We see it all the time. Homeowners come to us needing more space for their growing family or desiring home features that their current home just doesn’t have. So the question is should they remodel or buy a new home? This is a tough question to answer because there are many things that need to be considered.
Interest rates have never been lower (not even in the 60’s). House prices have also dropped considerably. In some cases it may very well be better to buy a new home, but that is not always true. The cost to remodel vs. buy really depends on how much remodeling you would like to do. If you are on the fence, here are some things to consider:
1) First, do you have the money needed to remodel your home? If you do not have the money, can you get a small loan to pay for the work?
2) If you have the money, you will then need to find an architect and general contractor to do the work. Make sure you shop around to find a reputable firm. Also make sure that the contractor is licensed! If you start with an architect, they can usually give you an estimate of how much the remodel will cost before you hire a contractor.
3) Remodeling can take a while and can also be very messy, so you have to consider whether or not you are up for the challenge. Remember that it usually always takes longer than what they tell you due to delays in getting materials, etc. Projects are rarely completed on time and within budget, so you may also need to be prepared to spend more than what was originally quoted.
4) Once you understand the costs of a remodel, talk with a Realtor to see what the cost would be to buy a new home that has everything you want. Unless of course, you really want to stay in your home–then it doesn’t matter.
5) Consider cost of remodel vs. value. What it cost to remodel or improve, is not necessarily what you might get back in return if you sell your home. In fact, it is rare to get 100% return on your investment, so just keep this in mind when you decide how much money you want to spend on your remodel.
Whatever you decide, remember to be wise in the decision process. Consult as many professionals as you can. Visit with an architect, a real estate agent and loan officer. Now is definitely a great time for low interest rates and competitive contractor bids if you decide to remodel.
Posted by: Sheri Negri