It’s amazing how many nice homes are vacant in the Lancaster area these days.
If you take a closer look at a number of the listed homes in Lancaster, you’ll see that in many cases the owners have already moved on leaving the house vacant.
What most sellers don’t realize is that every day their home sits vacant, their liability and risk increases.
Even if the home is owned free and clear, there are still many costs associated with keeping a property that you own such as taxes, maintenance, insurance, lawn care, etc.
In addition to that, any home that is vacant for any amount of time has the likelihood increase that the home will be vandalized.
Most insurance companies will no longer insure your home after it’s been vacant for 30 days. If that’s the case, you will need to get a new policy for your home called vacant property insurance and the premiums are exponentially higher than typical property insurance.
If you don’t tell your insurance company that the home is vacant, you also run the risk of them denying the claim in the event that there is a loss.
How Much A Vacant Home Really Costs
Consider the following scenario:
- Lancaster home worth about $100,000
- 30-year mortgage at 6% with original balance of $70,000
This home can easily have the following expenses:
Mortgage (PI): $430
Property Taxes: $140
Vacant Property Insurance: $190
Home Warranty: $40
Lawn Care: $60
Total Monthly Expenses: $950
If the home sells for $100,000 and the mortgage balance at that time is $60,000, after paying $10,000 in closing costs and commissions, there is $30,000 in equity.
But if it costs approximately $1,000/month to hold the house, this equity disappears in just 30 months.
Even after just 12 months, the equity is down approximately $12,000. Think about it!
So what are your options?
One option is to price and market the home more aggressively (likely to result in a faster sale at a lower price) or to offer incentives such as seller financing. The other alternative is to rent the property until the market comes back.
Leasing or financing the the property would reduce the insurance premium and eliminate utilities, lawn care, and pest control expenses. It would also generate income and in the case of leasing, allow the owner to wait until the market recovers to sell at a higher price.
Most sellers are hesitant to finance the sale or to lease the home because of “all the risk”. The perceived risk is that the tenant or buyer won’t pay or that they will damage the property.
A final option is to contact a company like We Buy Lancaster Houses who buys houses professionally. We Buy Lancaster Houses will make you a no-obligation cash offer to purchase the property “as-is”. We can close is as little as 30 days and sometimes much sooner than that.
So the decision boils down to …
a) Do you keep the home vacant and lose $1,000/month with almost 100% certainty? or
b) Do you lease, finance, or sell the property to “stop the bleeding” and get exposed to the possibility of something going wrong with the tenant/buyer?
c) Do you work with a professional home buyer to purchase the property “as-is”?
The choice is yours, but why not at least talk through options b and c with a reputable company like We Buy Lancaster Houses?
Do you want a no obligation cash offer? Give We Buy Lancaster Houses a call today at 717-715-0010 or fill out our form for your offer TODAY!