During an initial site visit with potential clients to review a second story addition that included a master suite with master bath, and a first floor kitchen redesign, a concern was expressed by one of the homeowners. It went similar to this, “After remodeling, if we are going to be into the house for this much money, perhaps we should consider moving to a larger property.” I got the subtle sense that the underlying concern was not to over improve for the neighborhood. So we left the couple pondering their decision; they would get back to us later.
A few weeks went by when the clients called and asked to visit a current remodeling project. After the tour, we discussed their dilemma, to remodel or to simply move. First we discussed remodeling. It would keep them close to friends and neighbors they have come to enjoy, and remain in a neighborhood that is convenient to their lifestyle and children’s school.
Next, we discussed the hassle of moving, packing and unpacking; cleaning and painting; new schools and registration; changing your mailing address with the post office, voter registration, credit card companies, driver’s license bureau, friends and family, and so forth; in addition to changing all your utilities.
Additionally, we discussed expenses associated with moving. Several things would need to be repaired around the house before listing it with a local real estate agent; perhaps about $5-6,000 for minor repairs. Then moving expenses, another $2,500; followed by real estate fees, mortgage fees and closing costs, approximately 6-7% of the sales price, in this case about $45K. Of course the new house would likely require some painting, window coverings, a bit of furniture here and there, add another $10,000; quickly the couple saw an outlay associated with moving of over $63,500.
That’s over $50K to do nothing more than move from one house to another. Sure it’s a new house, but the likelihood that it’s “turnkey” or in perfect condition and not in need of some remodeling or repairs or are slim.
The original remodeling budget for the addition and redesign was $150K, which is reasonable for their goals, but add the expenses associated with moving; well that takes it to another level. Now they could redo the both first floor bathrooms, replace the existing worn out windows and doors with energy efficient designs, refinish the hardwood floors and paint the entire house.
Transforming their existing home into what they had always dreamed was a better investment, financially and emotionally, than moving into a new home that would likely require modifications.