With the market lagging a little across the country people everywhere are considering whether they should stay in their own homes and renovate, or buy a new one. This seems like a simple choice but in reality there are a lot of questions to consider. The fundamental question is why are you thinking of moving?
Is Your Home Still Practical for You?
If you just had another child you may need to build an extra bedroom in order to stay in your current house. Perhaps your children are older and now as teenagers they need their own space meaning you have to consider a new home with a basement or develop your own. In most cases when the home is no longer practical for your needs and requires wholesale renovations it is financially prudent to do some cost effective cosmetic renno’s and sell the house. It’s almost always cheaper to buy a home that is configured for your needs already. That said, logic can often take a back seat to emotions when owners contemplate selling a home in which their family was born and raised.
Have You Simply Fallen Out of Love with Your Home?
In many cases the home still works functionally for the owners but they are considering moving anyway. This makes for a tougher dilemma as the renovations required to fix up a home that is a little dated can be cheaper and less hassle than a move. Factors such as market dynamics, the size of home you are likely to buy and the price you could expect to get for your own home all come into play. This is often where you need to seek the advice of a professional. There is no substitute for experience.
If you do decide to sell your current home, you normally cannot avoid all of the renovation costs. For example, if you have lived in a house 15 years and not painted the walls...you owe that house some money! People buying a home of that age expect to see updated decor and will cut their offering price substantially if they are going to have to paint it upon possession. It’s almost always more cost effective to do the work yourself. This investment will lead to a quicker sale and more money in your pocket. However, do not make the mistake of thinking you can get extra money for these types of renovation. The essential work that I refer to as the money you “owe” the house will ensure you get fair market value...not more! As the old wise guys say, “The market is what the market is.” You must also be aware of over renovating for a sale. Any elaborate renovations you do will at best only help the house sell faster, at worst they may not appeal to potential buyers.
If you do plan to stay and enjoy the “new look” home you can justify spending more than would be prudent than if you were preparing to sell. Look upon the expense as a chance to spend money on something you can enjoy every day for years to come as opposed to an all-out investment. Be mindful if you think you may sell within the next five years, you may again require some advice on the project from a real estate professional.
Your Real Estate Consultant Can Help
A good friend in the Real Estate business is not just there for you when you are buying or selling. When you need advice for insurance, tax or any other purposes you can always call. Never is this more true than if you are caught in the dilemma of “real estate or renovate.” I personally have an interior design consultant on my team and she is available for any of my clients to give some ideas on fix ups for sale or a renovation with your own enjoyment in mind. I also advise my clients on the pros and cons of all the possible scenarios. I won’t say I have seen everything. However, I am sure there are lots that I've seen that you may not have contemplated. So don’t be afraid to call your friend in the Real Estate business for advice. That’s what we are there for. In the final analysis, it is always exciting to get a new home regardless of whether it is at your same address, or a new one. So if you are caught in the "renovate or real estate" dilemma, the good news is whatever you decide will be awesome as long as you get good advice and make prudent informed decisions.