Carrying Costs in Real Estate

So have you heard of Carrying Costs when talking about real estate?  If I were to answer for you, I’d say most haven’t considered all of the aspects of selling a home, including Carrying Costs.  Does it have anything to do with how aggressively you price your home (or not)?

You first have to analyze your own moving scenario:  timing, if a job change is involved, relocation, down-sizing, up-sizing, change of scenery, change of household members and many more that might be specific to you.  Do you have a deadline to meet in order to make your move optimum?  In most cases, the answer is “yes”.  So have you considered the financial aspects of moving, or worse yet, trying to move yet not selling as fast as you’d like?  Here’s a list of those financial aspects commonly called “Carrying Costs”.

  1. Mortgage payment including interest
  2. Taxes on your property
  3. Insurance on your property
  4. Utilities: gas, electric, water, sewer, trash, cable
  5. Yard maintenance
  6. Staging fees of the “For-Sale” property

What if your move is contingent on a new job in a new city?  You could have these costs to consider:

  1. Temporary living expenses (rental) & utilities
  2. Moving costs

What if you’re planning to make a purchase right away, or making that next purchase is the reason for selling?  What are the tangible costs of moving forward prior to selling your home?

  1. Earnest Money & Down Payment
  2. Closing Costs
  3. The new Mortgage including Principle, Interest, Taxes & Insurance
  4. Moving Expenses

So not to mention the significance of additional costs to moving without having your past residence sold, what is the real question here?  How can I avoid months of Carrying Costs when selling my home?  Maybe the answer is back at the beginning…How aggressively should you price your home?  You need to there by when…?

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