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Remodel or Move? How to Make the Best Decision for Your Home

Remodeling your home can be a big undertaking. Depending on the size and cost of the job, it might make more sense to put your home on the market and relocate instead. Your budget is an important factor when deciding whether to renovate or move. Your home’s design and functionality also play a role. Making some upgrades could improve your quality of life—and potentially increase your home value—but it can’t fix everything. Consider the following if you’re torn between remodeling and moving.

1. Evaluate What You Want to Change

What changes would make you want to stay in your home? Whether it’s putting down new flooring or adding another room, get clear on what those renovations would look like. This can help you evaluate the scope of the project, which will shape your budget.

According to a National Association of Realtors (NAR) report, 84% of homeowners have a greater desire to be in their home after remodeling. That could play into your decision if you plan on staying in your home long term. For example, putting in a pool could be something your family enjoys for years to come.

2. Research Remodeling Prices

Remodeling prices vary widely depending on the project. According to data from HomeAdvisor, the national average cost of a kitchen remodel is $25,300. Bathrooms run around $10,600. And while you may feel comfortable tackling small tasks on your own, larger or more complicated renovations usually require professional help. To find the right contractor, asking for recommendations from friends, family and neighbors is a good place to start. You can also read online reviews to see which pros have the best ratings. From there, you can gather estimates and shop around.

You can begin building your savings before you get started, or opt for a home improvement loan. Here are some ways to plan for home improvement expenses:

• Make a budget.
• Compare contractors and bids.
• Delay your project until the off-season.
• Do some of the work yourself.
• Look for deals on materials.

3. Consider Market Conditions

Your local real estate market may help you decide whether to renovate or move. Inventory, home prices and mortgage rates are constantly changing. If it’s a seller’s market, you might easily attract buyers but struggle to find your next home. Connect with a local real estate agent who’s familiar with your area to get a feel for current home prices and inventory. High interest rates can also increase the cost of a new mortgage.

If you decide to stay in your home, some renovations could increase your home value. That could fetch you more money when you eventually sell. The following home improvements are thought to add the most value:

• Kitchen upgrades
• Refinishing or installing hardwood flooring
• Upgrading your insulation
• Converting a basement or attic into a living area
• Putting in new siding
• Replacing your roof
• Updating your garage door
• Installing vinyl windows

4. Factor in Your Location

Renovations might not be worth it if you’re unhappy with the location of your home. A different neighborhood may feel like a better fit—or open the door for lower property taxes or better schools. Similarly, you might be more willing to remodel if it means staying in an area you love (assuming it’s in line with your budget). Think about what matters to you most in a home, then factor that into your decision to remodel or move.

5. Think About the Costs of Selling

Selling a home has its costs. That typically includes:

• Updating your home: Making minor updates can help attract buyers. That might mean sprucing up your landscaping or installing a new garage door. You’ll also want to make functional repairs, like fixing a leaky roof.
• Home staging: Some sellers work with professional home staging companies to declutter and swap in new furniture and decor. According to NAR, most home stagers charge $300 to $600 for an initial consultation, then $500 to $600 per month for every staged room.
• Realtor fees: Listing agents generally take a 6% commission from the final home price. If you sell your home for $340,000, you could lose over $20,000 to fees.
• Closing costs: If you buy a new home, you can expect to pay 2% to 5% in closing costs. These fees are generally paid upfront when the sale is finalized.

6. Weigh the Inconveniences of Remodeling

Remodeling may disrupt your home life and be stressful in the short term. You might have to deal with the sights and sounds of construction—and parts of your house may be unlivable. Unexpected costs can also pop up along the way, which could make it harder to save for other financial goals. Make sure you’re ready to make the commitment before embarking on a renovation project.

The Bottom Line

If you’re trying to decide whether to renovate or move, know that each option has its pros and cons—and unique costs. Your budget, housing goals and local market conditions can help point you in the right direction.

If you end up moving, your credit will play an important role in getting a new home loan. You can check your credit report and credit score for free with Experian.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team of experts is ready to help you navigate your options and find the best solution for your situation.

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