Should I remodel or move to a new home? It can be stressful when life hits a crossroads. It’s even more stressful when making the wrong move that could cost you big, big money.
You have a house, and you adore it. You chose her for all of the right reasons. You’ve made memories there, but it’s no longer meeting your growing needs. Perhaps it lacks a playroom or a first-floor laundry. Perhaps it is too tiny for your expanding family. If you’re unhappy, you have three options: remodel to fit your requirements, purchase a new home that checks all of your boxes, or continue to suffer, which I don’t personally recommend. The decision to remodel or move to a new home has two components: financial and emotional.
Let us talk about money by beginning to look at the costs of moving to a new location. You’ll undoubtedly want to sell your present house in order to purchase a new one. Shouldn’t it be a simple fix? Sell your present property and then get a nicer one. But wait, there’s more to it than what you know.
First, you’ll need to take out some cash to pay for repairs. You want your house to appear at its best while you’re trying to sell it. The cost of repairs and touch-ups can vary depending on what you need, but they can be expensive. In addition to the labor costs for the repairs, you’ll have to pay your real estate agent to sell your home.
Agent commissions come usually around 5% of the sale price of the home. Who knew selling a property could be so expensive? Almost as pricey as purchasing a new one. Almost, but not quite as pricey. If you’re upsizing, your next home will most certainly cost more.
You should also examine if the new expenses listed below will apply to you. Higher property taxes, higher utility consumption, home size, and age all matter. Additional factors to consider are the greater cost of living and the type of community you’ll be relocating to.
Depending on where you relocate, everything, even groceries, may cost more. Not to mention the cost of your new home. Closing costs will range between 3% and 6% of your new mortgage and will include home appraisals and title insurance.
Then there’s the actual relocation. A cross-country transfer will cost between $2000 and $8000, whereas a local move would cost around $116 per hour. Another significant cost may be two overlapping mortgages. If you are unable to sell your current home before moving, the costs might quickly build up depending on how long the overlap lasts. You should also consider the fact that unless the new property is move-in ready, you will be upgrading it. When moving into a new house, most new home buyers spend a large amount of money on renovating and new appliances.
While it is more of an investment than a cost, it is still a significant sum to consider. You should also consider the expense of relocating to a higher-cost-of-living location, as well as your new, likely more costly mortgage. That’s a lot of costs to consider, but they could be worthwhile.
Remodeling Your Home
What about renovations? Similar calculations apply to house improvement. Renovations may be expensive. According to HomeAdvisor, the typical house remodeling in the United States costs over $50,000. Experts advise adding 20% to your remodeling budget to accommodate for unexpected difficulties and expenditures. Overspending is possible, but it may be avoided if your remodeling is carefully planned.
If you’re expecting that a remodel would increase the value of your home, be sure you understand what sorts of remodeling projects will truly increase the value. Keep in mind that housing trends come and go.
Furthermore, if you have equity in your property, you may be able to cash out remortgage for home upgrades. A home equity loan or a personal loan are two more alternatives. Remember that doing so will incur many of the same costs as buying a new property, such as closing charges and interest rates. And if you’re remodeling, your brand-new old house will almost certainly have higher utility costs and property taxes.
The decision to remodel your current home or move to a new home is a big one, and there’s no definite answer. You may find that moving and following our home-buying checklist is the best choice for you. Or you may realize that working with what you have and remodeling is the better option.
Whatever you choose, it is important to consult with a trusted professional real estate agent to make the best out of your decision. If you want to learn more real estate tips, from buying and selling homes to home maintenance guides, stay updated by clicking here to see more of our blog posts.