I didn’t exactly make bank when I sold my house: I walked away from closing with a check for $2,262. Plus a $300 check for selling the new owner my drapes and riding lawn mower. Honestly, I was happy to be making anything. And not having the house will be savings me around $7,000 per year. We would have been lucky to be breaking even using the house as a rental, so overall I consider it a financial win.
One thing I only thought briefly about was the refunds I’d be getting when I sold my house. I didn’t really consider them, since I wasn’t sure how much they’d amount to. I still don’t have an exact figure, but I’m expecting somewhere in the ballpark of $500.
The first refund will be coming from the gas company. After I’d owned my house for about a year, I decided to take advantage of a “budget program” the gas company was offering. The idea is that, once they have at least one year’s history of use, they’ll average your monthly payments out. That way your payments are consistent all year, instead of really low in the summer months, and really high in the winter months. Once a year, they recalculate your usage to see if they need to adjust your monthly payment up or down. When you leave the program, they calculate the difference between your actual usage, and what you’ve paid. Ideally, you’ll break even, but you may owe some, or get a refund.
In theory the program was great. But I wasn’t exactly the typical user. I replaced my furnace and hot water heater with more energy-efficient models, decreasing my gas usage tremendously. Then I replaced all the old wood windows in the house with more energy-efficient windows. This past year, we finished enclosing the laundry room, which was originally designed as more of a sun room. And, somewhere along the lines, I stopped living in the house altogether. Since no one was at the house, we kept the thermostat set at a relatively low temperature, and no one was using any hot water, or the gas stove.
Every year the gas company tried to decrease my payments to reflect the changes. But it was never enough to get me back to even. After transferring over the utilities to the new owner, I received a notice from the gas company saying I’d be receiving a refund of $159. Not too shabby!
I really liked having a consistent monthly payment on my utilities, so I did something similar with the electric company. They don’t offer a budget program, so I estimated my own monthly amount, and started making those payments in the winter, when I didn’t have the extra expense of running an air conditioner, and could build up a credit to carry me through the summer months with the same payment. And, much like the gas company, all of the renovations left me struggling in the later years to even things back out. It eventually came to the point where I was skipping payments for months on end, to use up the excessive credit that I built up on my account. After months of not paying an electric bill, I think I’m still walking away with a $120 credit.
On top of the utilities, I’ll also be receiving a refund on my mortgage escrow. There was an extra amount built in to my monthly mortgage payment to cover the semi-annual property tax and homeowner’s insurance. And, selling in May, it was coming up on both of those payments being due. Since my state does property taxes in arrears, the amount I owed in taxes was taken out in closing, instead of being taken from the savings in my escrow account. Homeowner’s insurance is paid in advance. I received a letter from the bank which just gave a generic “You’re probably getting a refund, and should see your check in 10 days”. I don’t want to make any assumptions about how much this amount is going to be, just in case there is something I’m forgetting to take into consideration. My property taxes were ridiculously low though (I think in the ballpark of $350 per year?), and my homeowner’s insurance wasn’t very expensive either, so I’m not expecting to get a huge amount back.
So, I should see some nice refund checks rolling in over the next few weeks. What am I going to do with this money? I’m not exactly sure yet. By the time the checks come in, I’ll have reached my goal of having a $5,000 emergency fund. The responsible part of me says I should just throw the money at my car payment. Part of me says I should set the money aside for whatever comes up this year. I guess for now, I’ll put it in the bank and think for a while. After all, there’s no hurry either way.
– Cindy W.