The Zillow report found that not only three-quarters of the 10,000 respondents plan renovations rather than making a down payment, but that the preference to renovate rather than move strengthens with age, as homeowners are more likely to have greater equity in their homes and more savings in the bank. Deciding whether to renovate your current home or buy a new one isn't easy. A smart real estate agent will tell you that it's all about location. This plays an important role in the question of the new versus the renewed.
If you love your neighborhood and have qualms about leaving behind your beloved neighbors, the comforts and the feeling that this place is your home, then renovation may be the best option. Better yet, if your current home is in a modern neighborhood where real estate prices are soaring, a renovation can also be a smart financial move. Request cost estimates for the remodeling project and then determine the fair market value of the finished project. If the new selling price exceeds the cost of renovations, the decision may be obvious.
A bid that is too high will likely allow you to get the house faster, but you may end up paying above the market value of the home and you'll probably have to recoup that cost before you can be in a proper position to generate equity on the home. If you expect remodeling to add value to your home, you should carefully consider what types of remodeling projects will actually add value.
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