Should You Buy a House in the Winter?

“Wait until the spring!” That’s what many people will tell you should you mention that you’re thinking about buying a new house in the winter. To a certain extent, the advice seems sound. Spring and fall tend to be the busiest months in real estate, where more people are selling, and there seem to be far more options.

However, sometimes going against the crowd can present you with unseen opportunities you wouldn’t otherwise have. There is a case for conducting your home search in the winter, challenges and all. Let’s take a look at some of the reasons why these cold, snowy months might just be the perfect time to find your home.

Buyer’s Markets, Seller’s Markets, and Micro-Markets

No matter when you buy, a successful purchase begins with knowing how the real estate market works. If you’ve ever bought or sold a house, you know the terms “buyer’s market” and “seller’s market.”

A buyer’s market is where people trying to sell a home outnumber those looking to purchase. The buyer has the upper hand and can often ask for reductions in price and other concessions.
A seller’s market is where there are too many buyers for the available listings. When this happens, buyers compete fiercely. Bidding wars and multiple offer scenarios are common.

It isn’t just seasonal. Like any commodity, housing prices are driven primarily by supply and demand. They are also affected by external economic conditions. For example, inflation significantly impacts the market, as do interest rates, as we saw in 2022.

At the beginning of the year, we enjoyed historically low interest rates that triggered one of the busiest seller’s markets we have ever seen. Then we gradually switched more to a buyer’s market as the Bank of Canada began raising the rates.

Buyer’s and seller’s markets are simple concepts. However, here’s something else you should know about. Regardless of what is happening to the big picture, there is always a “market within a market.”

For example, even during the busiest seller’s market, buyers have opportunities within niche neighbourhoods. And since relatively few people search in the winter, that leaves plenty of options for those who are looking.

What is happening in the market today? Signing up for our newsletter is a fantastic way to stay up-to-date.

You’ll Face Less Competition As the Snow Falls

The best time to buy a house is when you don’t need to. When you are not in a rush, you can keep your eye out for an opportunity and wait as long as it takes for the perfect listing to come up. And you may be surprised at how often that happens in the winter because hardly anyone is searching. And yet, there are plenty of listings available!

Visit an open house, and you’ll likely find them much less crowded than during the spring or fall. Sometimes, you may be the only prospective buyer looking at the home. If the right opportunity presents itself, you’re far less likely to encounter competition from other buyers. This means you don’t have to worry about multiple offer scenarios or bidding wars driving the house price above fair market value.

Here are some other benefits of house shopping during the off-season:

Prices are often lower than during the busier times.
Houses take longer to sell, so you don’t have to rush to place your offer.
There will be enough listings to find what you want, but not so many that you feel overwhelmed.
Sellers may be more open to negotiation and conditional offers.
It’s easier to spot flaws like drafty walls and poor insulation.

Perhaps best of all, you don’t have to spend your summer vacation looking at houses. By the warm weather rolls around again, you’ll be all moved in and settled!

Want even more resources to find and purchase your new home? The tools below will help:

Sellers Are Often Highly Motivated

Most homeowners know they will likely command a better price from their sale by selling in the spring or fall. If they choose to list their house in the winter, there’s usually a good reason. When the homeowner is selling due to a job relocation or a change in marital status, the transaction is not optional.

The sellers are more likely to offer concessions to make the transaction happen and usually want to get the process over with quickly. As a buyer, you will still need to make a realistic offer. Even in this market, a homeowner isn’t likely to sell far below the appraised value.

However, the combined effect of reduced competition and higher seller motivation can help make your purchase at the lowest price and best possible terms.

How do you know if your real estate agent can and will work to get the best terms for you? Check out our post “Realtor® Negotiation Red Flags You Don’t Want to Ignore.”

Contractors Are Less Busy

Unless you’re looking at a brand-new build, chances are you will want to make some repairs and updates to your new home. For example, you may want a kitchen makeover, new floors, or a bathroom remodel. At the very least, a fresh coat of paint in your choice of colour can help your new house feel like home faster.

During peak times, contractors can be booked months in advance and finding the right person for the work you need can be difficult. Most contractors are in their slow period in the winter, and they may be willing to go the extra mile or offer a discount as an incentive.

Meticulous Planning Leads to a Successful House Hunt

A well-thought-out plan will always help you get the best results whenever you decide to buy. This is particularly true in the winter when inclement weather can make it challenging to visit houses for in-person viewings. The more laser-focused you become, the less likely you are to have to traipse through dozens of options before finding the right home just for you. Here is a simple roadmap to help build your strategy for a successful purchase.

Retain a Local, Experience Real Estate Agent

Nothing will alleviate your stress and increase your chances of finding a perfect home like working with the right real estate agent. It costs you nothing to have a knowledgeable expert by your side as the seller pays all commissions. A good agent will work day and night to uncover hard-to-find listings. How do you choose the best person to represent you?

Research is the key. There are thousands of agents in the GTA. However, many have only worked in the busy seller’s market of the last few years. Very few have built the network that gives them access to premium listings or the skills to negotiate the best deal.
Read their Google reviews. Unbiased ratings from previous clients will give you an idea of an agent’s track record. If they have provided exceptional service and obtained results for others, they will likely do so for you as well.
Talk to your agent virtually or in person before hiring them. Ask questions, and a lot of them! Their answers will give you an idea about how knowledgeable they are and what kind of service you can expect from them.

What kind of questions should you ask your Realtor®? Find out in our article right here.

Organize Your Finances

Buying a house is a massive financial commitment. Before your search can begin in earnest, you’ll want to analyze your resources and determine a range for your budget. How much you can afford for your new home comes down to the following:

How much financing you qualify for
The amount needed for your down payment
How much you can afford to pay monthly toward your mortgage
How much you have in savings and equity

Let’s start by looking at how much you will need for a down payment when buying a new house.

For homes above the $1 million mark, you’ll have to factor in a 20% down payment. Those funds will have to be readily available, not tucked away in a locked-in investment account. For many first-time buyers, coming up with $200,000 in cash is challenging.
However, if your house is less than $1 million, you need 5% on the first $500,000 and 10% on the rest. For example, imagine the asking price is $800,000. Your down payment works out to $55,000 ($25,000 + $30,000).

With the difference in the down payment calculation, even a minimal price reduction makes a house far more affordable. It’s just one more reason buying in the winter could be the best decision you ever make!

Do you want an estimate of how much your new home will cost each month? Our Real Estate Calculator is a helpful tool.

Getting a Pre-Qualification or Pre-Approval

Pre-qualification and pre-approval are two terms that cause confusion among buyers. How are they different?

A pre-qualification is a good first step for someone who is in the beginning stages of buying but not yet ready to pull the trigger. It’s easy to do, and no credit check is required. Many financial institutions allow you to apply on their website by filling in basic information about your income, debt, and assets.

You’ll get an idea of how much you can borrow, often within minutes after applying. However, a pre-qualification is only a rough estimate and shouldn’t be heavily relied upon to determine your budget.

A pre-approval is far more detailed. You’ll go through the mortgage application process, and the lender will take the time to evaluate your ability to repay. They will perform an extensive background check and look at your credit history. A response can take anywhere from a couple of days to a couple of weeks. The lender will then provide a certificate of pre-approval indicating how much you will be able to borrow.

With a pre-approval, you’re in a powerful position to negotiate with sellers because you can prove that you qualify for sufficient financing.

Making Your Wish List

Now that you’ve done your background research, it’s time to move on to the fun part! You can begin dreaming about your new home and listing what features you want or need. The key is to be as detailed as possible while remaining flexible. Here’s an example of what your checklist might look like:

What neighbourhood do you want to live in?
How many bedrooms do you want?
How many bathrooms?
Is an open-concept layout better for your lifestyle, or do you prefer separate areas?
Do you want a house, condo, townhouse or semi-detached?
What size yard do you want?
Do you prefer an eat-in kitchen or a separate dining room?
What style best suits your needs? A bungalow with everything on one level or a spacious two-storey home?
Are you willing and able to handle repairs yourself, or do you need something move-in ready?
Is a driveway or garage important to you?

If you draw a blank on what features you want, your real estate agent will be happy to step in and help. This new house will be your home for many years, so it’s worth the time and effort to get it right the first time!

When buying a home, the first question is usually, “where?” Some of our community guides might help you choose the perfect location:

Deciding What to Do With Your Existing Home

If you currently own a home, you’ll have a decision to make. Should you sell your existing property first to ensure you have the funds for your purchase? Or are there benefits to securing a new house before letting go of your old one? Depending on the market and your risk tolerance, there is a case to be made for both.

Sell First

After weighing the options, many people decide to sell first. It means you have the cash in hand for your new purchase and know precisely how much you can afford to spend on your new home. It also erases the worry about your house not selling after you’ve committed to a purchase.

However, selling first can put you at a disadvantage in a busy market. You may find yourself under pressure to find a new house quickly when only a few listings are available. If the right home doesn’t come up, you may have to settle for something less than ideal or arrange temporary accommodations.

Buy First

Buying first can be financially rewarding, but there are also risks. If you commit to a purchase, you can be responsible for covering two mortgages if your current home takes longer than anticipated to sell. But in a fast-moving market where houses get scooped up quickly, this risk is minimal.

The advantage is that holding on to your property means you continue building equity. Plus, your house may rise in value by the time you sell. When listings are few and far between, buying first gives you peace of mind knowing you have a place to call home after your transaction closes.

Once you purchase your new home, the next step is to decorate it and make it uniquely yours. The posts below will give you some inspiration:

Should You Keep Your House When You Move?

A few investment-minded homeowners have a third option to explore. What if you didn’t have to sell your existing home at all? Retaining ownership allows you to grow your equity faster as both properties rise in value.

If your home or condo is in a high-demand area, you can rent it out and use the income to cover all or a large part of your carrying costs.

Do you want to know more about the advantages and disadvantages of keeping your existing property? Check out our article, “Should You Sell or Rent Your Condo When You Move?”

Don’t let the frost or snow dissuade you from finding your perfect home in the winter! Whether you’re ready to start your search or just have a few questions, we are here to help. Reach out today at tanya@tcteam.ca or call 647-293-3785.