The decision of whether to sell a house, or stay and remodel, is one that is based on many factors, including what type of changes you want to make, how long you plan to stay in the house and the cost of the remodeling in comparison to the value of your home.
Whether you are in the Naperville area, or in Chicago, selling a home can cost up to 10% of its value to replace it with another, even one that costs exactly the same. Real estate transaction costs, including agent commissions, mortgage fees, transfer taxes, attorney costs, title searches, surveys, movers and the like boost the cost of home replacement.
Thus selling one $300,000 house and buying another of similar value could set you back as much as $30,000. So, when looking both at home remodeling costs vs. the cost of moving, it may make sense to stay put.
Experts say there are at least two rules of thumb when it comes to remodeling your house.
First, you should not increase the value of your house to a point where it is the most expensive home in your neighborhood. This could make it difficult to sell the house in a competitive housing market.
Second, you should strive to keep your new mortgage debt below 80% of your home's new appraised value. Not only does this keep you below the debt/equity ratio requiring you to pay private mortgage insurance on the new loan, but it also ensures you don't assume a monthly payment that precludes you from having a balanced household budget.
Remodeling magazine conducts an annual survey of the remodeling projects that add the most value to your home. Ranked in the order of percent of cost recouped at home resale, included minor kitchen remodel (92.9% of cost recouped), siding replacement (92.8%), midrange bathroom remodel (90.1%), deck addition (86.7%), and midrange bathroom addition (86.4%).
DJI Services can assist you in all your remodeling needs, whether interior or exterior.
Give us a call at (630) 569-0394.