Are you feeling like your family has outgrown your current home? Maybe you have a new perspective after spending most of the last year and half at home and want to transform your space to be more livable. These two different perspectives have you ready to make a change, should you sell your home and move or remodel your current one. With housing markets around the country heating up, people have begun listing their homes or starting those remodel projects not only to make their homes more enjoyable but also raise the value.
A majority of Americans agree that moving is the most stressful life event but is living in a construction zone any easier? There’s a number of factors to consider when making this type of decision; your current financial situation, impact on your home insurance, and emotional state of you and your family. We will tackle the pro’s, con’s and questions to ask yourself before diving into whether you should move or remodel.
4 Questions to Consider
Moving and remodeling can both be costly, stressful and time-consuming. Take the time to answer the four questions below before you decide which option is best for you and your family at this time.
1. Overall Cost
Is it cheaper to remodel or buy a new home? A major factor in home improvement and purchasing a new home is the cost associated with it. Your current mortgage along with how much you have in savings will impact whether it is more affordable to sell or remodel. Consider this, remodeling your home will result in instantaneous expenses whereas moving can potentially put money in your pocket if you sell your home for a decent sum. If you do need to pay a down payment on a new home, this could be a large up front cost to consider with moving versus a renovation.
2. Emotional Bond
It’s possible your family is more attached to your home than you may realize, but when the possibility of selling is brought to the table the feelings will come to light. Your home has been the place where you have built cherished memories, watched children grow up, and potentially said goodbye to a loved one. You will want to consider these emotional implications before you decide whether moving to a new home or staying put and remodeling is the best choice for you. The stress of moving on top of coping with the loss of memories made can put an added burden on a family.
3. Housing Market
What is the current state of the real estate market? It may be more affordable to move over remodeling but will you get the most out of your investment if you sell during a crashed market. We recommend you do your research about market conditions and speak with other home buyers before you list your home. Seasonal trends are another thing to consider, we are headed into warmer weather which will result in more homes making their way to the market. Homes tend to sell faster in spring and summer, and they’re more likely to sell at or above the asking price.
Is the timing right for you and your family? Selling your home and moving may not always be practical or feasible depending on your stage of life, family needs, and stress levels. Moving could mean changing school districts, longer work commutes and mortgage costs. On the flip side moving could be an opportunity to get into a better school district, shorten your daily work commute and potentially lower mortgage costs. It's important to keep in mind that remodeling a house comes with out-of-pocket expenses. If you are setting aside money for college savings or other finances, can you afford a costly renovation right now, or would it make sense to take advantage of your equity and sell for extra cash?
The Pro's and Con's
Depending on your current home mortgage, remodeling may be a more cost-effective route. Renovation costs are an immediate upfront cost but moving can have costs associated with it too, ones that add up quickly. Purchasing a new home is exciting but it may require you to sell your existing home to have the funds available. Before you get caught up in the excitement of purchasing a new home or remodeling your current home, consider the other factors that will add cost, time, stress and potentially displacing your family for a short period of time.
As the housing market heats up with summer, prices will continue to rise which is a motivating factor for people to list their homes for maximum return. This can be a big bonus for sellers but it’s important to remember that you’ll likely pay more when you go to secure your new mortgage due to market demand. A surge in the market can also drive-up other costs such as homeowner’s insurance and property taxes, two expenses that will add up over time.
So back to the ultimate question: should you move, or should you remodel your current home? Let’s weigh in on the pros and cons of each decision to help you make the right choice.
The Advantages of a New Home
There are a slew of advantages that come with purchasing a new home, the biggest one is choosing the location and style of home. If your current home feels cramped, you can size up to fit your growing family comfortably or perhaps you are empty nesters looking to downsize to lighten your load. Neighborhoods and preferences change over time, by moving to a new location you can choose something that fits your current wants and needs improving your overall quality of life. Maybe you didn’t have children when you first moved into your home, but now you have schooling and extracurricular activities to consider. You could choose an area with great schools, parks, and places to take your children which you don’t get when remodeling your existing home.
Living in a construction home is dirty and inconvenient. By moving to a new home versus remodeling you won’t have to live in a construction zone. If your remodel plans are to expand the kitchen, take down walls, or improve bathroom function, purchasing a new home could save you from both the work and the mess. Renovation of a kitchen is one of the most inconvenient projects but most needed in older homes for improved functionality. A kitchen overhaul means finding another place to prepare food, cook, store cooking ware and potentially spending quality time enjoying meals.
Depending on the type of home you are purchasing or moving into, not having to deal with contractors is something that could be a bonus. Having contractors coming in and out of your home is rarely stress free and requires you to sacrifice your time to accommodate to their schedules. Hiccups along the way are common when remodeling or building a home but not everyone wants to deal with the expense or the drama it can bring. **Tip: If you do work with contractors, do your research beforehand to gain a better understanding of their work style, quality of work and other peoples experiences.
The Disadvantages of a New Home
When it comes to purchasing a new home you may have to settle if you don’t build it from the ground up. The raise in home prices is attributed to the lack of homes on the market which may mean limited options in your desired area. When purchasing a new home that has already been built it’s common for it to check off some of the boxes but may not have every amenity you seek. This leaves new home owners having to compromise if they don’t go the new build route.
You may have to leave an area you’ve grown to love. If you love your current neighborhood but want to upsize and can’t find something bigger, leaving the area to get what you want can be a major disadvantage. You may love your new house, but what if you don’t love your new neighborhood or your child doesn’t like their new school?
Buying a new home can be time consuming and stressful plus the move. Searching for a new home, securing financing, and closing on the new home while selling your current home can be a huge hassle. Timing can be especially tricky with homes flying off the market in the blink of an eye. Moving is expensive. While you might find a “deal” on a new home that brings it within your price range, don’t forget the costs of selling your home and moving. You’ll likely need to pay the real estate agent commissions, closing costs on both homes, moving costs, and the costs of any upgrades needed (paint, new carpet, etc.) for your new home.
The Advantages of Remodeling
When remodeling your home, if cost and space permits, you can build to exact specifications. Remodeling lets you choose exactly how everything is created and finished to suit your needs and tastes. This is a big contrast to selling your home and moving since your new home won’t be designed just for you unless you go with a new home build. If you have a lot of home equity you may be able to use that to pay for the renovation. Consider a home equity loan or HELOC. Borrowing against home equity can be less costly and less of a hassle than taking out a new home mortgage as well.
If you love your neighborhood, you don’t have to move. Remodeling lets you stay where you’re at, which can be a huge advantage if you love the local schools, your neighborhood, or the area in general. You can avoid the costs of moving and selling your home. While remodeling isn’t cheap, you can avoid the realtor commissions, moving costs, and the money you’d likely spend getting your new home exactly how you want it.
The Disadvantages of Remodeling
One of the biggest disadvantages in remodeling is the surprise expenses. A remodel requires planning but even with the budget perfectly mapped out, unexpected issues can come to the surface during a remodeling project. The surprise expenses can vary in size whether you are tearing down walls, adding gas lines, or moving plumbing. A surge in budget isn’t something any homeowner expects or welcomes kindly.
Remodeling can become an inconvenience for your family. Undergoing home improvement projects can be mentally tough, especially when you’re dealing with budgets, contracts, contractors, product selections, and potential delays. Depending on the scale of your renovation you might be living in a dusty construction zone for months or even finding another place to stay during the worst of it.
There is always the potential your home value increase won’t reflect the amount of money you put into the remodel. While remodeling your home can be cost efficient, some remodeling projects cannot offer a 100% return on your money. On the flip side, some home renovations can result in more profit than spend.
New Home or Remodel? How to Decide
There are no hard and fast rules when it comes down to deciding between selling your home or staying to remodel but there are plenty of questions you can ask yourself that will help you make the right choice. Another great question to ask yourself is what are your housing goals in the next five to ten years? If you are comfortable in your home and it works for your family, then it can make sense to remodel and work with what you have. If you plan to move in a few years anyway, then you may want to consider staying where you are and not remodeling. Keep in mind that you may not get all of your money back out of a remodel when you sell your home, spending a lot on a renovation may not make financial sense for you.
It’s important to consider your lifestyle, both today and future. Maybe your kids are out of college and starting families of their own or will soon be, you may not need a larger home at all and could benefit from a simple remodeling project to improve your home’s flow or make it more comfortable.
Also consider your finances. Moving can be extremely expensive, but so can remodeling. Before you choose either option, make sure you can truly afford it. Money you borrow will ultimately need to be paid back, so you should be prepared to pay for your dream home for the long haul.
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We are committed to helping you build your dream home from the ground up or in one of our model homes. If you have an idea of what you are looking for in a home we are happy to help you turn a house into a home with our professional design team, skilled engineers, and top quality home builds. To get started feel free to call (435) 228-4702 or fill out the form below.