Is Now a Good Time to Make a Move or Makeover My Home?

Many of our clients are happy holding down some VERY low mortgage rates they secured over the past few years.  So much so, that even when their current home no longer serves their needs, even if it makes them unhappy, they’re now torn because of the financial implications that may come along with a potential move or adjustment to that mortgage. 

So, I ask, when should you sacrifice quality of life over potential costs, as well as short & long-term financial gains to live in a home you LOVE?  And, is it better to move or to makeover?  Also, when it comes to a remodel, is it better to refinance or is an equity line of credit better?    

So many unanswered questions.  So many unknowns! Until now.  Having been your go-to guru for #AllThingsRealEstate over the past two decades, we here at YOUR Home Team pride ourselves on being educators above all else.  That’s the EXPERTISE we bring to each transaction, whether it’s your 1^st home or your 50^th.  Because at our family business, you’re not just business, you’re FAMILY!  And, whether you buy or sell in 3 weeks, 3 months, or 3 years…we’ll be here whenever you’re ready.  We are here to be your Real Estate resource for life. 

So, real talk.  Do you actually need to move?  One of my favorite Real Estate Coaches, Tom Ferry, says people only move due to the “5 D’s” That’s Diamonds, Divorce, Diplomas, Diapers, & Death.  Here in Florida, especially, I’d say there’s a 6^th “D” and that’s Downsizing.  If any of these Ds apply to you, then it’s time to not just speculate but really time to dig into the math to make you move.  For those of you that are getting married, getting divorced, have a new baby, lost a family member, graduated to the next level, or are even wanting to simplify & go smaller…for a FREE no obligation review of your equity position, contact #YourFavoriteLender Home Team Lending at 833.WE.LOAN.1 today.  Or, apply online at www.YourFloridaLoan.com. Click the cute guy named Manny, I heard he’s pretty good (*wink).  😊

But what if none of those 6 D’s apply to you? If you really don’t NEED to move but you feel like your current home just isn’t cutting it, what is your best bet?  Because when you weigh the pros and cons of moving vs a home makeover, it can be a real head scratcher whether rates are high, low, or anywhere in between.  Don’t fret. 

There’s 4 basic steps to know what route to take:

Step one: pinpoint what’s bugging you about your home.  An outdated kitchen or bathroom can go from basic to BEAUTIFUL with relatively minor renovations.  Plus, a kitchen or bath upgrade can not only increase your enjoyment of the home but is proven to be one of the highest returns on investment for your home’s value. 

What if your current home lacks the one room you really need?  That can be a little more challenging, but, as I always say, “everything is figureoutable.”  From building an addition to reconfiguring the floor plan, or even building a full-on detached building, you have options when you own a home.   Be careful, though, because when it comes to building an accessory dwelling, you need to check with the zoning & permitting department where your home is located first.  Also! Not all remodeling choices impact the long-term value of your home in a positive way.  For example, garage conversions aren’t typically popular with buyers and can sometimes be harder to sell. 

The specific impact of a renovation will depend on a number of factors, so if you have something specific in mind, before you move forward, we can help you assess how a planned project is likely to affect the value of your home. Reach out to #YourFavoriteRealtors the Home Team Agents of lpt Realty at 833.4YO.TEAM. Or, request your home valuation at www.YourHomeTeamGroup.com.

If you don’t need to move but didn’t realize that living so close to the airport would be so noisy at night, or you don’t love the school district your home is in, or any other reason that location alone doesn’t work for you anymore, that’s a no-brainer: location is not something you can change, unless you change actual locations. Duh.  Now that we’ve realized the motivation to makeover or move, what’s the next step?

Step two: answer these questions:

• How long have you been in your current home?
• How much did you put down on your home when you purchased?
• What’s your mortgage payoff?

If you’ve lived in your home 3 years or longer here in Florida, more than likely, you have some serious equity in your home.  If it’s less than 3 years, depending on the amount of your down payment when you purchased you viably could have enough equity to make the move or even the “makeover” make sense.  Knowing this information is key for step three.

Step three: reach out to me, Your Marketing Mama for #AllThingsRealEstate, or any one of the EXPERT AGENTS on my team.  We can provide a Comparative Market Analysis for your home to give you a range of value for your home.   I know what you’re thinking…you can look at a “Zestimate,” right?  NO! 

Listen, I, like any other real estate professional, have a love/hate relationship with Zillow.  But, the fact remains, a computer algorithm will never be able to accurately provide value for your home.  Real estate is hyper-local, and a nationwide algorithm isn’t going to be hyper-sensitive to the features of your home to give you a realistic value. 

Here’s the Zestimate for a home I sold a few months ago: $211,500.  We sold (and the home appraised) at $280,000!  That’s nearly $70 grand!  You could most certainly upgrade your kitchen with that kind of cheese.  The point is-when you need to know your home’s value, go to a professional expert. Period. This will provide you with an accurate equity position; which is your property’s value minus what you currently owe on your mortgage. And that’s where step four comes in.

Step four: now that you have an idea of equity position, the next step is to understand the costs for each option. Here’s the straight facts from all components, as we have real estate sales, lending, and title all under one roof here at the Home Team Group.  No need to speculate when you have me, Your Marketing Mama for #AllThingsRealEstate because y’all, we don’t do this for practice as we’ve literally been in this business since Jesus was a baby (well, maybe not quite that long), but for our entire adult lives.  And, through these past 20 years we have expanded our business from real estate sales to also include a mortgage and a title division. 

On average, it costs approximately 11.5% of the home’s final sale price to sell a house in Florida.  This includes preparation costs, Realtor® commissions, and approximate seller closing costs & title fees. Knowing your payoff will really help us drill down on your net proceeds.  And, those net proceeds coupled with the impact of homestead portability, and the very real possibility of negotiating seller concessions on your new purchase might just be the tipping point to pull the trigger and put your home on the market. 

The costs of a renovation can vary widely, so it’s vital to get several estimates from contractors upfront to understand what it might take to achieve your dream home. You can cover the costs by accessing the equity you have in your home through a cash-out refinance or with a home equity line of credit (HELOC).  So, what’s the difference between the two? 

A cash-out refinance provides you with a one-time lump sum of money; whereas a HELOC provides you with access to your funds over a span of time and you can use your money as needed over that period.  Since a cash-out refinance is considered a first mortgage, it comes with more attractive rates and less in-depth requirements for approval. HELOCs typically take the form of a second mortgage, so are considered riskier to the lender, which means they are also a little harder to qualify for than a cash-out refinance due to that risk.  You’ll typically need a higher credit score for a HELOC as well. 

Cash-out refinances also come with fixed rates, but HELOCs have variable interest rates, which means you may pay more over the lifetime of the loan. When it comes to less upfront costs, a HELOC may be a better option because refinancing incurs closing costs, while HELOCs typically do not.  Remember, though, those closing costs can be paid with the equity you have in your home. 

The bottom line: if your home has equity, you can leverage that equity to upgrade your home with a makeover or a move.  And the way to make the math work depends on so much more than a current market rate, because rates can be refinanced (with those costs covered by the equity in your home).  The cost of headache, hassle, and your actual time also plays a part.  There is no one-size-fits-all answer.

If you’re feeling trapped in a home that doesn’t work for your day-to-day life now, and you haven’t really discussed the math to make your next move, let’s talk.  Information is FREE and so powerful.  Let your home’s equity & my TEAM WORK for you! 

Much Love, 

Amanda