When it comes to selling a house, time is money. As a house sits on the market, not only does its value potentially decline, but the costs of keeping up the house mount. This is why we offer accelerated sales to get the house sold quickly for our clients. Every month a house doesn’t sell, owners must pay some key expenses.
This may seem obvious, but it’s worth highlighting here. The estate or the owner is responsible for keeping up payments on the property until it sold. Yes, some of that will eventually come back in equity after the house is sold. But all of the interest and any private mortgage insurance (PMI) premiums are just gone.
Most insurance policies specify that they don’t cover vacant houses, and adding a vacant-house rider can be very expensive—up to 50% or 60% higher than traditional house insurance—because empty properties are easy targets for vandals. Without it, though, you and/or the estate will be paying for any damage.
You can’t just shut off the water and power because you need to keep systems running to keep them working. Plus, real estate agents and potential buyers need to be able view the property. And while some utility costs could go down—no one is doing laundry or dishes—the cost of heating empty properties can actually be higher than in furnished houses because you’re just heating the air. Furniture absorbs the heat and helps maintain the temperature. These costs do add up.
The lawn will need to be mowed regularly, flowers watered and someone will need to come by at least once a week just to clean out any flyers or junk from the mailbox. Inside, all of the systems need to be checked and maintained. In winter months, pipes may need to be winterized, sprinkler systems will certainly need it, and furnaces need to be checked.
A minor issue can turn into a major repair if someone isn’t around to catch it immediately. A pinhole leak in a hot water heater can flood the entire first floor in a single weekend. A frozen water pipe or roof damage from a storm might not be noticed until rot and mold have already set in. Note that vandals, graffiti artists and squatters target empty buildings.
When they are on the market, even empty houses need to be cleaned. Dust is inevitable, and house hunters coming through will track in dirt and leave fingerprints everywhere. One should clean and polish floors and counters. Also, furniture needs to be wiped down at least every other week, more often if there have been a lot of showings.
Most experts agree that staging gets a house sold more quickly and at a higher price than an empty house. The hitch is that to show off the house in the best light, you need modern, attractive furniture in neutral colors. Grandma’s old flower print sofa won’t get that house sold quickly.
You don’t need to fill every space. But renting furniture for a living room, dining room and a bedroom could cost a few hundred dollars a month. You could be better off buying a few used pieces in good condition, but that expense can also add up.
Lastly, whatever is left in the home will probably need to be taken out. That will require either money or time, or both. Make an honest assessment based on real market information if the costs of staging are actually worth it. When we do that calculation with our clients, many opt to focus on emptying and cleaning the house and getting it sold as rapidly as possible.
All of these costs can total thousands of dollars a month, and most of them will have to be paid out of pocket. Get the house cleaned out, prepped, and sold quickly to slash these ongoing expenses, and maximize the value of the estate.