The majority of Americans agree that moving is one of the most stressful life events you can go through. Uprooting your life to move across town or to another city is a highly trying ordeal. However, if you are a homeowner looking for a change, there is always the option of simply remodeling your home rather than moving. While making this decision, there are many factors to consider, from your financial stability to the current real estate market. 

When given the choice, 76% of Americans would choose to remodel their current home rather than move. However,  before you decide whether to renovate or move, take a minute to decide if it is the best decision for you and your family. 

How Much Does it Cost?

Upgrade Costs

According to Home Advisor, the average U.S. home renovation costs $46,788. The typical range is between $18,372 – $77,016. Before you start renovating, you should get multiple quotes and bids while carefully doing your research:

  • Permits can range from $60 – $500. Every community is different; however, you will likely need permits for projects such as window installation, plumbing work, structural changes, fencing installation, and electrical work.

  • Labor: $20 – $150 per hour. However, if you have the time, you could always DIY.

  • Materials and material costs vary. Due to current supply change shortages, materials are hard to come by, and costs are very high.

  • Experts recommend adding an extra 20% onto your initial budget to account for any unforeseen problems that could arise. 

Popular Remodeling Projects Costs

The following statistics come from data collected by Home Advisor:

  • Cost to remodel a kitchen: $4,000 – $60,000.

  • Cost to remodel a bathroom: $4,000 – $55,000.

  • Cost to remodel a basement: $11,000 – $30,000.

  • Cost to build a home addition: $21,000 – $70,000 on average but can reach $125,000. 

Proceed with Caution

Not all types of remodeling projects will add value to your home. Try not to be too trendy as trends tend to fall in and out of style, affecting your property value. Higher property taxes could also be an issue, depending on your assessor.

Moving Costs

Sometimes you simply need a fresh start and upgrading your home simply will not cut it. If this is the case then updating your home entirely might be the solution. Moving to a new home could be exactly what you and your family need!

You will likely have to sell your current home in order to buy a new one. Several costs go along with selling a home that you will have to keep in mind. In general, it costs around 15% of a home’s sale price to sell it. Several potential costs go along with selling your home. These include but are not limited to:

Cost of Selling

  • Agent commission, 5% of the sale price.

  • Home preparations and minor repairs $500-$5,000.

  • Potential Major Repairs, $20,000 - $50,000. Some homes may not need this, but many older homes require significant work to meet housing and safety codes before they can be sold.

  • Title Insurance, $2,000 - $4,000.

If your home value has risen significantly from your purchase price, you may have to pay an additional capital gains tax. If the property value has not risen by more than $250,000 you could be eligible for an exemption from this tax.

Cost of Buying

  • Remodeling expenses for home buyers cost on average $8,000.

  • Closing costs vary between 3%-6% of the mortgage.

  • Home appraisals and title insurance range from $500 - $2,000.

  • Holding two overlapping mortgages can cost around $0 - $3,000, depends on how long the overlap lasts.

Let’s say your home sells for $200,000. Assuming average costs, you would expect to spend about $30,000 to repair and sell your house and about $15,000 to close on a new home, move in, and furnish it to your taste. That’s a little under $45,000 of nonnegotiable expenses altogether. 

Despite all these expenses, upgrading your home might still be worth it. It can be expensive, but the improvements in your quality of life could be enormous. 

Pros and Cons

Upgrading Pros and Cons

Pros:

  • You can custom tailor your home to fit your needs. Whether it’s something like adding a home workshop or adding an extra bedroom, you can design everything to your liking. 

  • With upgrading, you can upgrade your standards of living without having to uproot your entire life. This is especially beneficial with commuting to work and not having to change school districts for your children.

Cons:

  • Living in an active renovation can be tiresome. Every project is different and, depending on if you decide to do it yourself or outsource the job to a contractor, it can take a while. This can especially be a hassle with kids and pets. 

Moving Pros and Cons

Pros:

  • Sometimes adding on isn’t enough. Buying a new home might help if you wish to expand. Additionally, a new floor plan might work better for you and your family.

  • A new environment could give you the means to build a new life. If you want a fresh start, then this might be a great option.

Cons:

  • You will likely have to move neighborhoods to find the home that best fits your family. This could dramatically mix up your family’s lifestyles, from changing school districts to having a longer commute to work. Additionally, leaving behind the memories in your current home is always challenging.

Conclusion

The decision to upgrade or update can be challenging for a family to make, and they both have their own set of benefits and drawbacks. Whether you decide to remodel or move, here at ALLIANCE, we are here to assist you through every step of the process. Visit our Home Loans office at 8401 Quaker Avenue or online at https://alliancecutx.com/Borrow/Loans/Home-Loans to learn more!