You own your home, but you're not quite happy with it. Maybe you're
dreaming of more space for a growing family, a two-car garage, an extra
bathroom, or a more modern kitchen. You may be wondering: Should I
renovate my existing home or sell it and buy a new one?
Deciding whether to renovate or move is never easy — especially if you
love your neighborhood and your community. While a renovation could
turn your current house into the dream home you have always wanted
— and potentially increase its resale value — a new home could offer
you a fresh start and more space without the hassle and money required
There's no right answer to the question of whether you should renovate
or sell your home. If you're torn between upgrading your house or
starting fresh in a new home, here are some things to consider as you
weigh your options.
Renovate your existing home
If you're trying to decide if it makes sense to renovate your existing
home, here are a few key things to consider.
Do you generally like your home, your neighborhood amenities, and
school district? If so, then renovating your house could be a good choice,
even if you can't expect to recoup 100% of your renovation costs when
you eventually sell.
Your long-term plans
With most renovations, you'll pay more than you'll gain back when you
sell. That's fine if you plan to stay in the home for a long time, since
you'll have ample time to enjoy the fruits of your investment — and
you'll save yourself the time and money of buying and selling a home.
But if you're planning on moving in a few years anyway, renovating may
not be the best way to go.
Since you likely won't be able to afford everything, knowing where your
priorities lie will help you stay within your budget — and get the most
bang for your renovation buck.
Before you start any work, you should determine how much you're
willing — and able —to spend on renovations. Getting estimates from
contractors can help you understand what you can reasonably
accomplish given your budget. If you need to borrow money to pay for
the renovation, explore available loan options, such as a home equity
line of credit, home equity loan, or personal loan.
Consider resale value
All things considered, certain projects, such as a kitchen remodel or full
interior paint job, often prove to be well worth the investment and time.
The 2020 Cost vs. Value Report1 compared the average costs for 22
popular remodeling projects and how much of that cost homeowners
recouped when selling in various different segments of the U.S. housing
In the southeast United States, the average seller recouped:
77% of the cost of adding a wooden deck.
67% of the cost of a mid-range bathroom remodel.
59% of the cost of a mid-range major kitchen remodel.
59% of the cost of a mid-range master suite addition.
Taxes and utilities
While major upgrades may solve immediate space needs and add
significant value to your property, those projects could also potentially
increase your utility and property tax bills. Be sure to understand the
energy and tax implications if you are planning to significantly upgrade
Can you tolerate living in a construction zone?
Remodeling your home will mean a fair amount of chaos and noise. This
can be difficult if you have a young child at home or a home office. And
depending on what you need to upgrade, it may mean doing without a
kitchen — or that second bath — for weeks at a time. If this won't work
for you, buying a new home that better fits your needs may be the way
Selling your home
If you're considering selling your existing home and buying a new one,
you'll want to consider these things:
Can you afford to buy the type of house you want?
Before you make a decision, drop by a few open houses in your target
neighborhood and also talk with a real estate agent. This will help give
you a sense of the selling price of the type of house you want. At the
same time, get an appraisal2 to find out your existing home's value. To
make the best decision, you need to understand the cost difference
between selling your home and buying a new home. It also helps to talk
with a mortgage officer at your local bank to estimate what your new
monthly payment would be in different scenarios.
What are the costs of selling, buying, and moving?
The cost of buying a new home isn't as straightforward as comparing
the cost of your dream home with the potential sales price of your
existing home. It also costs money to sell your home and buy a new one.
You'll need to pay for closing costs on the new home, which can range
from 1% to 5% of the purchase price.
You may want a larger house, a more modern kitchen, a master suite, or
a bigger yard. But the real question is whether or not what you want is
actually for sale in your target area. Maybe most of the homes in your
target area are smaller homes — or were built before large bedroom
suites were fashionable. Or maybe most homes come on smaller lots. If
this is the case, you may be better off renovating your existing home.
How competitive is the real estate market?
You should also consider how competitive the current housing market is.
If the type of house you want is typically getting multiple offers, you
may want to reconsider. Contingent offers are far less likely to be
accepted in a hot housing market, possibly putting you, as a prospective
buyer, at a distinct disadvantage. The alternative (selling and then
renting while you shop for a new home) may leave you in limbo — and
ultimately be more of a hassle than renovating your existing home.
Synovus can help you secure financing for your new home or a
renovation. Find a branch near you to discuss your options.
Important disclosure information
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
Remodeling, "2020 Cost vs. Value Report," accessed March 22, 2021.
Larissa Runkle, "Should Home Sellers Get an Appraisal Before Listing?
Here's Why It'll Cost You," Realtor.com, published August 7, 2019,
accessed March 22, 2021.
Daniel Bortz, "The Real Estate Commission: A Guide to Who Pays,
How Much, and More," Realtor.com, published April 15, 2019, accessed
March 23, 2021.
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