A common dilemma that I run into with my clients revolves around the question whether to remodel with their existing home to eliminate the aspects of the house that they don’t like, or to move into a different house that already has the qualities they are looking for. As an architect with a license to buy and sell real estate I feel qualified to have an opinion on this issue. I would like to underscore the word “opinion” however; there are no easy answers to this question. Ultimately the resolution is a mix of both the “scientific”; that is to say crunching numbers, estimating cost of construction versus purchasing a new home and the “artistic”; under that I file the intangibles, opportunity costs, personal costs and emotional attachments associated with place. Each client has to determine the content of each column and then decide which carries more weight in order to make the ultimate decision as to which way to go.
Generally speaking, the numeric side of this equation tends to be the “easy” part. However, even in this arena there are challenges. Without a clear idea as to the scope of the work being proposed, it is difficult to know the cost of staying and be in a position to compare with the cost of leaving. However, following a step-by-step process, it is possible to work through this issue in order to build an understanding of the costs of staying and the cost of leaving. The final analysis of course will still require a certain amount of personal assessment and ultimately a leap of faith based not just on the numbers, but also what is important for achieving life goals, happiness and comfort.
Process: Outline
1. Assess your house
Determine what needs to change to satisfy your needs: enlisting the help of an architect or designer, develop a design that addresses these needs (and possible deferred maintenance issues!)
Find a contractor willing to assemble an estimate. This can be done with schematic drawings (that is to say drawings that wouldn’t suffice for construction but still identify the scope of work and sources of the bulk of the costs in the project).
2. Analyze Housing Market relative to your house in the form it might take upon completion of your project.
a. Compare your house.
Find a real estate agent or use an online tool to examine homes in your area that are a similar configuration to your home in its upgraded state.
How does the value of those similar homes compare with your investment into your own home; your purchase price, plus the cost of the proposed project.
b. Find a “new” house.
Using the real estate agent or online tool, search houses in your area that are similar to the configuration of your upgraded house that you might choose to live in.
Remember to search for homes in a price range that is accessible given your budgetary constraints.
3. With the completion of steps one and two, it should now be possible to make a decision, at least in terms of the “numbers” whether it makes financial sense to stay and remodel or move.
4. Intangibles: these are considerations any time you are looking to buy a new house. But they also pertain to your current location.
a. Commute: does your current commute to work seem long? How about the new house?
b. School Systems: does the new house place you in a better or similar school district? Does that matter to you?
c. “Walkable” communities: do you want to be able to walk to things nearby? If so, what’s nearby and do you want to go to those places?
d. Community: this is hard to assess, but does then neighborhood seem welcoming? Is it too welcoming?
e. Institutions: are there social groups, religious institutions nearby that are of interest to you?
Process: Detail
1. Assessment:
Assuming you have been living in your house long enough to identify its strengths and weaknesses relative to your lifestyle, it makes sense to start this process by doing an assessment of your current dwelling. This assessment should take into consideration functional aspects of the house, the state of the house and aesthetic issues.
Function:
You might ask yourself questions like, “what do I like/dislike about my house?”, “how does it support/inhibit the way I live, or how I want to live?”. Are there things about the house that you don’t like from a functional standpoint? “There’s no closet near the door that I use every time I enter and exit the house”, “There’s only one bathroom and it’s on the second floor and my mother can’t walk stairs”, “We’re having another child and will be short a bedroom”. Most people don’t have the luxury of designing and building their own house, so for the most part we tailor how we live to the house we are in. So, though this may seem obvious in some ways, it is important to think not only about how you live, but how you might WANT to live if you had a choice about the spaces you occupy. Possible considerations might include natural light (orientation of the house and window openings contribute to this), circulation, “flow”, ingress, egress, private space within the house versus public space (i.e., shared by all occupants of the house).
Maintenance:
This might be the least interesting aspect of one’s house to consider, but it is likely the MOST important. What is the state of the house physically and what maintenance has been put off too long? This is not the same as interiors that become “dated”, or styles that are no longer appealing. The issue is whether a roof needs new shingles, or windows have become drafty and difficult to open. It could be as simple as a new coat of paint, or new tile in a bathroom.
Aesthetics:
This is the part that most people would probably find the most satisfying. It’s all the stuff that we interact with daily; paint, tile, flooring, etc. Changing the aesthetics could also mean a dramatic change to how a space feels and how comfortable you are in it.
Working with a good designer or architect, you can address all three of these issues when thinking through your project. It is particularly cost effective to take on issues of deferred maintenance when taking on a remodel. With “staging” costs and other set-up costs being fixed, adding to the “to-do” list contributes to the cost of the project but to a lesser degree than splitting the project into two smaller ones in which those same fixed fees are incurred twice.
The scope of work proposed may be identified without doing a complete set of drawings. The architect or designer can do an initial “estimating” set of drawings that will outline the “wish list” and illustrate existing conditions and any proposed addition or remodel without showing all the detail required to build the project. Though there’s always the possibility that ideas will change as you develop a set of drawings further, and there’s a chance that things are left out in these initial drawings, the intent is simply to identify all the aspects of the project that contribute to cost for the purpose of estimating.
2. Housing Market:
As an architect and real estate agent I can say I have one foot on each side of this discussion. However, my experience as a real estate agent is much more limited than my experience as an architect. In short, an agent that knows the market, or has a good grasp of analysis and is willing to take the time to do their homework is a valuable ally in this process. Though there’s whole process to market analysis that I am not getting into here, suffice it to say that it’s as much an art as it is a science. It involves finding houses that are similar to the “target” house (that would be your house in this story). That’s where the art is; the comparable homes aren’t always EXACTLY the same. Where they differ requires subtle adjustments so you can do an apples-to-apples comparison. Online tools can get you in the ballpark but the expertise of the agent can give you the interpretation that will give meaning to the numbers.
3. Decision Making:
With all the numbers at your disposal, it should be possible to make an informed decision; the architect, designer and real estate agent can help you work through the decision-making though the final choice will be yours to make. It may seem like a lot of effort to arrive at this point, and in some ways, it is, but if you are able to follow a path like this, it should give you some piece of mind that no matter what the decision is in the end, that you made the right one financially and personally.