Remodel Or Move: Two Paths To Your Dream House
Hanna Kielar7-Minute Read
March 26, 2021
I’m currently living through week six of our home renovation and it has me seriously wondering: would it have been better to just move rather than remodel?
When we dove headfirst into a complete overhaul of our home, I was confident we’d made the right choice. Our location is great, we like our neighbors, and we’d get to choose exactly what we want for every detail in the house. But now, after living through a construction zone, I’m not so sure.
If you’re considering big changes to your home, you too might be wondering if all the construction and inconvenience of remodeling worth it, or would it be better to find a new place that already suits your needs as-is? Here’s how to determine whether you should remodel or move.
Should You Remodel Or Move?
Deciding whether it’s better to move or remodel is something that requires a lot of thought. There’s no one right answer for everyone. When deciding whether you should stay or go, you’ll want to take an honest look at your situation and goals.
- Do you love where you live?
- Are you ready to tackle and manage a long project?
- Are you trying to save money?
Once you know your goals, it’s easier to figure out if it’s a better idea for you to move or remodel your home.
Pros Of Moving
Let’s take a look at some of the potential advantages of moving to a new house rather than taking on a big overhaul of your current one.
Don’t Have To Live Through Construction
Remodeling your current home means not being able to have full use of parts of your home for as long as it takes to complete the project.
If you’ve never lived through construction, let me warn you now: it’s tough. There’s dust everywhere and if you’re tackling a big project, you’ll likely be without your kitchen or bathroom (or both!) for an extended period of time. Trying to cook meals on a hotplate in the corner of a room gets old quickly. And because remodels can take anywhere from a few weeks to several months, you may find yourself doing this for longer than is comfortable.
Remodeling Won’t Solve All Your Problems
If you wish your home was in a better neighborhood, had a bigger yard, or was in a better school district, remodeling can’t fix that. When you move, you get the chance to start fresh. Pick a new neighborhood, move to a great school district, or find a home with your dream yard.
Also, your home just might not be the best option for a remodel.
You Can Buy A Turn-Key Home
If you’re not someone who loves the thrill of a new home improvement project, moving and finding a turn-key home is probably a better option. You can move in and not have to worry about spending your weekends at home improvement stores.
Won’t Need To Manage A Renovation Budget
While home improvement shows may make it look easy to stay on (or close to) a renovation budget, the truth is you may very well end up spending more than you expect. One Houzz survey found that 31% of home renovations exceed their budget, while another 31% don’t set a budget. Depending on the length of renovation and the complexity involved, managing your renovation budget can be a time-consuming activity.
Pros Of Remodeling
Selling a home and moving into a new one is also a big undertaking – not to mention an emotional one. Let’s take a look at why remodeling or renovating your current home might make more sense than moving.
Moving And Home Buying Is Expensive
While there’s no doubt that remodeling a house is expensive, we often forget the costs that come with selling our old home, buying a new one, and moving. And these can be big costs. Aside from prepping your home for selling, you have to pay real estate agent commissions, sales and transfer taxes, closing costs on the home you buy, and you have to pay to move from one place to another.
Real estate agent commission alone is typically equal to 6% of the purchase price. If you sell your home for $250,000, that’s $15,000.
You Can Customize Everything
When you remodel your home, you have control over the design. You get to choose all of the finishes, decide where things should go, and pick every color. These decisions may overwhelm some people, but if you want to choose everything in your home, remodeling gives you that creative control.
You Don’t Have To Leave An Area That You Love
Love your neighbors, your school, and your street? When you choose to remodel you get to stay and enjoy these highlights. Moving does give you an opportunity to start over, but if you already love where you live, why leave?
You Could Have A Long Move Timeline
Depending on where you live, finding your new home might be a time-consuming endeavor. In hot markets where homes go quickly, you could spend months finding just the right property. The average home buyer spends 10 weeks looking for a home in the San Francisco Bay Area. Compare that with homeowners spending an average of 6 weeks on a kitchen remodel.
Is It Cheaper To Renovate Or Buy New?
The best way to figure out whether it would be more cost-effective to move or remodel is to get an estimate of what both scenarios would cost and determine if there’s a big difference.
Cost To Sell The Old And Buy New
Agent commissions: You’ll have to pay the people selling your home, and that can get expensive. Plan to spend 6% of the sales price on agent commission – 3% for both agents.
Home repairs: What do you need to spend to get your home sales-ready? That might include painting, landscaping, and any repairs you’ve been putting off. If your home has serious issues that need to be addressed, this could cost quite a bit of money, depending on the type of repair.
Costs of a new home: How much will your new home cost? Don’t forget to factor in closing costs, which are typically 3% – 6% of the purchase price.
Costs to move: How much is it going to cost to pack up your home and move everything you own to a new one? Hiring movers costs around $1,400 on average, according to HomeAdvisor. If you’re moving a long distance, it’ll cost more.
Updates to make before moving in: Even if you buy a home that is mostly move-in ready, you still might want to make small changes like getting it repainted, which will add to the total cost.
Cost To Remodel
Materials and labor: The largest chunk of the cost of your remodel is going to be buying the new materials and paying someone to do the work. Databases can provide average costs, but getting a few quotes from professionals can help you with a better estimate.
If you plan on remodeling your kitchen, for example, the average cost to do so is around $25,000, most of which will be spent on materials and labor. This means that the type of materials you use will largely determine your costs; high-end materials can very quickly increase your costs.
Permitting: Depending on the extent of your remodel, you may be required to get a permit, which can add to your total cost (and time). On average, building permits cost $1,200, according to HomeAdvisor.
Cost of financing: If you’re planning to borrow to finance your remodel, don’t forget to add in those costs, such as closing costs and interest over the life of the loan. Be sure to factor these costs into your calculation – how much you’ll spend exactly will depend on the type of loan you get (common options include personal loans, home equity loans or cash-out refinances), the amount you borrow and what interest rate you get.
Overage: Remember 31% of people remodeling go over budget. Build a little cushion into your budget from the beginning.
Should You Remodel Your Home Before Selling?
If you’ve weighed the pros and cons and decided that selling your home and moving is the better option for you, you may wonder if it’s worth it to remodel it before you sell. Should you finally upgrade that kitchen in the hopes that a prospective buyer will pay more?
Keep in mind that home improvement projects typically don’t provide a 100% return on investment, so you probably won’t see the cost of your remodel completely reflected in your sale price.
However, if there are things you can do to make your home more competitive and attractive to buyers, making those changes could be worth it.
You’ll want to dig deeper into the specifics for your area and home before you make the final decision about whether you should remodel before you sell.
The Bottom Line: Let Your Goals Be Your Guide
Deciding whether to remodel or buy a new home is a personal decision that can be difficult to make. Give yourself enough time to do the right research to come up with the option that works best for you.
When you take an honest look at what’s involved in the remodeling process, you might decide you’d rather avoid all the trouble and just start shopping for a new home – especially if your current home would need extensive work to meet all your needs. On the other hand, if you’re more of a “home is where the heart is” person who can’t imagine parting with your place, the work and inconvenience involved with a remodel might be worth it.
Want to hear more about renovating and remodeling? Check out this couple’s account of their experience with a fixer-upper.
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