Move vs Improve
If you are frustrated with the current state of your home, then you are likely thinking about making a change. To move or improve, that is the question–and the decision it presents is difficult. After all, renovations are a significant investment. Starting fresh elsewhere may seem like an appealing and economical alternative. But before you start looking at putting your home on the market, take some time to educate yourself about the tangible and intangible costs of relocation.
Calculating the Costs of Selling Your Home
Curb Appeal Improvements
Even in a seller’s market, buyers can still be picky. To sell your home quickly, and at your asking price, your home needs to photograph and show well. Ask any Realtor, and they will advise you that there are basic improvements to the interior and exterior which will need to be completed prior to placing your home on the market. These improvements are likely to include new interior paint, flooring, appliances, as well as curb appeal improvements to your exterior including mulch, landscaping, new shutters and more.
Cost? Budget $15,000 to $20,000 on these basic renovations.
Closing Costs
When you are the seller, you pay the Realtor’s commission out of the sale price of your home. The cost of this commission is typically 6%, however there is a 1% transfer tax that also has to be paid, as well as an assortment of other fees, plus the additional funds that need to be put in escrow for taxes on your new home.
Cost? The estimated closing costs for a $400,000 home are around $30,000.
Moving Costs
To pack and move your home will be time consuming, and involve a great deal of heavy lifting. You can save time (and your back) by hiring someone to handle the packing and moving for you, but that will add to your out of pocket expense.
Cost? Budget $6,000 to $7,000 to hire a company to pack and move your belongings.
Purchase Price of New Home
The biggest expense associated with moving will obviously be the purchase price of your new home. If you are buying in a seller’s market, it generally means you are unlikely to get a bargain on the price—especially for a home that has been renovated to include the amenities you felt were lacking in your current home. Unless, of course, you are purchasing a ‘fixer upper’. And if that is the case, might we suggest that you focus on fixing-up the home you’re currently living in and save a few dollars?
On the other hand, purchasing a home that has already been renovated means you will typically pay less for the renovation services than the original homeowner did and you will be able to finance those costs over the life of the mortgage. That said, there are likely to be things you will want to change and you will need to budget the funds for those upgrades, as well.
Cost? Variable.
Location, Location, Location
When determining whether or not to relocate, homeowners should evaluate their current neighborhood for its relative strengths and weaknesses. Start by asking yourself these questions:
- Do you like your neighbors?
- Do you like your proximity to amenities such as grocery stores, retail, banking, restaurants, schools, houses of worship, parks, and other sources of entertainment?
- Do you have access to conveniences like public sewer?
- Does your municipality offer public safety services like police, fire, and emergency medical?
Realtors often emphasize location as a major benefit of a particular property. If you answered “yes” to more than one of the questions above, then your current residence offers many benefits which may be difficult to replicate—and very costly to change again once you have moved.
Cost? Intangible.
Will You Move or Improve?
Ah, decisions, decisions. Yet only you can determine whether it would be more advantageous to stay and improve your home, or if relocating to start fresh elsewhere is the better option. Hopefully this article provided the insight to help you make an educated decision. Whether you decide to move or improve, the team at Custom Craft would be delighted to help you make either home a better, more satisfying place to live.
Looking to improve your home? Contact Custom Craft at 610-584-0665.
