Calculating Holding Costs Selling Crested Butte Home
Calculating holding costs, sometimes also called carrying costs, is very important. Holding costs are basically what you spend to maintain your property. Depending on your holding costs, selling your 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!
Whether or not you really need to sell, it may be useful to go through the analysis of adding up all the fixed and variable costs associated with owning and operating your second home in the mountains. Using a one-year time horizon is a good rule of thumb. As a result of adding up all of your expenses for the past twelve to twenty-four months you can now project your expenses for the next twelve months.
Calculating Holding Costs
Here is a list of all possible expenses to begin calculating holding costs. 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.
Additionally, there’s hot tub service or homeowner association dues. Similarly, you may have snow removal costs like plowing the driveway, shoveling the deck, walkways, and shoveling the roof one to three times per year depending on the roof pitch and amount of snowfall.
Variable expenses can include property management fees, appliance repair or replacement, hot tub repair, landscaping, window washing, maid service, etc.
After calculating holding costs for a year, you will see what your opportunity cost of holding your home is. Your opportunity cost is what else you could be doing with this money, if it wasn’t being spent on these expenses. Most people have some idea for what they want to do with the money from the sale of their home. But now you can also think about what other things you could do with the money now going to monthly expenses.
Considering Holding Costs When Negotiating
Once you have decided to sell your Crested Butte home you will start getting offers. You will have to evaluate these against the possibility of delaying a sale and continuing to incur these holding costs. Sometimes in a final negotiation when I have represented sellers and there is yet another counter from the buyer, the seller can get frustrated. It is not uncommon for a seller to want to throw in the towel, and say, “The heck with this buyer.”
I normally suggest my client sleep on it. It can be helpful to put the small gap in the counters into perspective. And often it represents a very small amount compared with the overall transaction. Usually I have also reminded my client to consider their holding costs and the backdrop of the market conditions. They then usually thank me for giving them clarity, and the deal gets done. Most importantly, they can then move on with their life.
Calculating Holding Costs Selling Crested Butte Home Final Thoughts
I hope you see the level of detail and time and effort I put into this candid article Calculating Holding Costs Selling Crested Butte Home. I have become a Top Real Estate Agent in Crested Butte by providing my clients with information and insight. This helps my clients to make informed decisions. Some decisions are not always easy.
This article is an example of what you can expect from me as your agent.
How can I help you?
I have over 30 years of sales and marketing experience and am a top real estate agent in the mountain town of Crested Butte, Colorado representing affluent clients who are buying and selling their homes and properties. To see featured properties or search the MLS – visit chriskopf.com.
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Coldwell Banker Bighorn Realty
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