Moving On and Moving Up…
The Next Phase of your Real Estate Life

Home is where the heart is… That’s true, but when do you decide whether to transplant your heart to a new home or spend the money remodeling the one you have? Maintaining and updating your home for 30 years is expensive, but so is buying a new home. Currents has composed the following pro-remodel / pro-move list for those of you debating ‘update or buy’ with your family or in your own head:

New Home Purchase
Shopping for a new home can be so exciting and so much fun. There is so much to think about…. location, schools, shopping. There is also the price to consider.

The most positive aspect when considering this price is that there are typically no surprise costs. Before you make an offer on a new home, you know the property value and the property taxes; you know the energy-efficient elements; you can ask to see the owners utility costs for the past year; you can see the cost in terms of upfront and long-term. There are few surprises, but when computing the costs of purchasing a new home, be sure to account for:
• Real estate commissions, closing costs and moving, which combined, typically equal 10% or more of the house you’re selling.
• The cost of the new, presumably bigger mortgage, multiplied by however long you plan to be in the house.
• The cost of higher utility bills, bigger homeowners insurance premiums and greater property taxes over the same period.
• Any new furniture, window treatments, landscaping or other purchases that will make your new house feel like your home.

Remodel
Planning a home remodel can be a lot of fun too. Home design magazines, strolls through home design stores and warehouses, sketching with your spouse and kids over dinner… all of this is so exciting. And remodeling is a significant investment in your home. Saving on remodeling costs will undoubtedly give you a good feeling.

It’s important to note that when remodeling, surprise costs are not uncommon. Compare the cost of remodeling your current home with buying a new home. In fact, a study commissioned by the Wall Street Journal found that, depending on your proximity to major metropolitan areas, the price of keeping a typical home up to current standards over a 30-year period is almost four times the home’s purchase price.

Remodeling veterans recommend building in a safety net by adding 10% to 20% to whatever estimates contractors give you. Then consider the out-of-pocket costs of construction, the cost of any financing – generally credit interest rates are higher than mortgage rates. If you’re adding on rather than just renovating, the cost of higher utility bills, bigger homeowner’s insurance premiums and greater property taxes from your additional space have to be included in the final cost estimate.

Making a home more energy-efficient will be worth the investment, especially over time. Not only will you be doing your part for the environment, you could save hundreds, even thousands of dollars on utility bills over the years you stay in your home.
You can make your own home more energy-efficient and you will know who did the project and its guarantees.

Choosing materials, designs, appliances and fixtures that are environmentally friendly and energy efficient can save you a surprising amount of money when you remodel. First, choosing energy-efficient appliances, windows and fixtures can earn you a nice tax credit. Second, making your remodel energy efficient might qualify you for special terms on your remodeling loan. Third, your utility company might offer a rebate when you install energy-efficient appliances. Fourth, you will save over the entire life of the materials and products you install for improved energy efficiency in lower utility bills every single month.

When making your decision about buying or upgrading, the total cost of your home remodeling project and the
total cost of a new home purchase can be compared.

Saving money must be an intentional part of every decision and every choice you make. If you do the research and
find a local contractor who will listen to your concerns, follow your plans, be sensitive to your budget and your time schedule, a remodel can be relatively painless. However, a new home purchase can be painless when you find a real estate agent who knows Monmouth County and knows your new home budget.

Thanks to Scott Poyner for information on new home purchases.
Coldwell Banker Rumson / Fair Haven
732.842.3200 • Scott.poyner@coldwellbankermoves.com