Renovate or Move?
With 25,000 homes for sale in the Twin Cities the question of whether you should move or renovate should be a simple one to answer. Surely the perfect home exists! But if you are considering renovating your home and choose to buy instead, then you also have a home to sell. Congratulations! You have just joined the ranks of 25, 000 other home owners who are also trying to sell their homes!
That was the situation in which a couple we recently talked to found themselves. As newlyweds, they bought the perfect home in the perfect neighborhood not too far from work and great schools. After a few years and a growing family they soon found that their home, that was just right in the beginning, was quickly becoming too small. So they searched for another perfect house in their perfect neighborhood and found one. However, they realized that in order to move they would first have to sell their house and that proved to be a more difficult proposition. Since they loved their house, neighborhood, and schools and the down turn in the economy didn’t impact them, they decided to renovate.
Perhaps you are in a similar situation, wondering if you should move or renovate. How do you make that decision? How do you know what you can do to your home and how much it will cost?
Here are a few steps that you can take to help determine the best option for you.
Understand your motivation. What is driving you to change your living situation? Is it just the house or is it your location, lot, neighborhood, or schools. If you like where you live but your house doesn’t work anymore, it may be best to consider renovating. If the driving factor is not the house itself but the location, then it may be best to move.
Create a home renovation plan. If you are going to investigate renovating, the first step is to determine how you want to live in your home. This may be challenging to do on your own. People typically have difficulty seeing past how they currently live in their home, but that’s what architects are for! A qualified home renovation architect can help you see beyond your home’s limitations and give you a vision for its possibilities. We usually start the process with a Design Consultation to develop a concept for how you want to live in your home.
Determine the cost. Once you have the design concept, you can have a local contractor give you a construction budget estimate. Most contractors are more than willing to give you that kind of information in hopes of getting the project if you decide to move ahead.
Obtain a market analysis. Have your realtor perform a market analysis on your existing home and on what the value of your home would be after the renovation is complete. These are not appraisals, but will serve as an evaluation of your home’s current and possible future market value if renovated.
Compare your home’s potential with existing houses on the market. To help you decide if it makes sense to renovate, compare your house’s current market value plus the construction budget estimate to the price of a home that has everything that you want in it. Also include in the purchase price of the new home all the associated selling, moving, and purchasing expenses.
If you can find an existing home that meets your needs, is in the location you want, the purchase price plus selling and moving expenses is less than your house’s current market value plus the construction budget estimate, AND you can sell your existing home, then the best option may be to move. But if any of these conditions don’t apply, then your best option is to renovate.
Estimate how long you plan to live in your home if you renovate. If you can see yourself living in this home after it is renovated for more than ten years, then comparing your house’s value after a renovation project to other houses currently on the market may not be as important to you.
Although this process may seem lengthy, when working with the right people, it can be accomplished in just a few weeks. If this process takes you to the decision to renovate, even though there is still more work to do, you can be confident that the time, money, and effort you put into it will be worth it in the end.