Stay Put and Remodel — or Move?
Here are seven strategies to help you decide whether to list your home or make renovations that will help make your current house meet your needs.
| By Barbara Ballinger
A New Year ushers in new resolutions, which often includes changes on the home front, but deciding what to do with it can be tough for home owners, financially and emotionally.
Here are seven key steps to help you arrive at the best solution:
1. Ask what bothers you the most about your home, such as the traffic pattern, lack of a certain room, or absence of light.
Analyze how you use your house and determine what features are missing that you want. Changes can often be made within an existing footprint, even without adding square footage. Walls can be taken down, doors removed or changed, and windows enlarged. Home owners who have been in their house for years are often only using certain rooms because of a pattern they established early on.
“Many fail to use 30 to 40 percent of their space,” says contractor Randy Tapper of RHT Design and Construction in Deerfield, Ill. He tries to guide clients toward changing their layout, so they use all spaces, before he suggests adding. Architect Duo Dickinson, author of Staying Put: Remodel Your House to Get the Home You Want (Taunton Press, 2011) concurs, and says removing walls and adding openings rather than increasing the home’s footprint can tackle a great percentage of challenges.
2. Study how your house is sited.
Discuss the land your house sits on — both the topography and condition — as well as how it’s oriented toward views. If the site always leaks ground water, has absolutely no trees (or terrible ones), or includes hideous views, then remodeling likely won’t fix your issues, Dickinson says, and selling becomes a more viable option.
3. Think about neighborhood.
If you’re very attached to the neighborhood, including the area's retail, schools, and, perhaps, proximity to major thoroughfares, it may be worthwhile for you to “build their way out of their home or site’s challenges — and stay put,” says Dickinson.
Sometimes, pleasant memories, may outweigh the option of moving.
4. Factor in time frame and family needs.
If you plan to be in the house a long time — at least five to 10 years — making significant changes, such as adding rooms, building a sunroom, or finishing a basement, may provide a worthwhile payback and incentive. If, however, you’re empty nesters and ready to downsize, then remodeling may not be the most prudent financial decision. Here’s where a good financial planner can help assess the home’s value in relationship to the rest of the assets and needs; a mortgage lender also should be tapped to discuss the costs of a new mortgage, if needed.
5. Consult contractors, designers, architects, or structural engineers, and get multiple bids, for a realistic estimate of what changes might cost.
It’s worth paying professionals for an hour of their time; some will even provide it gratis, says Dickinson. These professionals can look at a home owners’ current house, listen to what they want, appraise its condition –—including what an untrained eye may not see — and estimate costs of new work.
In addition, if the house was built more than 30 years ago and hasn’t been updated, it may require new wiring or plumbing, a new HVAC system or roof, and better insulation. A new survey may also be worthwhile depending on what changes might take place, especially if it’s dated.
6. Compare the appraisal and remodeling costs with other neighborhood homes for future resale.
Even though home owners should base decisions in large measure on enjoyment and not wholly on resale value, it’s smart to have an idea of how changes will affect the house compared with others nearby, says real estate attorney and Brooklyn Law School Professor David Reiss.
It’s never smart to overbuild for an area. The type of improvement can also affect the value. Remodeling changes may add to the house’s worth without changing real estate taxes, while an addition will probably cause an uptick in taxes.
7. Seeing is believing: See what’s available in the price range and in neighborhoods you like.
A new house may offer a better layout, the right number of bedrooms and bathrooms, an updated kitchen, or a nice yard. But also remember that even the home you buy may need some remodeling tweaks, like new paint, carpet, or an overhaul of an outdated master bathroom. Factor in the cost and time of these changes as they weigh your final decision.
Here, too, it might prove worthwhile to bring in a contractor or architect to estimate costs of any big changes such as new insulation, removing some walls, or finishing the basement.