What are holding Costs?
Holding costs in real estate refers to the ongoing expenses that property owners or investors incur while holding or owning a property. These costs are typically associated with maintaining and managing the property during the period of ownership.
Introduction
Selling a property in Covington or Newport KY is a significant financial decision. However, many homeowners fail to account for the various holding costs associated with selling a property. Holding costs are the expenses incurred during the time a property is listed for sale, and they can add up quickly if you’re not careful. We also recommend keeping a ledger of all expenses so you can calculate what you actually made. And here is where you need to be honest with the project and with yourself. Tackle this part of the project like a business and learn to be very good at managing your expenses.
Here’s a complete list of holding costs you can expect when you sell your property in Covington and/or Newport KY in 2023:
Mortgage Payments
One of the most significant holding costs for homeowners is their mortgage payment. Even if you’re selling your home, you still need to make mortgage payments until the sale is complete. Depending on how long it takes to sell your property, these payments can add up to a significant amount. How old your mortgage is will also dictate your equity position. Sadly, when you get those calls to refi your home, they don’t tell you that your mortgage resets. What this means is, if you have a 30-year mortgage, those first years barely count towards principle. If you need more information on “mortgage payments”, click HERE.
Property Taxes
Another significant holding cost for homeowners is property taxes. Property taxes are assessed by the local government and are based on the assessed value of your property. If you’re selling your property, you’ll still be responsible for paying property taxes until the sale is complete. You may also be eligible for some tax relief if you are of an advanced age so reach out to your local state and city and ask, you may be surprised at how helpful they are. PROPERTY TAXES can be confusing, that’s why we offer you more information.
Homeowners Insurance
Homeowners insurance is another holding cost that you’ll need to consider when selling your property. You’ll need to keep your homeowner’s insurance policy active until the sale is complete to protect your property in case of any damage or accidents. Great insurance is only important when you need it. Do yourself a favor and ask friends and family who they have, especially if they have made a claim. Great insurance companies actually help their clients. Resist going with a company because you saw their commercial on TV.
Utility Bills
Utility bills are another holding cost that can add up quickly. Even if you’re not living in the property, you’ll still need to keep the utilities on to show the property to potential buyers. These bills can include water, electricity, gas, and internet. And if you need help with your bills, then there may be city and state programs that can help.
Home Maintenance and Repairs
When selling a property, it’s essential to ensure that it’s in good condition. This means that you may need to spend money on home maintenance and repairs to make your property more attractive to potential buyers. These costs can include things like landscaping, painting, and repairs to appliances or HVAC systems. We’ve written an article all about “Repairs To Make Before Selling“, give it a read and it should answer many of your questions. If repairs become too much and you just want to sell your house fast, call us today!
Homeowner Association (HOA) Fees
If your property is part of a homeowner association (HOA), you’ll need to continue paying HOA fees until the sale is complete. HOA fees can include things like landscaping, community amenities, and common area maintenance. Be careful with HOAs and make sure they are run well and have good reserves to cover future maintenance needs. If HOAs seem confusing, we’ve written an article all about HOAs, understand their costs and benefits and it’s right HERE.
Professional Fees
When selling a property, you may need to hire professionals to help with the process. This can include real estate agents, attorneys, appraisers, and home inspectors. These professionals will charge fees for their services, which can add up quickly. Need any recommendations on any of the above services, we can help! And as always, trust your gut and you will be fine! And if you wish to learn more about “Understanding Professional Fees“, this article should be very helpful to you.
Staging and Marketing Costs
To attract potential buyers, you may need to invest in staging and marketing your property. This can include things like professional photography, home staging services, and marketing materials. These costs can add up quickly, especially if you’re working with a real estate agent who charges a marketing fee. We’ve written an entire blog about Staging for you and it should help answer all your questions, it’s available for free right HERE.
Closing Costs
When the sale is complete, you’ll need to pay closing costs. These costs can include things like title insurance, attorney fees, and transfer taxes. Depending on the sale price of your property, these costs can add up to a significant amount. You will get a settlement statement from the closing company disclosing all the fees and make sure you read it and understand. If you don’t, ask questions.
Capital Gains Taxes
Finally, if you sell your property for a profit, you’ll need to pay capital gains taxes. Capital gains taxes are calculated based on the difference between the sale price of your property and its original purchase price. Depending on the length of time you’ve owned the property and your tax bracket, capital gains taxes can add up to a significant amount. This is not tax advice but if you are selling your primary residence, you should be able to avoid most of the taxes from that sale. Call an accountant and they will discuss your options, it will be worth your time.
In conclusion:
Selling a property in Covington or Newport KY comes with several holding costs that you need to consider. By understanding these costs, you can better prepare for the financial impact of selling your property and make informed decisions throughout the process. If you wish to sell fast, then call or text Local Honest Homebuyer.
Local Honest Homebuyer
And here is an offer that is hard to refuse, reach out to us and we’ll help you. We are local real estate buyers and we can answer your questions. Check out our Google reviews, LOCAL HONEST HOMEBUYER GOOGLE