“Remodel Our Existing Home, or Move To A New Home?”
Remodel? –OR– New?
“Do we stay and remodel our home, or move to a new home?” This question has come up many times in my career, and I’ve lived it personally. The answer is difficult, because it depends on individual circumstances. I’m going to share the same recommendation now as I have in the past: Make lists!
In 35 years as a professional designer, homeowners have asked so many interesting questions! I love to answer questions! In the coming weeks and months, I’ll share often-asked questions and some of the interesting “back stories” of the homeowners. The questions may be similar, but they require custom answers to fit individualized needs.
Are you a list person? I hope you are, because this is the best way to discover and uncover hidden truths. Get a lined pad and a pencil. The reason I prefer a pad with real paper is that it’s available, even in the middle of the night. You can write notes or add to your lists whenever you think of them.
Draw a vertical line down the middle of the first page – it doesn’t have to be perfect! If you are compelled to use a ruler, it’s okay. At the top of the page, on the left, write “Reasons to Stay,” what you love about your home and neighborhood. On the right-hand side, write “Reasons to move,” what you hate about your home and neighborhood. Don’t edit or over-think your list. No one is going to grade you on your exercise.
There are things you can do to stay in your home, but they’re not going to be inexpensive, especially if your existing home is too small or needs major renovations. But neither is selling your home and moving to a new home! Answering the question about staying or moving is going to require homework. There’s more homework involved in thinking about your project than you imagined. But I don’t want you to get overwhelmed. Just take it a step at a time – that’s the only way to get from here to there. Give yourself time to think about your list and create it. Include everyone in the immediate family who has a stake in the outcome.
After you’ve got your lists of reasons, you’ll need to gather information to help you make an informed decision. Having information will give you peace of mind – I guarantee it! After your initial list, the next several pages of your notepad will be dedicated to gathering financial information about your existing home. Get ready to create another list!
What do you need to do to your home – deferred maintenance?
- Roof repair or replacement?
- Exterior painting?
- Interior painting?
- Plumbing leaks?
- HVAC repair or replacement?
What do you want to do to your home to make it more liveable? This list is going to be easy, because I’ve done the work for you! You can get a free copy of the new and improved Homeowner Surveys that I originally created for my book, “THE Survival Guide: Home Remodeling.” The Homeowner Survey is a total of 27 pages and may take several days to complete. Once you have completed the Homeowner Survey , you can get a preliminary guesstimate from contractors about the range of your investment for what you want to do. If you want more than a guesstimate, here’s what you should do:
- Hire a professional designer to create as-built and proposed plans of your home. More details = higher fee. The fee could be as low as $2,500 or more than $6,000. We’ll talk about professional designers’ fees in another segment of “Today’s Home.”
- Pay a contractor for an estimate, based on your homeowner survey and the plans.
Homework Required: Buying A New Home
You’ll now have the first half of your question answered, how much you will need to invest to get what you need and want, to stay in your existing home. The rest is relatively simple math. Here are the logical steps to help you arrive at a complete picture for your investment in a new home. Answer these questions:
- What is your existing home worth, as is?
- What’s the balance of your mortgage?
- How many years before you own your home?
- What do you pay monthly for your mortgage, taxes and insurance?
- How much have you spent on fixing and repairing “deferred maintenance” in the past year or two? You can use the previous list about deferred maintenance that you created. If you haven’t spent anything on deferred maintenance, contact the contractor who did the estimate for home remodeling and get estimates for the necessary work.
Lists Complete! What’s Next?
Next, contact a trustworthy real estate agent or look online for comparables from recently-sold homes in your area that will help you answer these questions:
- What can you reasonably get for your home as is or with minimum repairs?
- How much will it cost to sell your home? Here’s what to include:
- Capital gains or losses
- Real estate fees
- Closing costs
- Moving costs
- Contingencies and unforeseen emergencies
Now you’re ready to gather information about a new home. You can use the same Homeowner Survey to help you find a new home that fulfills your needs and wants. It’s great that there is so much information available online to help you define and decide where you want to move to, and how much you want to pay for a new home. In the greater Portland, Oregon area, I like the John L. Scott website that’s easy to navigate, but you may have a favorite.
Here’s a hint that will help you save information: In the past, what I’ve done to save information is to copy the url of a site and email it to myself with the same subject (i.e., “new home information,” etc.). Most of the real estate sales sites have information about your mortgage payment as it relates to your down payment. There may or may not be information about property taxes and insurance, but you can calculate that using your current mortgage based on the percentages. Write down your estimate for the monthly mortgage, taxes and insurance, then make comparisons:
- What’s the difference between your new monthly payment and what you’re currently paying? Will your income support the move?
- What’s the difference between remodeling your existing home and moving to a new home?
Next, weigh other factors, such as:
- School location and reputation for quality education
- Proximity to shopping, places of worship, parks and recreation, and public transportation
- Your existing neighborhood compared to new neighborhoods
Make Your Decision: Remodel Your Existing Home, or Buy A New Home
After you’ve completed this exercise, you are armed with written information that will help you decide whether you should stay and remodel your existing home or move to a new home. It’s a big decision! The great thing about all of this documentation is that it prevents you from getting confused! Selling and buying homes, and home remodeling, is filled with emotions you never knew you had.
To avoid confusion and unwanted emotions, try your best to maintain a level-headed, logical approach. Don’t let anyone whip you into a frenzy of emotions to get you to do something that isn’t in your best long-term interest. This is the advice of a homeowner advocate with 35 years of experience. I’ve had four clients who decided to stay and remodel, and three who decided to move to a new home. My husband and I have done both: Stayed and remodeled, and moved to a new home. We know all about the emotional roller coaster ride to make an informed decision!
Bottom line: Whatever decision you make, your goal is to improve your life. I’m here to help you!