“Home Improvement vs. Moving: Making the Right Choice”

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Remodeling vs. Moving: Making the Right Choice for Your Home

Remodeling your home can be a significant project. Depending on the scope and cost, it might be more practical to sell your home and relocate. Your budget is a crucial factor in deciding whether to renovate or move. Additionally, your home’s design and functionality play a role. While some upgrades can enhance your quality of life and potentially increase your home’s value, they can’t fix everything. Here are some considerations if you’re torn between remodeling and moving.

1. Evaluate What You Want to Change

Identify the changes that would make you want to stay in your home. Whether it’s installing new flooring or adding another room, get clear on what those renovations would entail. This can help you assess the project’s scope, which will shape your budget.

According to a National Association of Realtors (NAR) report, 84% of homeowners have a greater desire to stay in their home after remodeling. This could influence your decision if you plan on staying long-term. For instance, adding a pool could be something your family enjoys for years to come.

2. Research Remodeling Prices

Remodeling costs vary widely depending on the project. According to HomeAdvisor, the national average cost of a kitchen remodel is $25,300, while bathrooms run around $10,600. While you may handle small tasks yourself, larger or more complex renovations usually require professional help. Start by asking for recommendations from friends, family, and neighbors, and read online reviews to find highly-rated contractors. Gather estimates and compare bids.

Consider these tips to plan for home improvement expenses:

• Make a budget.
• Compare contractors and bids.
• Delay your project until the off-season.
• Do some of the work yourself.
• Look for deals on materials.

3. Consider Market Conditions

Your local real estate market can help you decide whether to renovate or move. Inventory, home prices, and mortgage rates are constantly changing. In a seller’s market, you might easily attract buyers but struggle to find your next home. Connect with a local real estate agent familiar with your area to get a feel for current home prices and inventory. High interest rates can also increase the cost of a new mortgage.

If you decide to stay, some renovations could increase your home’s value, potentially fetching more money when you eventually sell. The following home improvements are thought to add the most value:

• Kitchen upgrades
• Refinishing or installing hardwood flooring
• Upgrading your insulation
• Converting a basement or attic into a living area
• Putting in new siding
• Replacing your roof
• Updating your garage door
• Installing vinyl windows

4. Factor in Your Location

Renovations might not be worth it if you’re unhappy with your home’s location. A different neighborhood may offer lower property taxes or better schools. Conversely, you might be more willing to remodel if it means staying in an area you love, assuming it fits your budget. Consider what matters most to you in a home, then factor that into your decision to remodel or move.

5. Think About the Costs of Selling

Selling a home comes with costs, including:

• Updating your home: Minor updates can help attract buyers, such as sprucing up landscaping or installing a new garage door. Functional repairs, like fixing a leaky roof, are also important.
• Home staging: Some sellers work with professional home staging companies to declutter and swap in new furniture and decor. According to NAR, most home stagers charge $300 to $600 for an initial consultation, then $500 to $600 per month for each staged room.
• Realtor fees: Listing agents generally take a 6% commission from the final home price. If you sell your home for $340,000, you could lose over $20,000 to fees.
• Closing costs: If you buy a new home, expect to pay 2% to 5% in closing costs, generally paid upfront when the sale is finalized.

6. Weigh the Inconveniences of Remodeling

Remodeling can disrupt your home life and be stressful in the short term. You might have to deal with construction noise and parts of your house may be unlivable. Unexpected costs can also arise, making it harder to save for other financial goals. Ensure you’re ready to commit before starting a renovation project.

The Bottom Line

Deciding whether to renovate or move involves weighing the pros and cons and considering unique costs. Your budget, housing goals, and local market conditions can help guide your decision.

If you decide to move, your credit will play an important role in securing a new home loan. For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make the best decision for your future.

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