It’s a common scenario that every homeowner eventually encounters: Your current space no longer works for your lifestyle, and you need to either change the space or change homes. But which option works best for your specific needs?
When deciding between a home remodel or a new home, you’ll want to consider a wide range of factors, including your location, your financial needs, and how each process can impact your daily life.
We’ll walk you through what you need to know and what questions to ask yourself to make an informed decision about the future of your home.
Table of Contents
- Do you love your location?
- What are your goals for your home?
- Will a new house solve all of your current and future needs?
- How much time do you want to invest?
- Does the cost of buying a new home make sense?
- When should you remodel, instead of buying a new home?
- What are the benefits of remodeling?
- FAQ
Do you love your location?
The location of your home is perhaps the largest consideration when deciding if you should remodel, because you can’t change it without moving to a new home entirely.
It’s important to ask yourself how much you love your current neighborhood, your neighbors, as well as your commute. Finding a home in a great neighborhood that you’ll love can be one of the more difficult parts of the house hunting process, especially in a competitive market like Scottsdale. If you already love your neighbors and your neighborhood, why not simply rework your existing home into the perfect space?
What are your goals for your home?
It’s important to understand what you want to achieve by either moving or remodeling your home, as your specific goals will help determine which option makes the most sense.
If your goals include the following, you’ll likely be able to achieve them through remodeling, without needing to go through the hassle of finding, purchasing, and moving into a new home:
- Improving the layout of specific spaces, such as the kitchen or living room.
- Creating an updated space with modern amenities and appliances.
- Addressing aging-in-place concerns.
- Adding a casita or room addition for additional space.
However, if your goals are more geared towards these, then a new home may be better suited for your needs:
- Adding significant square footage to a small lot.
- Multiple additional spaces or bedrooms.
- Or you’re not fond of your current home’s location.
Will a new house solve all of your current and future needs?
As we said earlier, finding something in the right neighborhood can be one of the more difficult parts of buying a new house. This often means that once you’ve found the right location, you’re stuck with the design and layout of the available homes.
Many homes in the more desirable neighborhoods in places like Scottsdale, Paradise Valley, and Arcadia are more than 30 years old, which means they are at a prime age for remodeling. If you’re purchasing a house that’s more than three decades old and has never been updated, you’ll be facing a large-scale remodeling project, just to modernize the space.
If the home has been updated recently, there’s a good chance the previous owner customized it for their specific needs, which may not align with yours. This, too, can lead to remodeling a single room, or more. If only a small amount of work is needed, this may be a viable solution.
Should you decide to purchase a new home that you know will need a refresh or remodel, it’s best to reach out to a full design-build firm, such as Premier. We can help you make an educated decision with design and budget options before you make your purchase. Plus, we can work through our design process while you’re closing on the house, speeding up the overall process.
How much time do you want to invest in selling your old home and purchasing a new one?
If you’re considering a new home because you’re trying to avoid the disruption of a remodel, you may be surprised by how long a typical move takes. On average, a home in Scottsdale takes roughly 76 days to sell in today’s market. This isn’t a big deal for some, but if you need to sell your current home to put a down payment on a new one, then you’re looking at two and a half months of open houses and home tours disrupting your everyday life.
When your new home, Williams Luxury Homes suggests that most Scottsdale luxury buyers should plan for a total timeline of two to six months. This timeline includes searching and touring, which alone can take several months (longer if you’re looking in very specific neighborhoods), in addition to inspections, negotiations, and closing.
Of course, once you’ve purchased your new home, you’ll need to pack up, move, and settle into it. Even with the help of skilled movers, this can be a serious disruption that can take weeks or longer.
While a home remodel also takes time, it doesn’t have to be disruptive to your everyday life. In fact, once we’ve completed the initial consultation and design work, we can complete the entire process regardless of where you are. The entire design process can be done virtually if you’re out of town, and you can return home to a beautiful, customized new space, with no disruption whatsoever.
Does the cost of buying a new home make sense?
It’s easy to look at the purchase price of a new home and compare that number to the cost of remodeling your space. But the reality is that when you consider closing costs, commissions, title insurance, escrow fees, and property tax preparations, it can paint a very different picture.
According to Agent DA, Scottsdale sellers generally see between 6% and 10% of their final sale price go toward closing costs and commissions. This means you’ve already lost up to 10% of the value of your existing home, just from the sale itself. Then you have to consider closing costs such as escrow fees, transfer taxes, and more, which often total about 2 to 5 percent of the purchase price.
On homes with a price of $1 million or more, this means you’re losing out on more than $100,000 from fees that do not contribute to your equity. Compare this to the cost of a remodel, which contributes directly to your home equity. For example, homeowners who complete a major kitchen remodel typically see a 35 to 40 percent return on their investment, and are left with a space that’s perfectly tailored to their needs.
It’s also important to note that if you have a low-interest mortgage on your current home, then you’ll need to factor that into your decision. A higher interest rate means you’ll end up paying more for your new home, even if its value is the same as the one you’re in now.
When should you remodel, instead of buying a new home?
- You love your neighborhood (and your neighbors!)
- You love your home, but it doesn’t meet your current needs.
- You want to customize your space completely.
- You have a low-interest mortgage and don’t want to pay more.
If any of these apply to you, then you’re a great candidate for a whole-home remodel. However, if none of these describe your situation, then a new home may be an option to consider.
What are the benefits of remodeling?
If you’re still on the fence, here are a few great reasons why staying and remodeling your existing home is a great choice:
- Full control and customization of your space, no need to compromise.
- Your investment adds value to your home.
- No need to leave a neighborhood that you love.
- You can stay in your home during renovation (or schedule it when you’ll be out of town!)
- Avoid closing costs, realtor fees, moving expenses, and high interest rates.
- Save time and money in a competitive real estate landscape.
Should I buy a new home, or remodel my existing space?
In the end, there’s no one-size-fits-all answer to this age-old question. The answer largely depends on your current home and your specific needs.
For most homeowners who are happy with their neighborhood and want full control over the design and layout of their home, a remodel is often the best choice. After all, you can completely personalize your space down to the last detail, all while adding to your equity.
Regardless of whether you ultimately decide to move forward with renovating your existing space or purchase something new, the Premier team is here to help. We’re happy to answer questions and provide options for your current home, and we can help determine your customization options for your new house.
No matter what you choose, we’re here to help. Schedule your complimentary, no-pressure consultation with one of our designers, and let us turn your home into the home of your dreams.
FAQ
When does it make sense to remodel my existing home?
If you’re happy with the location of your home, and you’re not looking to expand it beyond the size your current lot allows, or you want full control over the design and customization of your space, then a remodel is likely your best option.
When should I consider purchasing a new home?
If you’re unhappy with or unattached to your current location, or you have a small lot, but want to expand your square footage, and don’t mind putting in the time, effort, and money involved in purchasing a new home, then a new home may suit your needs.
Can remodeling my home add to its equity?
Absolutely! In fact, homeowners who complete a major kitchen remodel typically see a 35 to 40 percent return on their investment.
What additional costs do I need to consider if I’m buying a new house?
When selling your existing home, you’ll pay closing costs, commissions, title insurance, escrow fees, and property tax preparations, among other possible fees.
And when purchasing your new home, you’ll be required to pay escrow fees, recording fees, transfer taxes, and more.
In total, you could spend as much as 15% of your existing home’s value on expenses related to purchasing a new home, none of which will add to your equity.
How much does a typical home remodel cost in the East Valley and Scottsdale?
The cost of a home remodel depends on a wide range of factors, including the size and number of the spaces you wish to update, as well as the appliances and materials you desire.
Our skilled design team will be happy to provide a personalized quote based on your specific home and needs. Schedule your no-pressure, complimentary consultation today.
