One of the most common calls we receive from our clients is when they feel like they are outgrowing their home and are weighing their options for a renovation versus selling their house and buying a new house. There is a popular HGTV show that dramatically oversimplifies this process called “Love it or List it” that makes it all look easier than it really is.
The realities of this decision can be far more complex; let’s break the process down and look at some strategies for how to make the right decision.
The first two steps in this process are:
1. Drawing up a list of everything about your current home that you love. No detail is too small, so if you adore the cozy reading nook at the top of your stairs then be sure that is on your list.
2. Next, draft a list of what problems you want to solve. Common problems we often see our clients wanting to tackle include lack of a true master suite, not enough storage, no powder bath/coat closet on the main level, dark basements, dated kitchens, and no mud room.
Once you have established these two lists, take some time to give each strong consideration and try to determine a list of absolute ‘must haves’, either as a part of a renovation or if you purchase a new house.
With this list complete, your next steps should be:
1. Bring in an architect or two and have an initial consultation about renovating your current home. Present your list of ‘must haves’ and listen carefully to whether or not everything on your list is attainable and get a very general/ballpark estimate of what it will cost to achieve those goals. Take that estimate and pad it with an additional 20-25% in cost for scope-creep and unforeseen issues.
2. Bring in your real estate professional and present your list of “must haves” for your next home. Talk through the locations you are open to moving to and get a good sense of how much you will need to spend in order to achieve those goals. Additionally, you should discuss the realistic market value of your current home and whether you need to sell first to buy. You might want to take this one step further and actually go out and tour a couple of listings that meet your ‘must have’ list.
3. Consider the logistics of a renovation versus selling and buying. Can you live through your renovation? (Pro tip: most contractors will add 10% to the cost of a renovation if the owners plans to live through it to cover the cost of daily cleanups, etc.) If you have to move out then where will you live? How much will it cost? Where will your store your personal belongings? If you have to sell first in order to buy a new one, what is your plan for temporary housing if it takes a while to find your dream home? If you can buy first and then sell, are you prepared to carry both homes if it takes longer to sell than initially anticipated?
4. Now it comes time to finally make a decision. Are you going to renovate/expand your current home or are you going to sell it and buy your dream home? We have clients that choose both with fairly equal frequency. We tend to see clients who prioritize their location above anything else stay put and renovate/add on, while our clients who are more wedded to the features they want in their next home are more open to moving. In either case, we find it takes a methodical approach to the decision-making process to confidently arrive at the right decision.
It goes without saying that on your team during this decision-making process should be an excellent real estate professional and a great architect/builder. We know just the real estate professionals and we’re happy to refer a great architect, design/build firm or builder depending on the scale of your project.
Let us be part of the team helping you determine whether you can make your current home your dream home or whether it makes more sense to sell and buy. call us at 202.270.1081, or send us an email at email@example.com.