Sometimes it’s hard not to be tempted by the greener grass of a new home, especially if your home isn’t exactly how you want it to look or function. But the idea of putting your house on the market and leaving your beloved neighborhood behind breaks your heart. You’re at a real estate crossroads — something has to change, but is it better to buy a new house or renovate your current address?
New house benefits
A new house can be the answer to your current home’s woes. Perhaps you need more space for your growing family or less square footage now that the kids have flown the nest. Or, the location of your home isn’t the retreat you’ve dreamed of, and a house in a quieter neighborhood or with incredible views will better fulfill your wish list.
New house negatives
The cost of buying a home goes well beyond the listing price. Realtor and title fees, closing and moving costs and money you’ll have to shell out for repairs and renovations to your current home before you list it on the market can add up quickly, obliterating your budget.
“The cost of moving even a short distance can climb quickly — north of $10,000 — if you’re hiring full-service movers, and it can still reach above $1,000 for just a moving van rental. Especially if you’re expecting a modest net profit on your house, the additional cost to relocate may not be worth it,” according to U.S. News & World Report Real Estate editor Devon Thorsby.
Is the market favorable? Perhaps it’s a buyer’s market, which might impact how long it takes your home to sell. If you buy before you sell, can you realistically balance two mortgages?
Home improvement pros
Whether you’ve been in your house for a year or 20, you’ve made memories and attachments to your current home. If you remodel, you won’t have to leave your emotional connections behind or disrupt your day-to-day routine. A new house might not seem that great after all if it adds significant time to your daily commute or means your kids have to switch schools. A home improvement project you control means the results will be exactly what you want. Yes, you might like the master suite in a new house, but you can love the one you design yourself in your current home.
“You may want an open floor plan between the kitchen and family room to make it easier for the family to hang out, for example. Or, if you’re retired, your renovations may focus on updates that help you age in place so you can stay in your home longer,” writes Thorsby.
Home improvement cons
Over-improving your home can backfire if you price yourself out of your neighborhood. Although you might have the best house on the block, buyers down the road may not be willing to pay for the improvements, and you won’t see a return on your investment. Home improvement projects, whether big or small, can disrupt your daily life — you have to ask yourself if you’re willing to live in a construction zone.
Both buying and renovating will cost you time, money and emotional energy. Take a good look around at what you have and be honest about what you need to determine if you should stay or go.