It’s difficult to find the perfect home, one with just the right amount of storage, the ideal layout and all the room your family needs. Most homeowners have at least one thing they’d change about their home. If that something is within the four walls of the home, a renovation may solve the problem. However, if it’s a matter of location, the size of the yard or the length of your daily commute that has you feeling discontented with your home, selling might be your best bet.
If you’re weighing your options between a home renovation project and selling, here are some things to consider:
Real Estate in Your Area
If there are for sale signs in every other yard on your block and neighbors seem to be making a mass exodus, you may find it difficult to sell — or at least to get asking price for your home. An over-saturated market tends to drop home prices and make it more difficult to sell quickly. On the other hand, if the market is competitive for buyers, meaning there are more buyers seeking homes in your area than there are homes available, now just may be the perfect time to sell.
Issues with Your Home
Is it the clutter and lack of storage space or a serious problem like a cracked foundation or a roof that needs to be replaced? Maybe your family is growing, and you no longer have enough bedrooms or bathrooms to allow your family to live comfortably. Some points of discontentment may be easily and affordably resolved with a renovation. Consulting with a designer and/or a home organization expert may help you get to the bottom of the clutter and find creative ways to add more storage to your home. Even a larger problem, such as foundation woes or a leaky roof may be covered by your home warranty or homeowners insurance. Identify the biggest problems in your current home and seek out professionals who can give you an expert opinion on how simple and affordable (or not) the remedy can be.
Owning Your Home
Most experts recommend staying in a home a minimum of three to five years before selling in order to break even. If you’re hoping to make a profit off the sale of your home, you’ll likely need more equity than you can accrue in just a few years. Three to five years allows time for property values to improve and gives you time to build enough equity to cover some of the expenses of selling, such as closing costs and moving expenses.
Renovation Considerations
Not only can it be time-consuming, but depending on the scope of the project, you may need to find temporary living arrangements while your home is under construction. The realities of renovations aren’t always considered into the decision. In addition, renovations can be costly — often costlier than originally estimated. To ensure you have enough to cover the project, boost your budget by 20% of the estimated cost to make room for unexpected expenses.
Outgrowing Your Space
If you’re feeling cramped in your space and splitting one bedroom into two or knocking down or extending the walls of your common areas just isn’t an option, then selling and buying a larger home is probably your best bet. Meeting with a contractor can help you determine if expanding your existing home is an option and a wise investment.
Whether you decide on a home renovation or are ready to start the hunt for a new home, PrimeLending has home loan options to fit your needs. Check out our guide to financing a home renovation to learn about the loan options available for remodeling and renovations. Contact us today to speak with a PrimeLending home loan expert in your area.
