Selling a house can be a stressful process, and there are many costs associated with it. One of the most important costs to consider is your holding costs. Holding costs are the expenses that you incur while your house is on the market and not generating any income for you. These expenses can quickly add up and eat into your profit if you are not careful. In this article, we will discuss how to calculate your holding costs when selling your house.
Your mortgage payment is likely to be your biggest monthly expense. Even though you are selling your house, you are still responsible for making your mortgage payments until the sale is complete. To calculate your holding costs, you need to determine the amount of your monthly mortgage payment and multiply it by the number of months your house is on the market.
In addition to your mortgage payment, you will also need to continue paying property taxes while your house is on the market. To calculate your property taxes, you can either look at your most recent property tax bill or contact your local tax assessor’s office.
Homeowners insurance is another expense that you will need to continue paying while your house is on the market. To calculate your homeowners insurance costs, you can look at your most recent insurance bill.
Even if you are not living in your house while it is on the market, you will still need to keep the utilities on. This includes electricity, gas, water, and any other utilities that you are responsible for. To calculate your utility costs, you can look at your most recent utility bills.
Maintenance and Repairs
While your house is on the market, you will need to keep it in good condition. This means you will need to perform regular maintenance and repairs. These costs can vary widely depending on the age and condition of your house.
To make your house more appealing to potential buyers, you may need to hire a professional home stager. Home staging can be expensive, and you will need to factor this cost into your holding costs.
Finally, you will need to consider the cost of hiring a realtor to selling your house. Realtor fees can vary, but they are typically around 6% of the sale price of your house. This can be a significant expense, so it is important to factor it into your holding costs.
To calculate your total holding costs, you will need to add up all of these expenses. This will give you a good idea of how much money you will need to spend while your house is on the market. By calculating your holding costs ahead of time, you can better plan for the sale of your house and ensure that you are able to maximize your profits.