Clients frequently ask me if they should remodel their existing home or buy a new one. In order to help them make this important decision I usually ask the following questions:
1- Have you explored the idea of remodeling or adding to your home?
Remodeling a home is usually less expensive than buying a new home. But local
zoning laws limit how much you can add to your property (based on lot
size), and remodeling can be aggravating and time-consuming. If your
lot isn’t large enough, or if you are not interested in remodeling, then
moving to a bigger home may be your best option.
2- Are you making more money? If you’re making more money, you may be able
to afford higher mortgage payments and the costs of moving to a larger home.
3-Do you have significant equity in your home? Usually, if you’ve owned your
home for five or more years, you may have significant unrealized gains. These
gains can help you finance a move to a larger home. Ask your agent
for an estimate of the fair market value of your home.
4-Are interest rates favorable? Interest rates are now at historic lows. Low
rates not only help you buy a larger home, but also make it easier to
find a buyer.
5- Do you still like your neighborhood? If you have switched jobs, had
children or experienced other changes in your life, your current neighborhood
may no longer adequately meet your needs.
6- Is the current housing market conducive to a move? In today’s market you
may be able to sell quickly and for top dollar, but finding the new home
could take longer because of low inventory and higher prices. Whenever feasible
I suggest that my clients find their new home and wait
to sell their old one until after they have moved in to the new home.
Every case is different. Discuss with your agent your specific
circumstances and options before making a final decision.