You bought your home five years ago; also known as “two-less-kids-and-one-less-dog-ago”. Back then, the three bedrooms and 1.5 baths seemed adequate. Now? You’re questioning whether or not it will continue to work. Should you remodel your current home or just purchase another?
Here are a few things to consider —
1. Cost per square foot: Figuring the cost per square foot of a remodel is an imperfect exercise at best, since it doesn’t account for variations in floor plans and materials. Does it end up costing more to stay in your current, smaller house? Even doing a rough estimate should give you an idea.
2. Transaction and moving costs: You need to compare the costs of refinancing — and perhaps renting a place to stay while the remodeling takes place — versus the costs of buying and moving. An online calculator can help you compare these expenses. The one at this link also allows you to get an estimate on the project cost per room.
You should keep in mind that the costs for purchasing a new home and moving don’t usually sway (ex – a lawyer’s fee stays consistent, broker’s fee stays consistent, truck rental cost stays consistent, etc.) where the costs of remodeling can swell. You can have a delay in materials being delivered or come across unexpected problems, such as mold or leaky pipes.
3. Age and obsolescence: The age of a home should be taken into account when considering remodeling, as the age will make a difference in the eyes of future buyers. If your current home is 10 years old and the home you’re considering buying is 15 years old, there isn’t much of a qualitative difference between the two.
But if your home is 30 years old, even if you put on an addition, it won’t be as competitive as a home that’s younger. The newer home will have less wear and tear in general and will be more appealing to a buyer.
4. The economy: You may get bargain rates from re-modelers trying to keep their businesses in the black during a tough economy. But as home prices continue to fall, many people are seeing their home-equity lines of credit shrink or get cut off — so don’t expect them to be reliable sources of money for a renovation. What’s more, most of the measures the government is currently considering to stimulate housing, including mortgage rate buy-downs and tax credits, are targeted towards people who are purchasing homes, not those who are refinancing or remodeling.
The bottom line: If you remodel your house instead of moving, you’ll be able to get exactly what you want and will have total control over the final result. But if the cost-benefit just isn’t there, it’s better to just list and move on.
You can find out what your Capital Region home is worth by visiting http://www.albanyhomes411.com/home-valuation/