Sellers sometimes forget about the holding costs, also known as carrying costs, which are the costs required to maintain your home. Whether you are ready to sell your home right now or only just starting to consider it, it’s important that you are calculating holding costs when selling your Boulder Home. I recommend looking at the last 24 to 12 months of costs you have incurred on your Boulder home so that you can see what the costs will be in the upcoming months.
Calculating Holding Costs – The How
Here is a list of things that you will want to look at and add up to see what your monthly holding costs are. Fixed expenses typically include mortgage payments, homeowner’s insurance and property taxes. It also includes utilities like electric, gas or propane, water, sewer, trash, security system, phone, Internet, cable or satellite TV.
You might also have homeowner association dues that you pay regularly. Depending on your home and the time of year you might also be spending money on a hot tub service or snow removal. Other variable expenses can include property management fees, appliance repair or replacement, hot tub repair, landscaping, window washing, maid service, etc.
Take some time to sit down and start calculating holding costs when selling for your boulder home. Add up all of these costs and consider that you will continue paying for these things while your home is still on the market.
Calculating Holding Costs – The Why
Most sellers want their home to sell quickly, but they also want their home to sell for the appropriate price. But a lot of the time sellers forget about holding costs when waiting for that perfect buyer’s offer. Depending on your holding costs, selling your Boulder home in two months at a lower price vs. a year later at a higher price may yield a higher net to you. This is simply because you won’t be having to pay these monthly expenses!
You need to be looking at your holding costs as opportunity costs as well. The majority of sellers already have plans for what they will be doing with the money from the sale of their home. Maybe you want to use it for another home somewhere else, maybe you want to invest or take a trip. But have you added the holding costs you are now spending to that amount? Consider what you could do with the money that is currently going to monthly expenses!
Holding Costs and Negotiations
Like I said, sellers want their home to sell for the price they believe their home is worth. And I have seen sellers get frustrated when buyers keep countering or offering below the asking price. You might get annoyed and continue turning away those sellers because you believe you will receive a higher offer if you just wait. But you might actually be losing money in holding costs the longer you wait! Remember to take your holding costs into consideration when you’re in the middle of negotiations. I usually ask sellers to sleep on it and think about the offer before making any major decisions. Your real estate agent should help you through this process and can recommend the best course of action for you.
How Can I Help You?
I hope you found this article informative and helpful. I want to provide my clients with interesting and up-to-date information so they can make informed decisions. If you are planning on buying or selling a home in the near future and you think that my expertise and positive attitude might be of service to you don’t hesitate to reach out and contact me!
Luxury Home Specialist & New Home Specialist
Coldwell Banker Residential Brokerage
(303) 916 5859