Need help on selling vs. renovating - not sure who to call for advice

[Anonymous]

Maybe I'm watching too much HGTV, but I'm wondering if there are any professionals out there who specialize in advising homeowners on the economics of renovating vs. moving. I don't need a precise scope of work or a promise of what my house might sell for, but just some general ballpark numbers on fixing up vs. moving on that will help us make decisions on how much to improve our current place.

Here's the background: We live in a very imperfect house - it's old, on a busy streets, needs structural work as well as endless aesthetic improvements, and is big enough for my family with young kids but probably not quite big enough to house 2 teenage boys comfortably. We bought back in the boom, never intending to flip but certainly not appreciating how our lives would change with growing children - for example, how much we'd want a decent sized playroom. The plus side is that we are close-in and have a (relatively) easy commute as well as top-notch schools. We bought super conservatively - put down 20 percent, took out a 30yr mortgage, and limited ourselves to a total budget that we could continue to handle even if one parent lost their job. We aren't underwater and probably could get back at least what we paid and what we spent (approx $40k) on big ticket fixes so far. BUT our house cost us at least $250k less than anything in the nearby vicinity that would represent a marginal improvement for me - you know, some modest combination of the grab bag of things I would like for the long term ... a quieter street / extra bedroom / updated kitchen and the list goes on!

And as we go into yet another year of spending $10-20k on improvements, I start wondering if it's time to think about doing a big reno project OR whether we should be planning to cut our losses. But I don't know how to assess. There's a show on HGTV where they scope out what it might cost to fix up and add onto houses. Is there anyone like that in real life? Should I be looking for realtors or contractor types? I'm happy to pay for someone's time, but I don't want to spend thousands on architectural drawings, nor do I want to mislead anyone since we are almost certainly not going to do a major renovation this year. Thanks for any suggestions!!

[Anonymous]

I know what you're asking. I would talk to a real estate agent first, and ask him/her about topics such as over-improving your particular property, given that it's on a busy road. That piece is insurmountable.

[Anonymous]

Sure, talk to a realtor or two. Just keep in mind that a realtor will always tell you that is is a good time to sell/buy.

[Anonymous]

I know financially you could figure this out, but also, what's it worth to you in terms of time and effort to renovate/build on your current property? Only you can answer that for sure.

It sounds like you want to move on but because of the market you might lose money or at least, not sell at the peak of the market. But you'll still spend probably as much money to "remake" your current home, and it's still on a busy street.

I think it will come down to what's most important to you--could you have what you have now but slightly better? (not too much more mortgage?) You must have some equity in your current place that you could use to sort of off-set the rise in prices/mortgage that your next home would entail. How much are you willing to give to that next place?

[Anonymous]

Talk to a few realtors who sell a LOT of homes in your area. They'll have the best idea of marketability vs what constitutes overimprovements. They'll obviously be trying to get the listing if you decide to sell, but if you make it clear that you're on the fence, you should get a realistic idea of what your house might sell for as is and when you might be able to get for it with particular improvements.

I've talked to some realtors at open houses about this exact thing. I usually say that I'm a real estate addict, just looking, and we're constantly deciding whether to blow out the back of our house or just sell and move to one that's done. Several of them have offered to come over and give us an idea of the stay/sell equation, so I think it's something they do with relative frequency.

[Anonymous]

We recently remodeled, and we worked with a design/build firm. One of the things some of the d/b companies we met with did before the initial meeting was to research our neighborhood so we'd know whether we were overbuilding for the area.

[Anonymous]

Could you try to get that baldie mustachioed guy from "Real Estate Interventions"?

He would be able to point out what would be a "huge value-add" etc....

[Anonymous]

I probably should clarify - I'm not worried about overimproving, certainly not a concern given the way the house is now (1970s appliances in some cases), and also because the street while busy saw quite a few tear-downs give way to McMansions even as the market tanked. I know either way the house will need additional work before we could sell it. The question for me is whether to do the minimalist version (which would still probably run another $50k I'm guessing) and try to move up and out, or whether we should renovate this place to stay for the next 15-20 years by gutting and expanding (which I'm guessing runs in the hundreds of thousands, I just don't know how many!) It's literally trying to understand whether that number is approximately 150k or 400k that would be useful in weighing all the other issues (costs of moving vs hassle of reno work etc.)

[Anonymous]

We are going through the same thing, and decided even though it would economically make sense to sell and move, we are adding on.

We love our house, street, neighborhood, commute, etc. We are actually going to look at one more house for sale in our neighborhood that has a little bit more of the open floor plan, bigger kitchen, extra bathroom and bedroom we are looking for, but now my heart is so set on the addition WE could do that we will probably just stay and go through the pain of renovating.

That said, we know if we do we are committing to staying here for a LONG time.

[Anonymous]

What type of house do you have now? What sort of renovation would you need to be happy with your house? If you have a one-story ranch-style house and want a second-level, those are costly, complicated additions because ranch houses don't often have the load-bearing interior walls to support a second floor. Does your property have the space and level grading for a rear bump-out/bump-up to add a room below and a room/bath above? Those are more reasonably priced and easier to do. I'd probably call a contractor to see if you could get a free or low-cost estimate on what kind of cost you're looking at. Then add the cost of that to what your house could probably sell for now and comb the real estate websites to see if you could get something you like in that ballpark. if you do decide to sell, you might ask your realtor of choice what minor improvements should be done to sell your house quickly for a good price.

I feel you. I have a house I'd probably stay in if it weren't for the absymal school district we're in and the length of my commute. It has enough space for us and the mortgage is great. So I'm trying to figure out what I need to spend to sell the house easily, and what I'll have to sacrifice to get into a house in a better school district.