Remodel or Sell – Which is better?
This is a great question and has many different answers.
First ask yourself the following questions.
What would I change in my home if the cost of doing it was not an issue?
What do I love about my home?
How is the neighborhood?
If you have children, are the schools what I want them to be?
Is your commute to work a consideration?
Is shopping convenient to my home?
The reason for the above questions is pretty simple, just like the news; we tend to focus on the negatives instead of the positives. Keeping the positives in mind may actually help your decision process of what path to follow. At Foster Remodeling Solutions we focus on helping you make your home everything you want so obviously we would rather everyone stays and improves their home with us instead of moving.
The reason I want you to recognize the positives in your current home is simple. Many times over the years I have visited with homeowners that moved into their home less than 2 years ago and now they are recognizing the shortcomings of their new home and here we are discussing remodeling in their new home.. Selling your home and buying a new home is a very emotional purchase. The focuses of most buyers when they search for a new home are the areas of the existing home don’t meet their goals. Maybe the kitchen wasn’t big enough or was lacking storage. Was the Master Bathroom is too small? Is there room for guests or to entertain? The bottom line is that while you focus on these or other items you may not look as closely at the areas in the new house which your current home meets or exceeds.
In addition to the questions there are costs associated with a move that are not insignificant. First, the costs required to get the home ready to sell can add up quickly. This may include some cosmetic painting, new carpets, window treatments, home staging which may include storage of existing furnishings, and some updates. The costs for this are generally not recovered in the sale even if your home goes to settlement 60 days sooner than without these costs. In addition the cost for a mover may get close to 10K depending upon the size of your house. Finally and most importantly, consider the real estate fees and any incentives that may be necessary. On a home with a value of $500,000 these costs will be at least $30,000. Add these to the cost of the move and associated costs to sell and your investment can easily exceed $40,000 total.
The bottom line is this! Improving your home adds value. While the total value of the return is not 100% immediately and there is a difference between project types and the return on investment, most projects can and do return more than 70% immediately and some over 80%. This generally means that even with modest growth in the real estate market your investment will grow while you enjoy the new or remodeled space. In 5-7 years you will have the full return of your investment without the costs of moving.
The only time that this scenario may not work out is when you are downsizing your home. I can’t think of a scenario where taking some of the existing home away makes sense.
|Remodel or Move – Example 1|
|“As is” house value||$500,000.00||Better House||$630,000.00|
|Moving costs||$8,000.00||Moving costs||$8,000.00|
|Real Estates fees||$30,000.00||Real Estate Fees||$30,000.00|
|Staging or clean-up for showing||$3,000.00||Staging or clean-up for showing||$3,000.00|
|COST TO SELL||$41,000.00|
|Nice size remodeling project||$133,000.00||Increased financing to move||$171,000.00|
|Average Return||$93,100.00||To remodel||$133,000.00|
|Net cost to make home ideal||$39,900.00|
|Difference vs Move||$38,000.00|
Now the question is…. What may make more sense? Make the house and neighborhood I know the home I want to live in, or gamble and sell my home and move to a neighborhood I don’t know into a house that may address the negatives of my existing home and hopefully the parts I am not checking closely meet my goals as well.
article by George Domedion – Design Consultant, Foster Remodeling Solutions
For over 30 years, Foster Remodeling Solutions, Inc. has been offering kitchen remodeling, bathroom remodeling, in-law suites and home additions improvement services. Our service area extends to Fairfax, Mclean, Springfield, Woodbridge, Alexandria, Arlington, and Falls Church VA. Request for a FREE CONSULTATION at 703-550-1371 or visit us at 7211 Telegraph Square Dr, Lorton, VA 22079 today!