Selling a home is a significant financial decision that requires careful planning and consideration. One aspect that homeowners often overlook when calculating the overall expenses of selling a property is the holding costs. Holding costs refer to the expenses incurred while you are waiting for your home to sell. It’s crucial to understand and factor in these costs to ensure you have a realistic estimate of your financial obligations throughout the selling process. In this article, we will guide you through the process of calculating holding costs to help you make informed decisions and maximize your profit.
It’s helpful to get a handle on the numbers by taking a realistic inventory of all the recurring expenses to hold your property while it’s on the market. Holding costs, such as your mortgage, taxes, insurance, maintenance, or the costs to relocate before the sale of a primary residence, can add up quickly when you watch the clock and wait for your house to sell. For example, if your costs to hold the property add up to $2,500 a month, and it takes three months to sell, your holding costs for the sale of your house were $7,500.
Depending on the condition of your property, especially those with older homes need to consider the probability of covering unexpected repairs. By understanding your holding costs, you can genuinely understand what you’re profiting from on your sale; read on as we explore how to calculate your holding costs when selling your house in Georgia.
Mortgage, Taxes, and Insurance
One of the most significant components of holding costs is the ongoing mortgage payments. As a homeowner, you will likely have monthly mortgage payments until your home sells. Calculate the total amount you pay each month, including both principal and interest. Multiply this by the expected time it may take to sell your home to determine the approximate mortgage expense during that period.
Property taxes are another substantial expense to consider. Contact your local tax assessor’s office to determine the annual property tax amount. Divide this by 12 to calculate the monthly property tax expense. Multiply it by the estimated time your home may be on the market to obtain an estimate of the property tax holding cost.
While your home is on the market, you will need to maintain adequate insurance coverage. Contact your insurance provider to inquire about the cost of maintaining homeowner’s insurance during the selling period. Multiply this monthly cost by the expected time on the market to obtain the insurance holding cost.
While there’s no guaranteed closing date when you list a property for sale on the Georgia real estate market, an agent can provide you with the average days on the market for similar properties. You can start by adding up one of the most significant drains on your profits, typically your monthly payments for your mortgages, taxes, and insurance as a part of your holding costs when selling your house in Georgia, and multiply by the estimated time until closing. Professional investors like those at Cox Property Group want to help you sell for the highest possible profit. The local professional investors at Cox Property Group operate with total transparency. The professional investors at Cox Property Group will provide a detailed comparison of what you could profit by listing vs. a direct sale so you can make the best decision for your situation.
Don’t forget to factor in the cost of utilities such as electricity, gas, water, and sewage. Even if the house is unoccupied, you may need to keep certain utilities running to maintain the property’s condition. Estimate the average monthly cost of utilities and multiply it by the expected duration of holding to calculate the utility holding cost.
Agents highly recommend leaving the utilities on during the listing. It’s standard practice to leave them on for a few days after closing so that final inspections and walkthroughs can be thorough, so you must also add this amount to accurately calculate your holding costs when selling your house in Georgia. Professional investors like those at Cox Property Group save sellers from carrying this extra load. The professional investors at Cox Property Group save sellers even more because they never charge commissions.
When you’re property is for sale, it’s essential to keep the curb appeal at its peak, which requires sellers to keep up with maintenance work and expenses like lawn care, adding another cost to the calculations for your holding costs when selling your house in Georgia. By buying your house directly, professional investors like those at Cox Property Group can help you eliminate your maintenance costs and all of the work and worry. In addition, the professional investors at Cox Property Group save sellers even more by working with a full-service in-house team of industry specialists, including every pro necessary to get you to the closing table without paying any closing costs or hidden fees.
Suppose you need to travel to care for a property. You may pay airfare, lodging or other transportation costs or a management fee for someone to care for the property if you cannot travel. In that case, this is another cost you’ll need to calculate for an accurate picture of your holding costs when selling your house in Georgia. Professional investors like those at Cox Property Group offer a guaranteed closing date, often in as little as a few days. The professional investors at Cox Property Group have the flexibility to allow you to select the calendar date for your closing if you’re not in a big hurry.
Unexpected repair costs are always possible and should be another factor in calculating your holding costs when selling your house in Woodstock. While you may have prepped and made necessary repairs to put your house on the market and attain a fair price, a professional inspection can help uncover hidden problems before the sale. Armed with this information, you can decide whether to invest the time and money in repairs or disclose the issues to potential buyers and address any resulting contingencies during negotiations. Typically, buyers have an unrealistic opinion of the expenses and demand completing the repairs or that the seller completes the repairs before closing. Professional investors like those at Cox Property Group buy houses as-is for cash. The professional investors at Cox Property Group will take on the risks of making any repairs.
The professional investors at Cox Property Group can help you calculate your holding costs when selling your house in Woodstock without obligation. The professional investors at Cox Property Group and the entire team work to make the process simple and easy for sellers. At Cox Property Group, we want you to feel good about working with us long after closing and agree our offer was fair. Don’t forget to ask about our current investment property inventory at Cox Property Group. Call Cox Property Group at (770) 264-1945.
Homeowner Association (HOA) Fees
If your property is part of a homeowner association, you may have recurring monthly or annual fees. These fees can vary depending on the community and the services provided. Determine the monthly HOA fee and multiply it by the projected time your home will be on the market to calculate the HOA holding cost.
Staging and Marketing
To present your home in the best possible light, you might opt for professional staging or marketing services. These costs can include hiring a stager, professional photographer, and other marketing materials. Research local prices for these services and add them to your holding cost calculations.
Calculating holding costs when selling your home is crucial for gaining a comprehensive understanding of your financial obligations throughout the selling process. By considering mortgage payments, property taxes, insurance, utilities, maintenance, HOA fees, staging, and miscellaneous expenses, you can estimate your total holding costs. This knowledge allows you to make informed decisions, set an appropriate listing price, and potentially negotiate a better deal. Always consult with professionals, such as real estate agents or financial advisors, to ensure accurate calculations and a smooth home-selling experience.