In a housing market that has gone haywire, many homeowners are debating within their own heads or even aloud with spouses or roommates: should we move or make improvements to the home we already own? The truth of the matter is that more homeowners are choosing to stay and fix up their own home rather than move – even though the price of buying a new home is relatively inexpensive right now.
Find out the pros and cons of both moving and remodeling so you can make the decision that is right for you and your family:
What’s Your Home Value?
Your first mission is to determine the current value of your home. You can accomplish this a couple of different ways:
- Contact your real estate agent to find out the value of comparable homes in your neighborhood.
- Visit some open houses in your area and compare those that are similar in square footage and condition to your own home.
- Check your home value estimate online to get an idea of what your home is worth.
When you’ve determined your home value without improvements, you’ll want to tack on the value you believe you can add by making smart renovations. If you’re not sure what your remodel will do to your home value, check general estimates online – like these from Realtor.com – to get an idea. Then compare the value of your home with improvements to the cost of buying a new home.
[Mortgage Help: Get your free credit report and see if your credit score is mortgage qualified]Location may also play a pivotal role in your decision. If, for instance, you love your quiet and family-oriented neighborhood, then why uproot to move to a neighborhood where you may not know what you are getting? Or if you have school-age children and you live in a good school district, it may be hard to justify changing schools. If these situations sound familiar, remodeling your home instead of moving to a new one may be a better option. If you’re still gung-ho on a new home, use tools like the PicketReport.com to learn more about the lifestyle of the neighborhoods into which you’re considering moving.
Maybe you bought your home when it was just you and your spouse. Now, you have three kids fighting over one bathroom and you feel like you are living on top of each other. Consider your lot size and the potential for and cost of adding an addition to your existing home. Depending on the scope of the addition, it may be less expensive than buying a new home. When weighing the other factors, again, a remodel often provides less hassle than starting from scratch.
Moving is expensive. Not only do you have to spend time and money packing up all of your belongings and moving it from place to place, but there are often big costs involved with getting a new home loan, including a down payment and closing costs. Then there are the costs of setting up or transferring your utilities and other services. Depending on the home improvements you want or need to make, you may be on the winning end to stay where you are.
Before you decide to put your house on the market and find a new home, stop and consider the reasons you are moving. When you compare turning your current home into what you want it to be, to finding a new home, you may or may not find it to be an advantage.