Should I Remodel or Move? How to Decide

When you reach a point as a homeowner where your current home no longer meets your needs, you are faced with the decision of whether to sell and buy a new home or remodel your existing one. Each option has its own set of pros and cons, including varying costs and time commitments.

In this Redfin article, we will guide you through the factors to consider before making the choice between remodeling or moving, whether you reside in Dallas, TX, or Milwaukee, WI.

Key takeaways

Consider remodeling if you have a strong attachment to your home or neighborhood and prefer not to relocate.

Consider moving if you desire specific features, a new neighborhood, or a move-in ready home.

Ultimately, the decision between remodeling and moving depends on your budget and personal objectives.

5 factors to consider before deciding

Cost of moving vs remodeling: The costs associated with moving versus remodeling play a significant role in making your decision. Remodeling expenses are influenced by your plans, home age, and hired contractors, while moving costs are affected by local housing prices and mortgage rates.

Adam Johnston of UB Kitchens emphasizes the importance of initial budget estimates and setting clear priorities to ensure successful projects.

Housing market: The state of your local housing market can impact your decision. A limited inventory or high competition may favor remodeling, while a buyer’s market with more options and lower prices may lean towards moving.

Location: Your home’s location is a fixed aspect that can influence your choice. If you are fond of your current area and few homes are available for sale, remodeling might be suitable. Conversely, if you are open to a new neighborhood, moving could be preferable.

Attachment to your home: Consider your emotional connection to your home. Strong ties may make remodeling more appealing, while a desire for a fresh start may make moving the better option.

Timing: Assess your timeline and requirements. Immediate space needs, such as a growing family, may necessitate a move, while the ability to endure disruptions and wait for renovations may make remodeling a viable solution.

Is it cheaper to renovate or move?

To determine the cost-effectiveness of remodeling versus moving, it is essential to estimate the expenses associated with each scenario.

Costs of remodeling

Materials and labor: The primary costs are attributed to materials and labor. Factors such as material type, project scope, and required professionals influence remodeling costs. It is crucial to account for labor, materials, design, permits, and contingencies.

Permitting: Depending on the remodel’s extent, obtaining permits may be necessary, adding to the overall cost and duration of the project.

Potential financing costs: If financing is needed through home equity or refinancing, additional expenses such as interest and closing costs should be considered to avoid underestimating total project costs.

Exceeding your budget: There is a risk of surpassing your budget during remodeling, especially with high-cost items and unexpected expenses. Planning for contingencies and detailed pre-construction preparation can help manage costs effectively.

Costs of selling

Agent commissions: Real estate commissions are negotiable but typically range from 1.5% to 6%.

Pre-listing home repairs: Expenses may include repairs, painting, and landscaping to enhance the property’s appeal.

Costs of a new home: From down payments to closing costs, various expenses need to be considered when purchasing a new home.

Costs to move: Moving costs can vary, with an average cost of around $1,500 and higher for long-distance relocations.

Pros and cons of remodeling your home

Pros of remodeling

Renovating may be less expensive: Despite the costs involved, remodeling could be more affordable than selling your home when factoring in selling expenses, taxes, and closing costs.

Flexibility and customization: Remodeling grants you the freedom to select projects within your budget and personalize your home, which might not be easily achievable in the market.

You don’t have to move: Staying in your current neighborhood without the hassle of relocating is a significant advantage of remodeling.

Renovating may be faster than moving: Finding a new home and selling your current one can be time-consuming, making remodeling a quicker solution in some cases.

Cons of remodeling

Living through construction: Enduring the disruptions and inconveniences of living amidst construction can be challenging.

May not receive full return on investment: Not all renovations add significant value to your home, which may impact resale value.

Possible home insurance increases: Certain renovations can lead to higher insurance premiums, especially for projects like adding square footage or major kitchen upgrades.

Costs can increase mid-project: Unforeseen expenses, material price fluctuations, and delays can escalate the final remodeling costs beyond the initial estimate.

“It’s essential to have a contingency reserve of 10-30% to account for surprises during a remodel,” advises Ken Semler, president and CEO of Impresa Modular. Planning and understanding the project scope can help keep the remodeling on track and within budget.

Pros and cons of moving to a new home

Pros of moving

New location and features: Moving allows you to explore new areas and find a home with desired features that may not be achievable through remodeling.

You can buy a turnkey home: Purchasing a move-in ready home eliminates the need for ongoing renovations and immediate occupancy.

Predictable budget: Moving enables you to stick to a predetermined budget without the risk of exceeding it during the renovation process.

Cons of moving

Buying and selling at the same time: Coordinating the sale of your current home and purchase of a new one simultaneously can be complex and lead to financial challenges.

Moving costs: In addition to buying and selling expenses, moving costs should be factored in when planning a relocation.

You may not find what you need: Limited options in the housing market may restrict your ability to find a home that meets all your requirements.

Potentially higher mortgage rates: Fluctuating mortgage rates could lead to increased monthly payments, impacting your financial stability.