Aim High Properties, LLC

Aim High Properties: Are your holding costs eating up your future home sale profits?

Are your holding costs too costly?

Home sellers in Cinnaminson who are awaiting a home sale via traditional listing or an FSBO must understand some holding costs that can wreak havoc on their finances. Understanding these costs is important for a home seller to calculate if their holdings costs are depleting their potential profits. Aim High Properties, the cash buyer in Cinnaminson, shares some of these holding costs in this blog.

What are holding costs?

Holding costs are all the recurring expenses associated with owning property that are pending the sales proceeds. These costs exclude expenses related to buying and selling a property, such as lender’s fees and realtor’s commissions.

Home sellers need to be aware of holding costs so they can plan their selling and investment strategies better. Here are 6 holding costs that home sellers cannot avoid when the sale is delayed:

Lower price to match the market

Sale via traditional listings usually takes 90 days to conclude after a buyer makes an offer. But getting a potential buyer often takes a lot of time. When a traditional listing fails to attract a buyer for too long, it can put a home seller in a very uncomfortable spot. Not only will they need to lower their asking price to align with the markets, but they also struggle with other holding costs that pile up due to delayed closing dates. The profits a home seller was hoping to make come down drastically with the price decrease.

Pay for utilities in an empty house

If a house on sale is empty, it still has recurring utility bills irrespective of the use. Home sellers cannot afford to cut off this service completely until their house staging and showings have led to an offer. The absence of heating, gas, and water can put off potential customers during an inspection. Everything must function when a potential buyer arrives. This holding cost cannot be avoided as the cost of losing a potential deal can be monumental in comparison.

Continue paying taxes

House taxes are payable until the property changes hands legally on paper. Until then, the home seller must pay house taxes to stay out of trouble with the government. The question is whether the home seller is able and willing to pay house tax for two properties? A massive property in a prime location entails a massive house tax. Homesellers residing in another property have to include this holding cost when they plan to sell their house via listings. Ignoring this holding cost can upset a home seller's financial planning. Perhaps traditional listings are not the best method of sale for someone who wants to avoid huge house taxes.

Maintain and repair until it is sold

Home sellers who plan to conduct a staging event for their property will need to plan their finances to include not only the cost of a professional staging service. It may include the expense of maintaining light fixtures, the HVAC, and lawns. Unexpected repairs may pop up that cannot be avoided. One staging event may not bring in the right buyers. That means more expense and more waiting time while the maintenance and repair costs keep piling up. Losing track of these costs can skew the home sellers' finances.

Pay the insurance

Home sellers who have moved out of their homes still have to bear the expense of insurance. This is an unavoidable expense in the case of traditional sales. As home sellers wait for their homes to fetch a reasonable sale price, they still have to protect their homes from fire, water, and storms. However, this substantial amount can be very taxing for some home sellers who are struggling with other holding costs and financial duress. Are they sure their wait for a decent offer is worth this holding cost?

Enhance curb appeal

A great price demands a great curb appeal. Home sellers need to invest a significant amount to attract the right buyers, especially when staging. A professional landscaping expert can walk away with a big chunk of a home seller’s money and time. While planning their finances, home sellers must be cautious about overspending. Will this spending be justified by the profit earned on the sale? No one knows.

Holding costs can pile up and disrupt the financial planning of many home sellers. Historically, traditional listings or FSBO take time to attract the right buyer. The change in market prices, the insurance, utility bills, house taxes, and maintenance & repair should be considered carefully before diving into traditional sales. Home sellers who want to avoid these holding costs and move on quickly can contact Aim High Properties for a swift cash offer that matches the market prices, offers quick closing, and demands no repairs.

Why Aim High Properties, LLC?

With its extensive knowledge of the business, the network of resources, and years of expertise, Aim High Properties have been helping homeowners with a variety of real estate problems. Why should home sellers choose Aim High Properties?

A one-on-one relationship with customers to handle their unique situations
Ability to directly purchase homes and make cash offers
Offers an extremely fast, and hassle-free transaction
Purchases property as well as sells homes directly to buyers

Besides these advantages for home sellers, Aim High Properties also offers wholesale property deals and investing opportunities for private money lenders. It also partners with agents to discover the best property deals in the area.