Many homeowners will eventually reach the point where they begin to ask themselves should they add on to their existing homes or should they sell it, NOW. This is where you need to bring in your trusted Real Estate professional. The key word is “trusted.” The reason for this is there is an implicit conflict of interest with an agent. If you ask the average roofer if you need a new roof, the likely answer is Yes, because the roofer isn’t getting paid to give out free advice. He only gets paid if they put a roof on your house. Likewise, an agent isn’t going to have an opportunity to sell your house if they counsel you to add on to your existing home. So why would you ask them considering that you clearly understand the dilemma.
A good agent (trusted) will tell you the truth, not based on what he/she thinks you want to hear or based on their own profit motivation. As much as it might make sense to slap on that addition, etc. there is a distinct possibility that the costs you will incur will be higher than you anticipated. Also, you could be depleting financial resources that you might have allocated elsewhere. Then there is the cost of financing a home improvement. These rates are always less favorable than current mortgage rates. Something else to consider is do you have any idea how much stress you will potentially be adding to your life by taking on a significant home improvement project? Let’s just say “Yikes” and call it a day on that one. But the most important thing to consider is, if you decide to go ahead with the addition project is this. There is the definitely the possibility that you will be “over improving” the property. The decision to move forward with the improvement project might resolve your housing requirements NOW but down the road, you could run into a major issue when you try to re-sell it. Depending on the price tag you have affixed to the “redo” it might not make sense at all. We see this very often in high end homes where the owner decides to put the ultimate man cave in their basements and spends close to $100,000. Hey, if you want it, great. But remember, you are doing that for YOUR OWN enjoyment. The next buyer may not want to pay you for it.
A good Realtor will point out the pros and cons of both of these decisions, but invariably, even with the slightly elevated interest rates over last year, it will still be less expensive to find another house that meets your requirements as opposed to retrofitting your existing property. If after having a serious “open discussion” with your agent, if they convince you that you should steer toward the home improvement course, that agent’s stock has or should go way up in your book. Why? Because they were looking to do the right thing by you and they weren’t focused on their immediate bottom line. This is an agent you should refer to all of your friends and family. If, on the other hand, after taking all of the whys and wherefores into consideration, you elect to find alternative housing that better meets all of your needs, you will sleep a lot better at night knowing that your agent helped you dodge what might have been a serious self-inflicted bullet.
So think about the bigger picture, before you start knocking down walls, adding headers, and getting into all of that other sexy talk with contractors.
“Hey, I wrote the book on Real Estate, literally.”
Author Brendan J. Cunningham is a New York Licensed Associate Real Estate Broker, lead of the Platinum Team at HusVar Real Estate, as well as an accomplished writer, Shakespearean trained professional actor, and podcaster.
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