Remember why you bought your current home? But now there are things you'd like to change. The big question is should you remodel or move to the house of your dreams.
Deciding to remodel or move is a huge decision. There are the obvious financial factors to think about. Even more important, you'll want to consider how each choice will improve your family's lifestyle now and into the future … and whether the benefits outweigh the cost.
We explore these emotional considerations to help you make the best decision for your family and your budget. While your home is a great investment, you want to spend wisely (read: Remodeling Projects: Their Cost & Value) and consider how these decisions will affect your long-term financial position.
Remodel or Move: Questions to Help You Decide
To make sure this list of questions is most helpful, have each family member identify the three things that are most important to them. Add them to the list if they're missing. You can also drop questions from this list if they won't affect your lifestyle.
Now answer the questions and more important, use them for family discussions. Include older children who might surprise you with their insight about what they like about your current home, schools and neighborhood.
- Do you know, like and spend time with your neighbors? This is critical as it's hard to predict how well you'll get along with new neighbors.
- Are you happy with your schools and recreational facilities like a community pool, tennis courts, bike trails and the local library?
- Does your current home have enough space today, including attic and/or basement space that could be finished if you need an extra bedroom?
- If an addition is needed for more space, does your lot and zoning allow a larger footprint to meet family needs?
- Is your family and lifestyle flexible enough to tolerate the chaos a large remodeling project will entail for six to nine months (or longer)?
Remember that there's also chaos when you pack up your home's contents, move it and unpack. Some families find it easier to move to temporary quarters during construction but that will add costs.
- Have you identified a budget and how you will finance a remodeling project or move? If you expect a much lower mortgage rate, try factoring in the cost of refinancing your existing mortgage.
- Selling costs include repairs to ready a house for sale, realtor commission and other local seller costs plus duplicate carrying costs if you close on your new house first.
- Moving costs for a local, in state move is easier to manage. Costs include packing, local mover (check references), potential short-term storage and unpacking.
- Remodeling costs will be higher than you expect. In addition to new finishes (cabinets, flooring, lighting and more), there will be structural costs for moving walls, electrical, etc. You should also plan 20% of your budget to repair surprises found once the project starts.
- Buying costs include the standard real estate transaction costs with title insurance and taxes among the highest. The wild card is the changes you want to make before moving in, like painting or new flooring.
- How long will you enjoy the remodeled or new house to justify the investment you plan to make? This is where you need to be pessimistic and consider the worst case scenario.
- How tight is your timeline to complete your remodeling project or move?
- Selling your home, buying a new house and moving will take four months or longer. This timeline covers preparing your home for sale and updating the new house before moving in.
- Depending on the scope of your remodeling project (2 or more rooms), it can take six months to a year for a major addition.
- Building a custom home will take a year to 18 months. Production houses from when you sign a contract might go faster but there's never a guarantee.
- Is the real estate market favorable for selling and buying? Remember that a hot market is good for sellers, less so for buyers so what will that mean for you? (read: Homeowner Strategies for Selling Their House)
Whether you decide to remodel or move to create your dream home, the enjoyment will be rewarding. Best of all, you'll soon forget all the hard work you put into improving your lifestyle so get going!
PS Here are some great remodeling books to help you decide what you want … and what things cost.