Buy or Remodel?

So lately, the mortgage industry has been a bit unstable and volatile in lending standards and guidelines. People who work in the industry can't give a straight answer anymore about what lenders will or will not do. When I take a loan application these days, we have a moving target that we're shooting for to acquire loan funding.

So where does that leave us?

Have you been to Home Depot or Lowes lately? The last few weekends as I've gone over, the places are packed. My neighborhood has truckloads of lumber, roofers, and contractors running all over the place.

A couple of years ago people were selling their homes and moving up to bigger homes. With the mortgage and real estate markets the way they are currently, many people have chosen to remodel thier existing homes to weather the storm.

What are some things to consider?
1. Why are you considering selling/buying? Is your family growing, so you need more space? Is your job relocating you? Are you facing divorce or medical problems? Whatever the reason, be sure to weigh this carefully.

2. Do you have a home to sell before moving? Go back to question 1 and decide if selling right now is the best option. If it is, be sure to work with a reputable Realtor to help you market your home. Do not try to do this on your own in our current market. Statistics show that "For Sale by Owner" homes sell about 10% below what they should and take longer to do so. Be realistic in your asking price. If you're basing your price on the other homes in the neighborhood, chances are you are priced too high just like them.

3. What is your budget? Most of the people I know who go into purchasing a new home or remodeling start their desired project without a budget in mind. They "wing" it. Thousands of dollars are lost in this process. Give yourself a solid plan before running to Home Depot.

4. Do you know how to do the work? Sometimes doing the work can be a lot of fun, but if you don't know how to do it, you'll have to hire a contractor who will charge you double to triple the cost. Can you recoup this cost if you sell next year? If not, perhaps selling at a slightly reduced price will allow you to move to a home with the desired features you're looking for.

So, whether you are going to buy or remodel, keep these four simple truths close to you when making the decision. It is a fantastic time to buy a new home if you consider everything is on sale! In Real Estate, this really is the most affordable time to buy.

Have a plan. Talk to your advisers who can help you make the decision that is right for you and your family.

Good luck! Call me if you have any questions. 505-884-8600

Joshua