Be sure you know the costs to hold a property when you are thinking about selling your Oklahoma City house. Keeping the property might be costing you more than you think. In our latest post, we take a look at the most common holding costs homeowners face when trying to sell their homes in Oklahoma City.
Holding costs can quickly eat away at the sale price you will eventually receive for the home. As long as your house is on the market, there are a number of costs you will be responsible for. When selling your house to a private buyer who requires financing, the process to sell your Oklahoma City house can take months, resulting in potentially thousands of dollars you will have to spend. However, when you sell your house directly to Local House Buyers , the holding costs can be eliminated on only a matter of days!
The most obvious expense is the monthly mortgage payment. If you own a home you’re not happy with or if you are paying a loan on an underperforming rental, the hefty mortgage payment can be a lot to deal with each month. Your mortgage is undoubtedly at least a few hundred dollars a month. This is money you could be spending on a new property instead of the one that’s no longer working for you.
The risk of losing your house because the mortgage payments can not be met can be frightening. Perhaps you have trouble making ends meet because you, or a family member, have lost a job, or you have other financial problems. Or maybe you’re one of the many people who took out a mortgage that had a fixed rate for the first two or three years and then had an adjustable rate – and you’d like to know what your payments are going to be, and how you can afford them.
You are likely to be responsible for making a monthly mortgage payment if you don’t own the rental property outright. You would be liable for making the payment whether a resident stays in the property or not. Also, the rent which the tenant pays will help cover this charge.
Utilities are the utilities needed to operate your house, including: electricity , water, sewer and heating costs. The cost of utilities, particularly heating costs, can vary widely from home to home and season to season depending on the design of your home and the type of heating system that is installed.
Whether or not you are living in the home while it is up for sale, you will need to make sure the utilities are working for any potential buyer who may want to see the home. They will likely check out the light switches and the water pressure… things that can’t be done if you have turned off your utilities. Plus, you can’t really show a home in the dark! In addition, inspectors will need the utilities on in order to do their job. While your bills might be lowered if you are no longer living in the home, you should still plan on paying a few hundred dollars each month to your bills.
Property tax is one of the biggest real-estate costs. Property taxes are used to fund services like libraries, recreational parks, fire departments, transport, and education.
Property taxes are calculated according to your home’s value. This covers the land as well as the structures on it. The value is calculated using either the value of the property assessed or the mill levy. Once the property’s valuation is completed, the property owner will then receive the assessment, followed by a tax bill.
Depending on where you live, the taxes can add up fast. People living in states like New Jersey or California will see these costs eat away at their profits even faster due to high property taxes which must be paid. You are responsible for the taxes up until the closing date. When working with a traditional buyer, the closing can take months due to the lenders red-tape. When selling directly to Local House Buyers , your financial obligations to the home can end in only a matter of days.
One must also recognize that over time, these costs are also changed in value. Hence these costs also increase at the same rate with inflation. Therefore, the expenses involved must be taken into account when budgeting for owning property.
In some cases, homeowners are required to have insurance. For example, if you have a mortgage, your lender would most likely need homeowner insurance. When funding your mortgage or refinancing, usually the mortgage broker may ask you to provide evidence that your home is adequately insured. This is because if it is damaged or destroyed by a fire or other threats, the lender needs to make sure this his financial investment in your home is secured.
Homeowners insurance is a necessary evil every homeowner is faced with. Depending on your home and policy, your insurance can help to quickly eat away at your profits. As long as you are listed as the owner, you will be responsible for the insurance costs. You should also keep in mind that insurance will be high for landlords as opposed to owner-occupied properties.
If you buy a brand-new build (and even then you will have the maintenance), there are chances that stuff would need to be kept. You may have broken water heater, you may need a fresh coat of paint, you may need a new carpet, you might have leaky taps, your roof can leak. There’s a million things that can go wrong with a property and those of us who’ve been tenants in a property or owned our own home, you know there’s always cost to keep a home running.
If you decide to list your Oklahoma City house, your home will inevitably need maintenance work while it is listed on the MLS. A good rule of thumb is to set aside 1% of the properties value for routine maintenance and minor repairs each year. This way you aren’t blindsided by unexpected costs while trying to sell your home. And remember, the faster you sell your house, the less maintenance you will be responsible for.
In addition to the regular repairs and maintenance you will likely face, there is always a chance a major repair will be needed while you are waiting for a buyer. Maybe the roof starts leaking or the hot water heater blows. Things like this can be costly but should definitely be fixed in order to attract more buyers. You should always have an emergency fund set aside to deal with such expenses so you aren’t stuck with a damaged property while trying to sell it. When you sell directly to Local House Buyers , all expenses are covered. Repairs and all, we buy as-is.
If you own a house within a homeowner’s association or a condominium association, you will be expected to pay a monthly or quarterly fee. This fee also covers expenses for activities that help the entire city, such as trash collection or snow plowing, if the community has contracted with a private company to provide such services. Such fees can increase or the association will need to charge a special fee for projects such as the reconstruction of the parking lot, the installation of a new security system, or the reconstruction of community areas or buildings.
If the property is located in a private community, you’ll be stuck with those homeowners association dues until you are no longer listed as the owner of the house. Depending on your community, HOA fees can be high, and some can change rapidly. Don’t forget to factor these costs in when it’s time to sell. Things like this can often be overlooked when trying to sell the property.
If most people talk about the homeownership expenses, they just talk about the annual mortgage payments on their houses. Yet property taxes and insurance are also to be taken into account, and paid for. Yet cost of maintenance and repair will still eat up its fair share of your (not-so) disposable income.
In reality, accidental repairs — think of replacing or repairing the roof, fixing loose tiles in the bathroom, removing an overgrown or dead tree, or paying for mold control in a humid basement — typically contribute to the highest bills. The list of options is infinite and the smartest thing homeowners can do is set aside emergency savings. Some financial experts recommend budgeting as an annual maintenance and repair fund but the amount you can save depends on the age, condition and size of your house.
As a homeowner in Oklahoma City who wants to sell, it important you keep all of your holding costs in mind. When they are all added up, the amount can be thousands. This can severly alter how much you are making on the sale. When selling your house in Oklahoma City, don’t forget to account for the holding costs. And don’t forget to find out how a direct sale of your property will benefit you!
To help better understand the costs to hold a property in Oklahoma City, get in touch with Local House Buyers today! 405-395-2085
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