to Renovate or sell- distinct renovations

We often have clients come to us asking for quotes to renovate and or put a home extension or top storey home addition on to their existing home.  The same clients, months later after going backwards and forwards with communication, let us know they have decided to sell their home.

We understand that in some cases, selling your existing home is better than building a home renovation or adding on a top story addition or home extension. It comes down to many different factors, for most people the key driver is to not over capitalise on the home they are currently in.

Over capitalisation assumes that the cost to do renovations or a home addition add more cost on to the value of the home than the actual home is worth- example- your home is valued at $750,000 you spend $450,000 on a renovation and extension and the value of your home after the renovation is $1,150,000. This results in spending $50,000 over the value of your home. If you were to sell your home in the next year you would potentially lose money!

However, before you do go down the selling route you should consider the below factors:

The costs involved in selling your home

Most importantly- Consider the overall cost of selling your existing home and buying a new home.

 In Western Australia these costs will include:

• Selling fees- Agency commission which usually cost 1.8-3% of the selling cost
• Marketing fees for the agent to market your property online and in print- normally around $700-$3,000+
• Moving fees- the cost of getting removalists to move all your furniture and bits and bobs to the new home
• Stamp duty- Stamp duty on the new purchase which usually costs around 4% of the purchase price
• Bank fees- If you have a mortgage there may be fees for changing the security (home) over to a different one
• Settlement agent fees on both selling and new home purchase- this is usually around $1,100+ per transaction
  
• Any modifications/renovations needed on new property
• New furniture or items needed at the new home

As an example of costs see below:
Existing homes value: $750,000 (typical value of an older home within 5kms-10kms of Perth CBD)

• Selling Fees- $15,000 based on 2% fees
• Stamp duty- $36,000 (based on a purchase price $900,000- assume a more expensive purchase if upgrading instead of renovating)
• Marketing fees -$2,500
• Moving fees- $550 for removalists
• Bank fees: $250
• Settlement fees-$2,200
• Modification new furniture etc- $3,000 (can vary significant but this would generally be a minimum)
  

Total: $59,500-selling and moving costs! 

However, costs are not the only things to consider when considering selling your home vs renovating your home.

The mental stress of moving is enough to prevent most people from selling.  It is not a small job to move all your belongings from one house to the next!  With a renovation in most cases our clients will remain in their homes while the renovation takes place (this depends on the extent of renovations).

The main reason why most people do not move is the neighborhood they live in, relationships with neighbors can go back 20-30 years in some instances and moving to another suburb or on the other side of the suburb will mean your neighbors are no longer close to you.

SO-What IS the cost of a FULL Home Renovation and Extension?

As an example, a 2 bedroom and 1-bathroom older home including the below upgrades would cost between $250-350,000+ depending on your specifications

• 75m2modern home extension to allow for new kitchen, living, dining and laundry
• Renovation to existing home including-
  • Convert kitchen to ensuite bathroom and master bedroom
  • Renovate existing bathroom
  • Renovate existing bedroom
  • Polish jarrah floor boards
  • Paint throughout existing part of home
  • Modernise or enhance character of exterior of home
• New undercover alfresco
• New grass laid and paving to drive and alfresco
• Including all plumbing, electrical, painting and high-end cabinets to laundry and kitchen in new home extension 

The key to renovating or extending comes down to not over capitalising on your existing home via high renovation and extension costs. On the other hand, many people are happy to over capitalise on their “forever” home, as they have no intention of selling in the short term, and just want to live in a lovely home designed by themselves to fit their lifestyle and family needs.

The above example is only relevant to homes in the price bracket of $750,000 or above if you were in a suburb with lower priced houses you have to be mindful that your renovation will be significantly less on cost and will more than likely only include a smaller extension of a bedroom and ensuite and simply updating the existing kitchen or bathroom.

 Conclusion- Renovate or Sell

Cost is not everything to consider when thinking of selling or renovating your home. The mental stress of moving is top of mind for most people, as well as leaving their neighbors.

Whatever you chose to do, bathroom renovation, kitchen renovation, top story home extension or whole house renovation- Distinct Renovations are always here to help with your home renovations and home extensions. 

We help lots of clients build their dream home from what they have, and we always stay mindful of their budget. We understand that over capitalising on your home is not the goal, the goal is to love the home you live in by renovating within a selected budget.

Let us know how we can help, email now.