Should I stay or should I go? The answer to that question has two important components: financial and lifestyle. The financial picture revolves around the cost of proposed renovations and the current market value of your home. The lifestyle picture takes into consideration the quality of life you enjoy in your current home: the neighborhood, your neighbors, quality of schools, daily commute, parks, and recreation.
When you add up the numbers you may likely find greater equity by staying in your current home and renovating. But you and your family might need a fresh start, and the costs involved in selling your home and buying a new home will be in your best interest.
Here are some financial and lifestyle items to consider when deciding to renovate & stay or sell & go.
Costs of Selling Home: There are a number of costs involved in selling your home. You will want to do the math and add everything up. The cost of selling a home is around 15% of the selling price. The costs include broker commission, major repairs, minor repairs, and title insurance.
Costs of Buying New Home: You will want to factor in 2%-6% of the new mortgage for closing, title insurance, and remodeling costs (renovations you might be considering for the new home). There is also the cost of the move to factor in. The average cost for a local move in 2022 is $1,400 while a long distance move can range from $2,200 to $5,700. If you are purchasing a more valuable house in a community with higher property taxes you will want to consider the interest payments and property tax payments you will be making and include them in the financial picture.
Costs of Renovating Current Home: A home addition costs on average $21,000-$70,000. The average renovation costs around $46,000. Remember to consider higher property taxes when renovating (assessors will alter your property value) and utility usage. Bathrooms, kitchens, and finishing basements are popular remodeling projects and don’t generally cost as much as a home addition, but they are still expensive. If you want to make renovations and stay in your home be aware of the total costs including an updated tax assessment and plan accordingly. If you are considering renovations to add value to your home before selling be sure to talk with your seller’s agent to determine how much a proposed renovation will increase the selling price of your home.
Pros of Renovating - Maintaining Lifestyle: If you stay in your home and renovate, your lifestyle will stay the same. Your children won’t have to navigate the culture and curriculum of a new school, you will have the same daily commute to work, you already know your neighbors, and you can enjoy your regular round at the local golf club (and maintain bragging rights after winning last year's charity tournament!). You can customize the features in a bathroom or kitchen renovation as you see fit. You will know what you want and what is missing.
Pros of Selling - New Lifestyle: If you are ready for a change in your lifestyle it might be time to sell. Your children can look forward to a new culture and curriculum in a different school district. You will have new neighbors to meet, new friends to make, a new route to drive to work and a new local golf course to enjoy on Saturday morning (and a new annual tournament to win). If you and your family need a fresh start, moving into a new home and neighborhood is sometimes the best option.