The Value You are Losing by Not Selling Your House
Every day that your home continues to sit on the market, unviewed and with no offers in sight, you are losing value when you simply wish to sell your house. How do you put a price on what you are losing? Not only can you miss out from a financial perspective when you don't sell a house in a timely manner, but you can also lose value from a logistic and lifestyle perspective. It is essential for home sellers to do the math to determine whether they should invest in additional resources, such as an online realty service, to increase their odds of finding the right buyer, and ultimately selling their house more quickly and for more money.
The Consequences of Being Unable to Sell Your House
Have you ever wondered what it costs you when you can't sell your house? Depending on the seller's situation and the amount of time the home sits on the market, this can vary, but typically the longer it sits, the more you lose. You must take into account both the financial burden associated with not selling your house, as well as the inconvenience and lifestyle burden.
First, we'll take a look at the value lost from an unsold home from a financial perspective. Paying the mortgage when you cannot sell your house can hurt you financially in a number of ways. It may deter you from being able to afford to purchase a new home. This can be especially inconvenient if you are in the process of moving out of state, which makes selling a house even more difficult. Where do you live in the mean time if you can't afford a house in the new location? If you are forced to rent a place of residence until you can sell the house then you will be throwing more money down the drain.
In the worst case scenario, when you can't sell your house and can no longer afford to pay the mortgage on the unsold home on top of the rent or mortgage you are paying at your new place of residence, the bank will be forced to foreclose. The impact of mortgage foreclosures is widespread and costly not only for homeowners, but for lenders, servicers, insurers, cities, and neighborhoods. Being unable to sell a house has an effect on the whole community. Some effects of foreclosures on homeowners are immediately apparent, while others are just as severe but less well known:
- Loss of a stable, secure place to live.
- Loss of equity in the property (which you would get in cash if you could sell your house).
- A damaged credit rating. Poor credit resulting from foreclosure often becomes a stumbling block to obtaining rental housing or purchasing another home.
- Potentially higher costs to replace lost housing.
- Possible tax consequences. For tax purposes, foreclosure is treated like a sale; any principal balance and accrued interest forgiven are treated as income for the former owner. The amount of gain or loss is determined just as if the property had been sold for cash equal to the face amount of the debt.
When you do find you just can't sell your house, remember that the exact cost of foreclosure varies, depending on factors such as interest rates and their effects on refinancing, the relative strength or weakness of the local real estate market and whether the property is sold quickly or abandoned, boarded, or demolished. The negative ripple effects of foreclosure are vast and the resulting cost is significant enough to make avoiding the threat of not being able to sell your house for an unnecessarily long period of time a top priority.
Desperate times call for desperate actions and many homeowners find themselves in a position where they are forced to continually drop their price as they try to sell the house, to make it more attractive to buyers. If you are unable to sell your house for too long, potential buyers may think something is wrong with the property. When this happens, the seller often has to drop the price below market value to remain competitive with newer listings. Dropping the price as an incentive to sell a house is a quick way to get more buyers interested, but it can make selling a house less lucrative by decreasing the profitability of the sale.
In addition to the financial losses of not selling your home, there are many inconveniences and lifestyle losses to consider. Chances are, if you are continuing to pay the mortgage when you're trying to sell your house, you will not be able to afford to maintain the lifestyle that you are accustomed to living. This may result in renting an apartment in an undesirable area or switching your children over to a different school district. All of these losses can cause considerable strain on a family, increasing the need to sell the house as quickly as possible.
How to Avoid Losing Value on Your Home
The good news is that there are plenty of ways to avoid losing value when you have difficulty selling a house. The primary reason that selling a house is difficult is due to agents or homeowners failing to effectively market the property. Smart marketing opens the door that exposes the property to the marketplace, increasing the odds of selling the house exponentially. It is imperative that you distinguish your home from the thousands of others that are on the market. The two most obvious marketing tools, open houses and print advertising, are only moderately effective when it comes to selling a house. The right agent will employ a wide variety of marketing activities, including online marketing, to expose the property to a larger, more targeted audience.
Sellers can significantly increase the odds of selling a house by marketing online, which is the number one way people find homes in today's market. Utilizing a quality online realty service can provide value that is much greater than its cost. One month of online marketing typically requires an investment of just ten dollars, or thirty dollars for six months. The return on investment (ROI) of using one of these services can be calculated by dividing the number of months and home payments the seller had to cover while the house was still owned by them by the nominal cost of the service. For the price of lunch, the seller can create the exposure necessary for selling a house quickly and relatively painlessly.
Although it is difficult to put a number on it, the cost of not being able to sell your house can be considerable when looked at from a financial and lifestyle perspective. Utilizing an online marketing service is a proven way to increase the chances of selling your home within a reasonable timeframe. For the minimal cost of an online realty service, you have nothing to lose when compared to the thousands of dollars you can expect to lose by letting your home continue to sit on the market unsold.
Neil A. Terc is the president of Yourkasa.com,
a feature-rich, online real estate
property listings service that connects home sellers with home buyers.
A successful salesman and self-taught real estate professional, Neil put
his experience to work over the last 7 years, successfully purchasing
and selling or leasing a multitude of properties. Over the years, he became
aware of the challenges all parties face when buying or selling a home
and decided to create Yourkasa to make the process easier. To learn more,
please visit www.yourkasa.com.