Is it Better to Remodel or Move?
You should sell. It’s a great time to be in the market. Take advantage of today’s interest rates and the hot market.
At least, that’s what you expect to hear if you ask someone whether you should remodel or move. But the quick answer isn’t always the best one for your situation. A better solution is to consider the pros and cons with your MetroTex Realtor to figure out which decision is in your best interest. Even if you don’t end up listing your house right now, you’ll be more likely to get the most out of your house later – if you take the time to have a conversation. Here are our thoughts about what to consider when your house just isn’t meeting your needs any more.
How long are you planning to keep the house? If you love the neighborhood but hate the bathroom, then a renovation keeps you in the house and neighborhood where you are comfortable. If you need more space because your family is growing and you want a long-term solution, then it’s probably time to go. Think about where you are in life and what’s coming down the pike in the next 5 years. If you think you’ll move again soon anyway, then it might be best to update enough to get the most bang for your buck on resale but save the big spend for your next downpayment.
How much are you planning on doing to the house? For most homeowners, the big list includes updating flooring, kitchens and baths. Keep a running tally in your head of roughly how much you’re thinking about spending. A typical bath remodel of flooring, tub/shower surround, cabinets, paint, sinks, lights and faucets can run between $6000 – $10,000 depending on size and quality of finishes. Kitchens average from $15,000 – $50,000 or more. Installed carpet is typically about $5-7/sf and hardwoods average $8-15/sf. Of course, you’ll want your MetroTex Realtor to recommend contractors to give you more accurate quotes, but you’ll have a general idea of how much you will need to spend to get the house you want. If you are thinking about moving a lot of walls, plumbing, or adding on, then unless you are absolutely in love with your location, it’s probably time to start looking for something else.
How much equity do you have in the house? If you have a lot of equity in the house, then you’ll have more financing options to pay for the remodel. You can consider a home equity line of credit or home equity loan rather than paying cash or opening several lines of credit at the big box stores. Interest on home equity loans is tax-deductible like a mortgage so it takes the sting out of the bills a little. Alternatively, if you don’t have much equity, you could end up putting yourself underwater. Granted, in this market you likely wouldn’t stay underwater too long, but you might not want to pay for an extensive remodel if you’re planning to sell soon anyway.
Are you willing to put up with construction mess for 3, 6, or 12 months? Because no matter how long you think it should take, it will take longer.
What do you think your house would sell for as it is? What would it sell for if you updated a little? And what would it sell for if you completely remodeled? Finally, what would your budget be if you bought new? Would that budget get you what you want?” Your MetroTex Realtor can provide comparable property evaluations that consider homes in similar condition to yours and homes that have already been remodeled. This will give you a good idea of how much you could expect to recoup from your remodel should you need to sell soon. Remember, homes that have been updated will sell more quickly and for more money than those that haven’t. But updates that are more than 10 years old don’t really count for much on the resale market.