love a great deal. So much so that last year's advertised Black Friday laptop deals had yours truly at the biggest big box store at 6 am with the rest of town. (To my credit, I turned right back around and marched right out the door - sans the 3 laptops I was planning to buy - after a woman passed out at my feet (in excitement) and the human chain of security guards posted around the iPhone display had to break formation to come to her aid.  No joke.)

Point is, steep holiday discounts can be good enough to activate the hesitant. (Not good enough to pass out over, though - ever.)  And when it comes to real estate, everything seems to be on sale this holiday season. Getting a good discount on your largest purchase is the financial equivalent of fire sale pricing on a million everyday purchases.  If you're the type who salivates over a 30 percent department store sale or the $4 in bonus bucks you get at the drugstore, these 4 Ways Real Estate is on Sale This Black Friday might literally put you over the moon!

1)  Homes.  Word on the street is that home prices have now rolled back to 2003 levels.  That's right - if you're one of those folks who always thought you were born too late to get a great price on your home, 40 (or however old you are) is the new 32 (or however old you are minus about 7 years).  Of course, remember, real estate is hyperlocal.  That just means that it varies from market to market.  It's a strong buyer's market everywhere, relative to five years ago, but what that means for your situation will vary from market to market.  In San Francisco, that means prices only rose about 11 percent last year, not 30 percent, and buyers may only have to compete with 5 other offers, rather than 25.  In cities that have been foreclosure hot spots, on the other hand, prices may have dropped by as much as 50 or even 60 percent since their peak, circa 2006.  Everywhere, though, homes are on sale relative to what they were a few years ago. 

Since most of your fellow Americans will spend their Black Friday shopping for iPhones and Pillow Pets, they won't be shopping for homes. The low numbers of active, qualified buyers hunting for homes during the holiday season may make some sellers even more motivated to negotiate a good deal with you!  The latest Trulia price reduction report showed that a record-high 27 percent of homes listed for sale on Trulia as of November 1st had had at least one price cut - in some cities, 33 percent, 39 percent - even 46 percent of the homes for sale had already been discounted by their sellers.  Sellers who are serious about getting their homes sold are putting them on sale this season. 

Note to buyers - some homes' list prices already reflect a great discount.  To know whether you're getting a good deal, check your negotiated sale price against the fair market value of the home (i.e., the recent sales prices of similar, nearby homes - ask your broker or agent to help you figure this out).  It is not always the case that you must have a huge discount off the list price for a home to represent a good deal!  For 4 Ways to tell if You're Getting a Good Deal - on Your Home!, click here.

2)  Property Taxes.  Many a buyer isn't aware, but in most places and most cases, property taxes are determined by the price you pay for your home! So, if you get your home for a "sale" price, you'll automatically be getting a sale on your property taxes as well!

3)  Interest Rates.  So, last week, rates went up.  We can no longer say they are at historic lows.  But seriously, people - they are still sub 4.5 percent on a 30-year fixed; even lower on 15-year loans. Rates may not be the lowest we've ever seen them, but they are still very, very low. Chances that they'll stay that way through the holidays?  Strong. 

As we've already discussed, the holiday decline in numbers of buyers may motivate some sellers to cut good deals. What's more, sellers who have their homes on the market during the holidays tend to be the most motivated sellers anyway - less motivated sellers would rather not have buyers tracking rain and mud into their homes while they host holiday dinners and guests, or are trying to relax during their time off work. The best way to make your own sale on interest rates is to ask a motivated seller to "pay a point" for you. Some sellers might be willing to credit you the cash at closing to buy your interest rate down. Your mortgage professional can brief you on how much your rate (and, correspondingly, your monthly payment) will decrease for every "point" (1% of your loan amount) you pay; then, when you make an offer, include the amount you need to buy your interest rate down in your offer.  Most brokers and agents would do this by requesting a closing cost credit that covers/includes the cost of the interest rate buydown. 

4)  Closing Cost Credits.  More than most holiday buys, real estate costs quite a bit of money to purchase.  There are loan origination fees, title insurance costs, escrow fees and even transfer taxes charged just for the privilege of buying a home. You know those Black Friday retailers who offer to pay the sales tax for you?  Well, some home sellers take a similar tack, offering to cover some or all of the transaction costs their home's buyer will incur. Lenders vary, but most will limit the closing cost credit from sellers to 3 percent of the home's sale price; check with your agent and your mortgage broker about lender guidelines before you write your offer, if you plan to ask "your" home's seller to cover some of your closing costs.  

5) "Included" Items. Some of the best Black Friday sale can include a bonus item the retailer throws in!  Same goes for real estate; some sellers don't have much room to go down on the price, but may be able to include some personal property in the sale. Many buyers relish the thought of moving in to a home complete with new appliances, wall-mounted flat-screen televisions, furniture that suits the space exceptionally well.  Some sellers get even more outrageous with this; I recently read a report of a Connecticut seller who threw in - get this - another whole property (their Florida vacay condo), with their home, just to get it sold.  Check with your broker or agent and your mortgage pro to make sure any included items won't run afoul of appraisal or lender guidelines.


With all that said, neither the promise of a great deal, nor the fear of losing out on one! - should be the primary motivator for you making the massive life and financial commitment to buying a home. When I got up at 0-dark-thirty for laptops on Black Friday 2009, I was motivated to buy then and there by the pricing, but I had already planned on making those purchases sometime and somewhere over that holiday season. Similarly, buyers should move forward with the project of buying a home when - and only when - it makes sense for their lives, their vision of their future, their families, their jobs and their finances.

But if you've already decided you're ready to buy and have just been waiting for the bottom of the market, the weather to warm up or the mood to strike - these Black Friday (and Saturday, and Sunday) deals on real estate can be a good reason to activate yourself and put your home buying plans in play.


P.S. - You should follow Trulia and Tara on Facebook, too!

Comments

By Carolyn Edwards,  Thu Nov 18 2010, 05:53
Taken notes from your article,beginin the prccess , my husband is in North Carolina as I write,property looks right for us Thank you
By Reginold Jones,  Thu Nov 18 2010, 06:15
You are right Carolyn, as a real estate broker, I am sharing this article with friend on Facebook. I have always found great deals this time of year because everyone is focused on something else. Buy a home by the end of the year and have the possibility of a nice tax deduction come next year!!! (consult your accountant of course!!!)
By Karen & David Lee,  Thu Nov 18 2010, 06:24
That's right...great time to buy! We've got a special deal for you...our personal lake home in Eatonton, Georgia on Lake Sinclair is up for sale and we are running a SPECIAL thru the end of the year! 3bd/2bth A-frame home on 2 acre lot with approx. 108 ft of water frontage with dock now priced at $214,500...close by the end of the year at get a $1000.00 Visa Gift card for your Buyer or the Agent that sells it!!!! Contact me for more information at theleeteam@prudentialgeorgia.com.
By George Devendorf,  Thu Nov 18 2010, 07:09
Good Morning, Tara!
Just a note to thank you for the article. My wife and I are thinking that the time to move to FLA is due. Especially since we have not had the real estate bubble the rest of the country has had. Our prices never escalated with the rest of the country. Hence we can sell our house and look to buy in FLA where prices have dropped according to those I've watched on Trulia for the last 3 or 4 months, by the 50% you refer to here and lessen the sticker shock.
But mainly I wanted to simply thank you for putting forth an article that seems VERY realistic. I know from my former business, that it has seasons and can't imagine RE doesn't as well. You answered that question that has been nagging at me for a while now. And it is written based on what seems to be reality and professional experience, while not hyping it so as to be obviously not the effort to spur sales, which it could. Enjoy the style.
Anyway, you have a new subscriber and i look forward to reading your future thoughts as well. You show a wonderfully refreshing sense of awareness to your market from the buyers viewpoint. And if you don't have buyers, you won't have sales.
Where might I find your past articles? Guess I will have to look around the site a little to see if I can find them.

AH, seek and yee shall find. I see your articles listed directly to the right of my comment
. You know where I am headed after this!
Thank you!
George & Melody Devendorf
By Missy Iemmello,  Thu Nov 18 2010, 07:21
This article makes great points.For Buyers, there truly is no better time to buy. I have an Affordability Calculator on my website, http://www.MissyISellsHomes.com, that shows you the difference in your monthly payment if the market should drop and interest rates rise or vice versa, and the savings over the term of the loan. NOW is the time to buy! I always tell my sellers at this time of year not to wait until the "Spring Market", the inventory is down now and the buyers that are out at this time are serious.
By Cindy Weathers,  Thu Nov 18 2010, 07:45
Great tips......as consumers we should benefit in all aspects this Black Friday. As a real estate professional, I will be sure to relay your great advice to my customers and clients. It is time to buy and time to sell!!
By Mike Carnes,  Thu Nov 18 2010, 08:14
These are great tips that I plan to share with any potential buyers I am working with. After reading this article, how could anyone who is possibly interested in buying a home not want to pull the trigger on their next purchase. I will be keeping this advice at the forefront of my thought process for the next offer I make on my clients behalf. Another fun tip for all those I-phone users, there is a free ap. called the calcmoolator that covers everything from debt consolidation strategies to loan payment calculations. I think is a very handy ap to have open when you-re out looking at properties to help determine what you can and can't afford.
By Jannett Graham,  Thu Nov 18 2010, 08:31
I HATE the term Black Friday, however, I feel myself being dragged into the spirit of the thing as I process all the benefits of finding new ways to make my listings and referrals more appealing to those seeking discounts on everyday things and WOW! Now , real estate as well. I love the idea Tara and thank you for writing about it. I am sharing it with my facebook pals.
By Steve Guy,  Thu Nov 18 2010, 08:39
Tara, thank you for taking the time to write this very informative article. I am a new investor an you covered several points I havent heard before, and I will definitely consider them in the future. I look forward to reading your future articles. Have a good Thanksgiving and I hope you found your computers.
By Susan,  Thu Nov 18 2010, 08:46
I have a beautiful 2 story home for sale in Huntley, IL. It sits on 5 acres but only 2acres cleared! Excellent
subdivision called Prarie Oaks. My realators contract is up and I'm going to sell it myself!! $300,000 for
Black Friday. Anyone interested call 847-254-9804 Susan
By Voices Member,  Thu Nov 18 2010, 09:15
I have decided to reduce my property at Mystic Shores located at North Lake Canyon north of San Antonio, Texas. I want to be in the position to buy a home next year and selling the property will make that dream come true.
It is just over 1 acre with beautiful hill views and near the lake with a lake view if you build high enough or from your second story. I am offering a holiday special of $59, 900. The property has utilities ran to the road. Call me
at 731.394.2220. I am also a Realtor in Jackson TN if you need any help in TN. Thanks, Pamela. Pamelacleere.com.
By Psnipes,  Thu Nov 18 2010, 09:46
I'm having a Black Friday sale too!!! Home levels are super low, 2003 levels low, and interest rates are slashed too! There is no better time to buy than now! If you want a home at an affordable rate and monthly payment, now is the time to do it. NO MORE RENT!

any one got any advice on how I can use my blog to make real estate sales?

Thanks

Phil
http://www.MyLifeReal.com
By Pat Baker,  Thu Nov 18 2010, 11:11
Great blog and really true too! Best time for buyers ever!
By Ruthmarie Hicks,  Thu Nov 18 2010, 12:13
Tara - Thank you for that. I no longer blog on Trulia because I feel as though I'm feeding the enemy and I rarely log on for that reason - but the title was too tempting. I do not understand WHAT people are waiting for with respect to buying. I'm in NY - so I think it might be due to disappointment that the market didn't tank even MORE! A lot of hype makes buyers think they should have the moon for a song. But it isn't getting much better and overall affordability is back to what it was in the 90s with these low rates.
By Lisa Pyle,  Thu Nov 18 2010, 14:06
we have been trying to sell our 3/2 home in davenport florida for 5 months had a few showings but never one from the listing agent all from people that saw the mls listing only asking 99,500 for 6 year old home in excellent condition. I think it might be time for a new agent but dont know if any are any better.
By Faith Greenwell,  Thu Nov 18 2010, 14:09
Great article Tara! Thanks!
By Linda,  Thu Nov 18 2010, 16:55
To Missy: I clicked on your link and the website could not be found.
By S Flores,  Fri Nov 19 2010, 20:57
This is the best time to buy in many years. It's also a scary time to buy. Shadow inventory is very real and could cause a 20%+ drop in home prices. For the average American that moves every 5 years, it does not make sense to buy now. It's like taking a gamble.
By Divya Lodaya,  Sat Nov 20 2010, 03:31
Great Tip. I strongly agree. I always tell my clients at this time of year is the best time for shopping even for real estate.
By Larry Cline,  Sat Nov 20 2010, 17:16
I have a 2700 sq. ft home built in 2005, on 133 acres. Attached 30 X 40 attached garage, 3 bed. 2 bath, central heat and air with wood burner. 64X40 barn on concrete with a 16 ft lean to. It has electric and water to the barn with nice 4 stall pipe stalls for horses. Spring fed pond. All fenced. Excellent for hunting. White tail capital of Kansas. Must see to appriciate. Asking $300,000.00 If interested please call Larry at 620-642-7973.
By Ppc,  Sun Nov 21 2010, 14:36
I always thought riverfront in Florida would never be a risky investment. I fell in love with my two story log home when I first saw it 13 years ago. We now have had it for sale for two years. Due to the foreclosures and falling real estate market it looks like we'll have it until that right buyer comes along. Just for the right buyer who is a fisherman, horticulturist or wants to retire to Florida we have the home. Http.home.rr.com/hontoon is my site.
By Carrie Dove,  Mon Nov 22 2010, 11:19
Interesting article. Many interesting comments. I'd like to say that everyone should do their research before buying or selling. Buyers- negotiate but be realistic. Sellers - price right or it won't be worth your while. Agents - know your numbers. The market is unpredictable. Everyone involved in a transaction should we as educated as possible.
Carrie Dove
919-637-3883
Cary, NC
By Bryan Houbeck,  Mon Nov 22 2010, 13:24
I am not very optimistic....My custom built home in El Paso, TX started to rebound over the last 90-days, after a slow 24 month drop in value of 20%. However, the number of foreclosures in the area, coupled with vacant new homes from builderts desparate for cash has caused the prices to slump again. How can you ever know the bottom in a crazy and unpredicable market like this? And loans are not flowing anywhere like the used to...No wonder buyers are sheepish and waiting. Also, don't forget...Isn't the next wave of bad loans and foreclosures coming as the refi bubble hits???
By Jan Milstead,  Tue Nov 30 2010, 19:30
Here's to Black Friday!
By Timothy M. Garrity,  Wed Dec 1 2010, 20:04
Excellent post as always, Tara.

Thanks for sharing.

TG
By Courtney Cooper,  Fri Dec 3 2010, 18:56
Hey Tara - somehow I missed this post in a timely manner, but glad I caught up with it:)
By Aram Arakelyan,  Mon Aug 1 2011, 08:10
Glendale Ca home price levels are low, interest rates are low too!
Now is the best time to buy!
If you want a home to buy at an affordable price and monthly payment, now is the time to do it.
By Aram Arakelyan,  Mon Aug 1 2011, 08:15
Glendale Ca home price levels are low, interest rates are low too!
Now is the best time to buy!
If you want a home to buy at an affordable price and monthly payment, now is the time to do it.
By Voices Member,  Fri Jun 21 2013, 12:58
Black Friday seems like one of the best days to buy things! I love black Friday!

David | http://www.heinsooinsurance.ca/html/services/
By ricky.martin93,  Sat Jan 25 2014, 04:06
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http://www.reversemortgagelendersdirect.com/reverse-mortgage-calculator/
http://www.reversemortgagelendersdirect.com/how-does-a-reverse-mortgage-work/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-disadvantages/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-information/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-rates/

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