How to Buy a Property for LESS Money During the Winter!

The holiday shopping season isn’t just for buying gifts during Black Friday and Boxing Day. Many investors will use this time to actively pick up investment properties – talk about a big ticket item purchase! But will there be a steep discount on real estate like there is on TV’s during these shopping bonanza days? Unfortunately not, but oftentimes, you can find a below-market deal with less pressure from other potential competing buyers.

By the Numbers – As you know, real estate is very seasonal. Just take a look at 2018’s sales numbers below that are broken down by month.

The number of transactions from March until June 2018 is significantly higher. This is what I would call “peak season”, especially for houses.

On the other hand, condo transactions are fairly consistent year-round but the number of transactions in this asset class will also peak in the spring.

Real Estate Deal Days – So how do you find a deal during the winter? The answer is simple. You must be ready to close and ready to act fast.

Spring Market Explained – Many buyers, especially owner-occupied buyers, will look for properties during the spring because the weather is nice and the most number of options available will be during this timeframe as well.

There is reason why there are so many transactions in the springtime. Sellers are more likely to list their properties in the spring, which translates to more options. In addition, those who list in the spring usually have thought about it in advance and will ready their home for sale with repairs, upgrades, photos etc.

More often than not, this type of listing in Toronto will attract owner-occupied buyers who are looking for their “dream home” (i.e., purchase for personal use). As investors, you don’t want to compete with these buyers. These are the buyers who are willing pay over asking price for their dream home, instead of worrying about whether their cash flow numbers will still work with the higher bid price. Simply put, investors cannot win against these owner-occupied buyers.

Taking Advantage of the Winter Woes – However, in the wintertime, it’s a different story. There must be a reason for someone to sell their home during the winter (during a time when people are less likely to want to move). So, sellers during this time are likely more motivated. Additionally, they may not have listed their home in the “nicest” way possible (photos in the winter tend not to look as nice). As a result, there are a lot less buyers.

This means that if there is a good investment opportunity, you can quickly swoop in and put an offer on the property (even an offer with conditions because of the lower number of buyers).

The Winter Checklist – Here are a few things that I would recommend for you to ready yourself with beforehand if you want to increase your chances of getting a great deal on a property:

  1. Know what you are looking for;
  2. Be approved for a mortgage;
  3. Have a lawyer ready; and
  4. Have the down payment funds ready in order to close quickly (if needed)

Seasonal Shifts – I’ve had many clients pick up a property between December and February for less money compared to an equivalent property during any other time of the year. Take a look below at the price fluctuation in the average prices seasonally in 2018.

Would you rather buy a property in January 2018, when prices were $736,783 or in June when prices were $807,871? That’s a $71,088 swing in prices, or almost 10%!

The caveat to this is that there will be less listings to choose from but if the numbers work and if you get it for below market price, that’s an automatic win!

The Wrap – If you’re looking to find a deal within the next two months before the spring market turns the corner in 2019, then reach out to us here at PPTO and we’ll help you find a steal of a deal. But do contact us ASAP before the below-market properties are out of stock, just like that item you’ve had your eye on for Boxing Day! Happy shopping!

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