Buy A House Or Remodel In 2021 | Common Cents Lifestyle

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With interest rates low and evaluations as high as they are, is now a good time to sell our home and buy a house new? Do we just buy a different house and keep our existing one as a rental? Or, do we just stay in our existing home and remodel it to our liking?

These are questions that plague existing home owners.

We’re at a stage in life that we may need a larger home for a growing family. We’re in that spot a little of people are in who are already homeowners: should I sell now while home values are high and get the most money I can? But then that means whatever home you buy is also at its peak.

We also keep going back and forth about whether or not we should just remodel our existing home instead of looking for a new one.

Here’s some things we’re going to do to see what our options are, and maybe it can help you decide, too!

Sell Or Rent Out?

You could keep your home as a rental, which is a great way to start building your real estate holdings. Or, if you sell your home, you can take your equity and make a significant down payment on a new home, keeping your monthly costs low.

For us, we already know that we’ll sell this home to help upgrade into a larger home. Our reason for doing this is because we’re close to having a house paid off and don’t want to releverage. We don’t have to think about whether or not we should rent this house out or sell, that decision has been made.

Selling A Home

We’ve had a realtor come out and look at our house, maybe offer some suggestions for fixes, and see what we could reasonably sell our home for in this market, just in case we do decide to move.

To be honest, we still have some finishing touches to complete inside, like trim, before we could sell. This is an incentive to finish all these little things so the house is “sale ready”.

Buy A House

Same as buying your first home, talk with a mortgage lender first to see what they say you can afford. You’ll want a pre-qualification letter when you start looking at homes.

Don’t forget that mortgage lenders will probably show you an amount that would really max you out! Take a look at your budget and figure out what kind of payment you will really be comfortable with. Don’t forget that property taxes and insurance will also be included in your payment, so calculate that. You can call your insurance agent to get an idea. Get online to look at a mortgage calculator and determine what you would be comfortable with.

Since it has been a few years that I purchased this house, changes of income and the equity we could assume to get from this house, our purchasing power is a lot different! It’s important to know what our new price range could be.

Next, we make a list of what is non-negotiable for a new home. When I first bought this house, it was simple: two bathrooms and a garage. Now, there are extra people living here (little children) and we are in a position to be pickier. For instance, I would now prefer to have a single level home, we’d like four bedrooms (currently have three), and a flatter lot so we can more fully utilize our space. While it makes it harder to find a home, I’m pretty unwilling to move without checking these boxes as I don’t feel like moving just for the sake of it.

Staying And Remodeling

I know that it seems to be said a lot, but the real estate market is actually really crazy right now. Too many people moving, lumber prices either driving down supply or driving up the cost of new homes, not enough people selling their homes… I’m just not interested in getting into the housing market right now.

A home four doors down from us just sold for $60,000 over asking. Bidding wars are common. Homes are being sold at more than their appraised prices. It’s scarily familiar to the pre-2008 housing crash, and we’ll see if history repeats itself.

For these reasons, we’ve decided to do some remodeling to a point that we can be happy here for another 10 years. I’ve already been here 10 years and trust me, time flies fast!

Also, I think it’d be nice to have this home finished to a point that it’s turn-key for the next person, but I get to enjoy it first. It seems so common that people fix up a home and make it look really nice so they can sell, but then they don’t get to enjoy having that nice home themselves.

Closing Thoughts

I know at some point that we will find our next long-term home. I want us to be ready to pull the trigger if the right house comes along, but be able to enjoy the house we’re still in since we’re not in a rush to leave.

Do you have this debate? What made you come to your final decision?

See my post if you’re looking for a home loan that doesn’t require a 20% down payment, and even one option that can help you with a refinance!