Home shopping in winter can yield the best bargains

Home prices and sales almost always drop this time of year. It's a great time to shop for a house or condo, before other buyers emerge in the spring to reignite the nation's housing market.

Q. We want to buy our first home. Does it make sense to go house-hunting now, or would it be better to wait until the spring?

A. House-hunting during the winter can be a big hassle, especially if you live in an area where the weather is bad this time of year, you're getting ready to go on a winter vacation or you're expecting out-of-town guests yourselves.

If you're willing to tackle such seasonable obstacles, though, you'll likely find some terrific housing bargains today that won't be available a few months from now.

There are several reasons why December, January and even early February often present home-shoppers with the best bargains. For starters, many sellers who put their homes on the market this time of year are particularly anxious to close a deal quickly - perhaps because of a pending foreclosure, divorce, job transfer or simple year-end tax-planning. Those are just a few of the factors that could encourage them to slash their prices or make other money-saving concessions, rather than waiting for the peak home-buying season to begin in the spring.

If you wait until the spring to start your home-buying trek, you'll then be competing against all those other potential purchasers who stayed on the sidelines during the winter. That traditional increase in buyers almost always pushes asking prices higher.

You can find great deals now at several newly built housing tracts, too. That's because many homebuilders this time of year cut prices or offer other valuable incentives in order to clear their slow-moving inventory. Even if you don't get a big discount, you can push for other money-saving items - free upgrades on carpeting and cabinets, help with closing costs or the like - throughout the rest of the winter as builders try to boost their sales and cash flow.

Such "freebies" will become scarcer by March or April.

Q. There has been a rash of home burglaries in our area lately. Police suspect they were made by thieves who go into department stores to spot people making large holiday purchases, follow them home and then return later to steal the presents. Are stolen gifts covered by homeowners' insurance?

A. Yes, although there are limits on how much can be reimbursed.

The typical homeowners' policy, referred to as an "HO-3," provides coverage for gifts or other items lost to theft or fire to between 50 percent and 70 percent of the home's total hazard insurance. So, if an owner has $150,000 in overall hazard coverage, reimbursement for the loss of gifts or other personal possessions would range from $75,000 to as much as $105,000.

Such limits are high enough to replace most homeowners' personal belongings, even after a total loss. But extra insurance coverage should be purchased for extremely valuable items, such as expensive jewelry or fancy furs. Contact your insurance representative for more details.

Q. My wife and I moved halfway across the country last month so she could take a new teaching job at a big university. Can we deduct our moving-related expenses, even if we don't plan to itemize our upcoming federal tax return?

A. Yes, your moving expenses can be written off even if you simply claim the so-called standard deduction. But you'll have to file the long-form 1040 - the shorter 1040-EZ won't do - and also must attach Internal Revenue Service Form 3903, Moving Expenses.

Your letter says you moved "halfway across the country" for your wife's new job, so you and your spouse obviously meet the IRS' bizarre requirement that moving expenses can be claimed only if the new job is at least 50 miles from the old home you lived in during her previous job.

There are two more things to consider. First, the deductions you take for moving expenses must be "reasonable;" you can't take a weeklong side trip to Disney World on the way to the new workplace or eat Beluga caviar each night while traveling, and then expect Uncle Sam to subsidize part of those bills through write-offs.

Second, if you choose to itemize rather than taking the standard deduction, you may be able to further boost your tax savings because you might be eligible to write-off several job-hunting expenses. They include the cost of preparing and mailing resumes, professional employment-counseling services and even the cost of traveling to and from job interviews.

The IRS rules for deducting moving costs are tricky. Order a free copy of IRS Publication No. 521, also titled Moving Expenses, by calling the agency at (800) 829-3676 or by downloading it from www.irs.gov. Also consult an accountant or similar tax professional.

Real estate trivia: An adage in the real estate business is that sales and prices always drop from "turkey to turkey" - the day you take the bird out of the oven on Thanksgiving Day to the "turkey" of a game that's typically served up on Super Bowl Sunday. Seattle pounded Denver in the most recent championship game, 43-8.

• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405.

© 2014, Cowles Syndicate Inc.