Perhaps the most common question for a homeowner considering a major remodeling project is,“Do we move or improve?” As design + build professionals, we start each client relationship with a question and answer session about the family and home that helps create a “project profile.”This enables the Design Build Planners to assist in planning and recommending the best course of action for a remodeling project even if our assessment is to “move instead of investing in the project.”
Here are a few points that we consider. The resale value aspect of the home becomes less relevant the longer a family intends to stay in the home. A family intending to move in a few years when the kids are off to college should plan remodeling investments differently than a family with very young children, that love the neighborhood with a good school system, and expects to be in the remodeled home for 20+ years. Project funding today often involves financing like a 203K loan which is based on the completed project home value not the existing. Selling and moving in the same zip code (for a level comparison) should be considered while adding all the costs associated with selling, buying, and moving. Also note that almost no one moves into another home without a having a fresh remodeling wish list.
Here is a brief overview of the formula that we suggest:Take the estimated sale value of your home from an established source such as Zillow.com.
Add the investment amount of the desired project. Then search Realtor.com in your same zipcode for homes that describe all the features that your home, with what the completed project,would have…size, number of beds, baths, garages plus the condition of interior, exterior, kitchen, baths and also the property size. If all the homes in the search are at least $50-75K* less than your home’s adjusted value you should probably consider moving. If not; improving is possibly a better option.
* allowing for associated costs of selling and moving: realtor fees, lawyer, mortgage closing,moving company, furniture, and decorating
Also take into consideration that studies have shown that most homeowners invest approximately 5-20% of their new home value in remodeling to their needs, desires, and tastes within the first 6-12 months of moving.The other intangibles to consider are the neighborhood (going from a known setting to an unknown),children’s playmates and school, and the stress of the upheaval.
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