Will Your Home Sell in a Recession: Carrying Costs

by Mary Ann Romans | More from this Blogger

04 Apr 2008 04:15 AM

Even in a bad housing market, a good home will sell and sell well. If you want to evaluate whether or not your home will give you a good return, you can review all of the factors that the real estate experts use when determining the likelihood of a good outcome.

So far, we've covered location, durability, trends and even whether or not your town has sidewalks. All of these aspects of a home can influence its sale. If you missed any of those earlier articles, you can still read them through links at the end of this one.

Now, let us talk about another factor in selling your home that is especially important in a buyers market: carrying costs.

When i hear the term carrying costs, I usually relate it to house flippers who have to hold on to their flips when they don't sell right away, the carrying costs being the mortgage on the home. But potential buyers look at carrying costs in a different way. They want to know the real cost of paying for a home. In a good market, buyers may be looking at the cost for the mortgage and perhaps the taxes, but during a downturn, all of the carrying costs are considered more closely, including insurance, utilities, upgrades, deferred maintenance, the cost of lawn upkeep or landscaping and the cost of snow removal. If your home can keep these carrying costs in check, then your home is more likely to sell.

Compare your home's carrying costs with others in your neighborhood. This may give you a good idea of how your home might sell in a competitive market.

There may be little that you can do about taxes, other than request a re-evaluation from your local government. This new evaluation may backfire and you may be hit with higher taxes, if the property values in your area have gone up since your home's last tax evaluation. Other ideas to help keep carrying costs down for potential buyers is to include a one-year or more contract for lawn maintenance or snow removal with the purchase of your home.

Find out what other households in your area are paying for utilities. Where does your home fall? If your home is efficient and has a low utility cost, speak to your real estate agent about including that information in the literature about your home.

Next, we will talk about analyzing your home's broad appeal, a factor that can make or break your home sale.

Mary Ann Romans writes about everything related to saving money in the Frugal Blog, technology in the Computing Blog, and creating a home in the Home Blog. You can read more of her articles by clicking here.

Related Articles:

Will Your Home Sell in a Recession? Location Matters

Will Your Home Sell in a Recession? Sidewalks and Septic

Will Your Home Sell in a Recession? Durability

Will Your Home Sell in a Recession? Trends Can Influence a Sale

The Basics of Staging

Moving Checklist

The Hidden Expenses of Moving

Do It Yourself: Staging Your Home to Sell

The Neighbors Are Moving: What Would You Do?

Learn more about Mary Ann Romans

Mary Ann Romans is a freelance writer, wife and mother of three children. She lives in Pennsylvania with her husband, the kids and a 16-pound cat.

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