How much does it cost to have your Long Island House sit on the market?
When most people are selling a house, they just focus on how much money they will receive when the house sells. They try to maximize their net return i.e. the selling price less all of their expenses (e.g. remaining mortgage owed to bank, real estate fees, amount invested to prepare the house for sale, etc.).
While this logically makes sense, there is one very important cost that is usually overlooked. And, that is the cost associated with TIME ON MARKET! Yes, there is a real cost associated with this, and it can be rather large, especially if you live on Long Island (as real estate and taxes are more expensive in this part of the country).
So, this article addresses the often hidden and overlooked cost of time…time on the market as well as time to prepare your house for the market.
What types of costs are there when preparing the house and selling it?
There are 2 main categories of costs. First, there is the physical out of pocket expenses that you will need to keep paying until a new buyer takes possession. Those would include real estate taxes and maintenance costs. This is where we are going to focus on this article.
Second, there is often an opportunity cost for waiting. Some of these costs are intangible and some are very real. They can vary greatly based on the seller’s personal situation and due to ever changing trends in the market place. For example, there is the time value of money (money today is worth more than money tomorrow (net present value) and if you are in a difficult financial position waiting for the net proceeds from the house can be very costly (especially if you need it to pay down debt).
Or, if you are waiting to sell your house because you want to trade up to a new (and more expensive) house, and the market and/or interest rates are increasing, waiting will cost you more money on the new house. Conversely, if you are downsizing and the market is declining, waiting may also cost you money in the selling price you may achieve.
There are many potential costs, risks, and annoyances associated with this latter type of cost. But, I’m not going to delve into those here because they vary so widely based on individual needs and priorities. Instead, I’m going to focus on the definitely tangible costs that EVERY seller faces, while their house is on the market…or, is about to go on the market.
Some sellers mistakenly think that waiting to sell a house will net them more money, but this assumption is usually a mistaken presumption. First, it is an assumption…no one really knows if the market will go up or down. Second, it mistakenly omits a major part of the equation…THE COST FOR WAITING.
The cost of having your Long Island Home sit on the market – Maintenance and Ongoing Costs
First, I do want to preface that preparing your house for the market so it shows in the best light is critical when you want to sell it. When you properly take care of the basics (e.g. do repairs, minor improvements (e.g. paint, sand floors, etc.), clean and stage a home), it will generally net you a higher return and help you sell your home faster. You don’t want to rush this, nor sacrifice this opportunity to rush to market for an artificial deadline (even if the real estate agent is pushing for that date). It’s more important to have your home in tip top condition.
But, I am telling you that you want to move swiftly. The faster you prepare your home for the market the better off you are. So get started right away. Don’t make decisions hastily, but definitely avoid delaying decision making. Once you make a decision, move quickly and make things happen. The faster you do this, the faster you can sell and move on with the next phase of your life. And, the less it will cost you to maintain the house.
Doing nothing and delaying does cost money…as you’ll see.
Time is money. And, as time marches on the costs of maintaining it increases, especially as the house and roof continue to age. Every money a house sits, it cost you a lot of money.
Here are the costs to have your house sit on the market:
1. Real Estate Taxes
Real Estate Taxes on Long Island are rather high compared to the rest of the US. The average real estate taxes for a single family home in Nassau County are $9289.00/year (or $774.09/ month). In Suffolk County, it’s a bit lower at $8151.00/year ($679.51/month) but they are still high. And, of course, if you are in a higher tax rate town or a larger property, it could cost much more. Even if the house is vacant, you are still responsible for the real estate taxes.
If you haven’t paid off the mortgage yet, then you will continue making payments. While a portion of this will contribute to paying the principle down, there is also a portion that you are paying the bank for interest. And, if you have PMI (Private Mortgage Insurance) you are paying that to the bank too. All of that is money down the drain.
3. Cost for Utilities
You will need to continue to pay for heat/AC/electric/gas/water to maintain the house (even if it is vacant). It’s critical to pay for these to make sure the house is comfortable for potential buyers (and yes, they will check the water and lights). And, of course, these will need to be tested by the inspector. During the winter, you need to make sure the home is heated and during the spring and summer, you’ll want to make sure that it’s well air conditioned. There is nothing worse than having potential buyers browse your house and have them want to leave because they are too hot or too cold. This will only prolong the time the house is on the market.
Don’t even think about turning the utilities off…while this may “save” you a bit of money, it can definitely cost you MUCH more in the long run (aside from increasing your time on market). This is just penny-wise pound foolish as you may run into all sorts of other issues including frozen pipes in the winter/bursting pipes (which can cause all sorts of water damage and replacement of floors/walls, appliances, etc.)
If it’s too warm, your hardwood floors may swell and buckle, paint may chip off the walls, and you may get mold and other smells. I’ve seen this happen often in vacant homes and believe me, it costs a lot to repair, and it will delay your time on market even more.
Here on Long Island, the average monthly costs for an average home are around $300-500/month. (It can vary a bit based on time of year).
Don’t even think about shutting off the insurance. That’s a recipe for a disaster as you never know when Murphy’s Law will strike. And, of course, things like this happen more often in vacant homes both because there is no one living there for early detection (e.g. noticing a water leak) or it could be an easy target for vagrants or squatters (especially if your home is listed on the MLS).
You should also be aware that insurance policies are higher for vacant homes for this reason. And, if there was a recent death, you’ll want to inform the insurance carrier so that you are properly covered in case something does happen.
And, yes, there are many things that can happen. There could be a major hurricane, or even just a very heavy rain storm which causes a roof leak, or a flood in the basement. Or the water heater could give out or explode. Or a toilet may overflow (e.g. from a buyer who comes in to tour the house). Or, there could be a major snow storm, and the weight of the snow could crush the roof. Or you could get ice damming as the snow starts to melt. Or a tree may fall on the house (from a lightning strike). Or someone could break into the house.
There are all sorts of things that could go wrong. Don’t let it happen to you.
On Long Island, the average monthly cost for insurance is $100-200. Note: If you live in a flood zone and have flood insurance, it can be MUCH higher.
5. Outdoor Maintenance
You’ll need to make sure that you keep the lawn mowed throughout the spring, summer and early fall. You’ll want to make sure the flowers, lawn and bushes get enough water. And, of course in the fall you’ll need to have some one rake the leaves (many times). And, during the winter, you’ll need to make sure the driveway is plowed and the walkways are cleared of snow. After all, people need to see your house if they’re going to buy it.
And, of course, you don’t want them slipping on the driveway or walkway. This could be an expensive law suit (and of course another reason to make sure you have insurance with an umbrella policy).
Of course you need to clean the house so it sparkles before it goes on the market. But, don’t forget that you will need to also make sure it’s cleaned periodically (probably weekly) while your house is on the market. Buyers may make a mess on the floors (especially in the entry area, and especially if it’s raining or there is snow on the ground. But, also, there is just the natural collection of dust circulating and then settling on the floors, furniture and shelving. And, this is more noticeable if the house is vacant and there is no furniture.
You will also want to make sure that someone checks the bathrooms (yes, sometimes the toilet doesn’t flush…or it keeps running). Check the water to make sure it’s working properly. Flush the toilets to make sure they are fine (if pipes dry out, you may have some other issues on your hands…including odors).
Also, check for insects. I can’t even tell you how many spiders and dead roaches I’ve found in vacant homes. And, believe me, they are a huge turn off for potential buyers.
7. Checking on the house
Be sure that you periodically check on the house if it’s vacant. I’d recommend at least once a week and certainly after any storms. You never when something may happen. It may be as simple as needing to do a bit of extra clean up and check to make sure the heat and water are working. You also want to make sure there is nothing seriously wrong (e.g. water leak or a squatter). I have seen and heard of all sorts of crazy stories, and you don’t want them to happen to you.
Of course, if you if the house is vacant and you don’t live here, you may need to pay someone to check up on things for you.
Summary for the average yearly and monthly cost for a Long Island house on the market
As you can see, having your house sit on the market COSTS money. And preparing your house for the market COST money. In fact, every day that it sits, it COSTS you money. Indecision and delays COST you money. Don’t forget this!
Here’s a quick summary checklist of the costs. (I’ve excluded the items that you may or may not need to pay (e.g. Mortgage) pending on your situation. Fill in your costs to get a total picture of what it would be for you if you live in Nassau County on Long Island.
- Real Estate Taxes $774 $9.289
- Mortgage TBD TBD (If the mortgage isn’t paid off yet, this could be large)
- Utilities $400 $4,800
- Home Insurance $150 $1,800 (Note: vacant home insurance is more expensive)
- On going cleaning $100 $1,200
- On going outdoor $200 $2,400
- Checking on the house——— (If you live there or do this yourself, the only cost is time)
Total $1,624+ $19,488+
So, for each month your house sits on the market, it costs at least $1,624/month or $19,488 per year. So if your house sits on the market for 6 months (from list date to close date), that costs you $9.744. Likewise, if it takes you 6 months to get the house ready for the market, it will cost $19,488 (for the 6 months to prep and the 6 months on the market).
Of course, if you still have a mortgage, it will cost even more (pending on your mortgage and interest rate). And, there can be some other costs such as PMI, hiring someone to check on the house if it’s empty, etc.
So is there a faster way? YES!
You can sell your house to an investor who will buy your house for cash. They will be able to condense the timeline and potentially close within 2 to 4 weeks. More about that in a bit.
So how long does the average house on Long Island stay on the market?
For most people, it will take them 3 to 6 months to prepare a house for the market. This could include repairs, minor improvements such as sanding the floors or painting, cleaning and decluttering, etc. Certainly it can take longer if the home has been living in for 30-40+ years and there is deferred maintenance (and accumulated personal items). This can also take longer if it’s an inherited home and multiple siblings may have different opinions. It may also take longer if the owner lives somewhere out of the area.
Once on the market, the time can vary. Currently, the average days on market for Nassau County has been hovering around 190 days meaning that it takes an average of close to 6.5 months for a house to sell (assuming it does in fact sell).
This assumes that the house is well maintained and prepared for the market and that it’s priced well. If so, here on Long, a house will often take 3 months to get an accepted offer. Note: If the house is priced too high or has too many issues with it, it can take much longer (e.g. 6 to 12 months) and if it’s a luxury home (e.g. $1 million dollars or higher), it could easily take much longer (e.g. 12+ months).
Once you have an accepted offer, there are many more steps in the process including the inspection, appraisal and title search. And, here in NY, we are an attorney state, which means that attorneys (for both the buyer and seller) are involved and that lengthens the process (vs other areas of the country). And, now, with all the added delays from the mortgage process and bank, it takes a long time to process the loan and coordinate all parties. So, it’s safe to assume that once you have an accepted offer, it will probably be at least 3 months before you close.
Is there a faster way? Yes!
Preparing a house for the market costs money…and at times, it can get rather expensive, pending on the condition of the home. In some cases, estates (or their heirs) don’t have the cash on hand to make these improvements, and they find themselves in a Catch 22 situation: The house won’t sell until the improvements are made, but you may not have the funds to make the changes until the house sells.
Here’s where an investor can really help.
An alternative faster method of selling an inherited house on Long Island
What can you do if you need to (or want to) sell the house much faster? What if the house needs a ton of repairs and you don’t have the funds to make the repairs or bring the house to a marketable state? If the home is in very poor shape, it’s sometimes best to market it to an investor, as they are more likely to buy it “as is.” They will have the funding and access to contractors who can fix and flip the house (or rent it out).
This can save a LOT of time and headache. It will also help you avoid paying the ongoing hidden costs for maintaining the home. Selling a home can be a long and stressful process. It requires keeping the home in tip top condition as you never know when a buyer and their agent will want to view the house.
Also, remember that when you make most home renovations, the return on investment may only be 70-85%, so at some point if there’s a lot of work that needs to be done, you may be better served by selling your house “as is.”
If your house is on Long Island, we can help you.
Here at Long Island Cash House Buyer, we make things easy and fast for you. First, we will buy your house “as is.” Yes, “as is!” We will fix whatever issues the house has (i.e. we will take care of all the repairs, any tax liens you may have and we can even clear out all the extra “stuff” and/or mess.
There are no costs for you…no real estate fees or closing costs.
And, best of all, we can usually close in 2-4 weeks!
If you are interested in learning more about the cash home buying process or are ready to talk to Mr. Witt today about selling your home for cash, please give Long Island Cash Home Buyer a call today at (516) 330-6940 or fill out the quick property evaluation form below. We look forward to working with you to sell your Long Island Home quicker than any other alternative!
Other useful resources:
- Selling a house to settle an estate on Long Island – The Ultimate Guide
- Can you sell a house “as is?”
- Compare: Listing a house with an agent vs selling for cash
Do you need to sell your Long Island house quickly?
Since 1998, we have been a trusted source for the latest information in regards to selling your home fast for cash on Long Island. We will have an honest conversation with you about the benefits and disadvantages of a quick cash sale of your property. If it is not right for you then it will not be right for us. It must be a win-win situation.
- We have purchased hundreds of homes with cash since 1998
- We have over $5,000,000.00 in funding available to purchase Long Island homes.
- You will always get cash at the closing.
- We always keep our word and will always tell you the truth.
- We will purchase your home as-is, in its present condition, no matter how much work is required.
- You can avoid all the costs and frustrations of fixing your property for sale.
We are the buyers. We are interested in buying your home- not in listing it as a Real Estate Broker.
Our Home Buying Timeline is typically 2-4 weeks from initial contact to closing of the property. If you need to close faster, it is certainly possible. If you need more time than that to close, that is available as well. We are the go-to if you want to sell your Long Island home quickly!
If necessary, we will cover normal closing costs. You will not have to pay anything or bring any money to the closing. All you have to bring to the closing are the keys!
Our process is substantially faster and much less stressful than listing with a real estate broker. When you list the home with a broker you can count on 6-12 months and possibly longer before you get to the closing table. While it is likely you will end up with more money with a traditional real estate listing, our process is completely hassle free and fast!
Benefits of Selling Your Long Island Home For Cash
We are not moving into the house. Therefore there is no need to coordinate closings or lease expirations. There are no buyer showings or Open Houses ever. There is no renegotiating after a Home Inspector goes through your property. There is no waiting for a mortgage approval that may or may not materialize. You can even leave the contents of the house if that suits you best.
If you want a fast, trouble-free sale, contact us and we will make every effort to make it a win-win situation for both parties.
Who should consider selling their house this way?
- Need to sell the house quickly without issues.
- Inherited a property and want to meet your obligations as soon as possible.
- In the process of Foreclosure.
- Have an Unpaid Tax Lien.
- Out-of Town homeowner that wants to liquidate the property.
- Need to sell your house before you can buy another property
- Relocating either for work or lifestyle reasons and will not be here to sell your house in the traditional manner.
While these are the major reasons that people choose us to do business with, every circumstance is unique, and we are open and innovative in our approach to solving any and all Real Estate problems.
Let us help you.
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