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Remodel, knock down or sell?

Quick question for those who have either remodeled or knocked the home down (for a new build) or just plain sell.  We have a ranch, 2 bed, 1 bath (total 5 rooms) and we sit on a large lot. We have done some updates (new windows, roof, electric updated) but not much more then that until we make up our minds on what to do. For those of you who have been in this situation before, what helped you to make up your mind? Thank you in advance!

  • October 04 2008 - US
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Answers (7)

Figure out what the house you want would cost to buy on the market and what yours would net.  Subtract the profits from the price of the new house and if you could make your house what you want for less, do that. Given the current market and you needing to sell a house to accomplish getting a new house, I would be inclined to check with an architect and see what they can do and how construction can be phased. Unless you are in a $20k shack, it is probably fair to say remodeling may be the more predictable option.

  • October 05 2008
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I am in a similar situation. We bought our home b/c of the large lot. It is a small 3/2. We would really love to have a larger living/family room area and master bdr and maybe a 4th bdr.

Knock it down - We can't afford to knock it down b/c of the building cost plus the rental cost. Make sure that you remember to calculate how much you will pay in rental fees while the new home is being built. Also, check with your mortgage holder to make sure they will allow you to remove the home. And make sure you can get a construction loan. Remember - this is a very tight credit market and the banks might say no to one or both of these.

Add on - We had a builder (or 2) come by, meet with us, look at the addition and give us ideas of cost ranges. The cost to add-on per square foot is more than homes in the neighborhood are selling (and we live in a very desired neighborhood). Also, can you stay in your existing home while the addition is being built. If not - don't forget to add the rental costs into your budget.

Last but not least - check with your property tax appraiser to see how an addition versus a new build effects your property tax basis.

Hopefully these tips will help you while trying to figure out a solution
  • October 07 2008
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It couldn't hurt to put it up as-is for a while, could it?  If not with an agent, at least Craigslist and the like.  Depends on the market obviously, but a cheap, smaller, less-than-perfect house in an okay neighborhood may sell better than you'd think. Perhaps to a young couple with good savings but with student loans & currently low wages putting a firm cap on their house budget by debt ratios (this is me, by the way). People who are looking for the opportunity to add their own sweat. You may not get as much as you want, but more than knock-down.  And, hey, there are lots of other houses out there looking for owners if you do manage to sell it.

  • October 08 2008
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good answers above.  In addition if you tear down you might want to consider a manufactured or modular home.  It could really limit the time you had to be out of the house and then you would have brand new.

 

Glen

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  • October 09 2008
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How about building a home behind yours so you could stay in your house and do the new home build at your own pace, and as your budget allows?

 

If you have large property, you might be able to put a larger home in front of, to the side of, or behind your existing home. You would need to check with your town to understand the regulations and tax implications though - but just an idea!

  • November 04 2008
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glen - that last line is spam. We don't do that here. It's been flagged for removal.
  • November 05 2008
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Profile picture for Mark Storolis
The answer is conditional:
If you do NOT need the equity to move to your next home:
A. Rent it out for as long as possible. Sell when market conditions peak.

If you do need the equity to move:
A. Sell the sucker

If you are pregnant, adding to the family
A. Sell, fast

If you are in love with your location
A. Add on, wait for summer. Thoroughly review your contractors, do not pick a contractor because a member of your church recommended them. And the market is so slow, what would have cost $200/sf to add could be negotiated down to $150.
  • November 06 2008
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