Help a Reader: What to Do with a House

Here's a question I recently received from a reader:

I've lived in my house for 9 years and tried to sell a couple years ago. The house didn't sell because the market started to turn and we decided to not get emotionally involved and stay. Now I'm faced with some major repairs. I need to replace the roof, windows, siding, soffit, fascia and gutters. The house is 20 years old and the builder used builder grade materials that have reached their end of life. I've found a reputable contractor through a referral that will complete the entire job for $26k. I'm finding this to be a very competitive bid. The house would be completely redone after this work, both inside and out.  Problem is I can't overcome the functional obsolescence. 

My concern is I will need more space as my kids grow older. I think we'll need to move in the next 5 years or so. At this point the extra space needed is more of a want than a need. We have 3 br, 3 full baths, but are lacking a basement.  For a family of 4, one would think this is sufficient. You know how it goes, though, the accumulation of stuff over the years is ridiculous and the thought of having a home office and basement is nice.  We do love our area, though.   

In the spirit of living below your means, I will have the house paid off in 7-8 years (I'm 34, wife doesn't work) and we are on track financially. With that said, would you stay for the next 5 years, possible longer, and complete the repairs or does it make sense to "band-aid" the repairs and move. The transaction costs alone of selling and buying are leading me to stay. This is a difficult decision.

What would you advise him to do?

Comments

[Jim]

Even if you decide to move, you need to do the repairs. Most buyers will not be able to look past the repairs and will not even put a bid on your home. For those that are still interested, they will heavily discount the price and you will lose big dollars.

One question - Can you add on to your current home to give you more space?

[No Debt Plan]

Agree with Jim. You need to do the repairs regardless. Imagine you trying to buy another house and you come across one that needs lots of repairs... would you even consider? Probably not.

I would say if you love the area, try to live in your current house. Might be a good time to cut back on all of those possessions, too.

[Laura]

"Can you add on to your current home to give you more space?"

I was thinking the same thing. I would stay for now until it becomes more obvious that you need more space if you can't expand your home.

[CF]

"We do love our area though" - to me that's the most telling comment. Not that you couldn't find something else in the area, but sounds like you really like where you live, which to me is most critical. I would stay and do the repairs (which you probably couldn't avoid anyhow, as Jim stated above). Then I would do a big decluttering of the house ("the accumulation of stuff over the years is ridiculous"). Once you get rid of the excess and make the decision in your mind to stay, I would bet you'd find more options with your present house than you realize.

[Florida Luxury Real Estate]

Why not do the repairs and add an addition on the home with a family room and a deck and above a master suite. Turn the old master suite into an area everyone to do work like office space and computer space and any activities they like to do ie crafting. With the house paid off so soon and just be paying off the renovation and especially if you love the area, neighbors and schools.

Make sure to check that your investment in renovations will be able to be recoup when you do sell some day.

[Lolita]

"AC Neilson conducted a study and found the average household had $2,200 worth of unused items." Just some food for thought....that's about 8% of your repair cost that could be sold.

[Kevin]

1) Do the repairs. Most likely no buyer would want to take that on anyway. Maybe this is part of the reason it didn't sell in the first place?

2) Clean out the excess stuff you've accumulated. Do you have a garage you could store it in? How about an attic? Have a garage/yard sale and maybe that will pay for some of the repairs. What about a shed to put some of the stuff in?

You love the area, almost have the house paid off, and are in good shape financially. It sure seems like you have more "pros" to stay than "cons" that would lead you to move.

[Kevin]

Adding to my comment, maybe the "clutter" also had a factor in your house not selling - making it appear smaller than it actually is. This is pretty common if you've ever watched those "Get it Sold" or similar shows on HGTV or TLC.

[Mrs.W]

I was thinking along the same lines as the other comments. See how much it'll be to do an extension on the house in conjunction with the needed repairs; your contractor might be able to make some really great suggestions with budget in mind. Also have a chat with a real estate agent to see how much you can add on with neighborhood & property value in mind.

Have a garage sale to get rid of all that extra clutter. Or donate and maximize that those tax-exemptions for next year.

[PT]

Do the repairs. Get an appraisal. Make the decision then.

[Val]

Your house might feel crowded now, but, believe it or not, your kids will be gone before you know it, and you'll then have the financial freedom of a paid-off mortgage to travel and have some fun. Stay put and enjoy your great location and smaller mortgage!