Deciding whether to renovate your current property or move to a new home is a personal choice, but it could have consequences when it comes to reselling the property, according to Samuel Seeff, chairman of the Seeff Property Group.
READ: Selling | Should you renovate before you sell?
If you like where you stay and are not concerned about needing to recoup the costs of the improvements, then it is usually an easy decision. If, however, you are improving with the view of adding value for a later resale, then you need to consider the costs versus the value that you will be adding, he says.
Renovations involve both cost and often, significant inconvenience. Property owners must therefore decide whether they are able to accommodate both. In some instances, you may be attached to the particular property and would prefer to make a few upgrades rather than incurring the cost and effort of moving to a new home.
The property owner may also opt to renovate the existing home because it is in a convenient location, and they feel settled. A good, in-demand location also usually makes it easier to add value by improving the property.
READ: 7 Upgrades that will improve your home's kerb appeal dramatically
A crucial initial step is to objectively assess whether the projected cost of acquiring a new property outweighs the financial implications of improving the existing property. A cost-benefit analysis is the cornerstone of a sound property decision, says Seeff.
Well planned and properly costed renovations can enhance both your lifestyle and improve the value of your property. Owners should, however, guard against elaborate finishes which may not be everybody’s taste if they ever want to sell the property. Renovations also often run over budget, and the owner may not be able to recoup all the cost on resale.
On the other hand, moving to a property which offers more space or updated features and finishes might be a more convenient and cost-effective alternative. While the moving process itself involves costs such as agent commissions and transfer duties, the owner must weigh this up against the cost of renovating. It might also be that the renovations would not add the value compared to the value gained with the new property acquisition.
Many areas have ceiling prices which means that adding further costs might end up overcapitalising the property and you can therefore not recoup the costs on resale. This should then be weighed up against the cost of a new home.
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Arnold Maritz, Co-Principal for Lew Geffen Sotheby’s International Realty in Cape Town’s Southern Suburbs.
“Selling your home means parting with a space that holds personal significance, thereby impacting your daily life, family dynamics, routines and sense of stability.
Maritz shares a comprehensive guide to help potential sellers navigate the decision-making process and determine if selling your home is the right move for you:
Evaluate Your Financial Situation:
Before deciding to sell your home, take a close look at your financial circumstances. Consider factors such as your current mortgage balance, equity in your home, anticipated selling price, and potential closing costs.
Determine if selling your home aligns with your long-term financial goals and whether you're in a position to make a profit or break even on the sale.
Assess Market Conditions:
Research the current real estate market conditions in your area to gauge demand, property values, and trends. Consult with real estate agents, browse online listings, and attend open houses to get a sense of the local market dynamics.
Also assess the demand for your home in the current market by considering factors such as its location, condition, size, and amenities.
Understanding market conditions will help you make informed decisions about timing and pricing when selling your home.
Consider Your Reasons for Selling:
Reflect on your motivations for selling and assess whether they align with your lifestyle, goals, and priorities. Are you looking for more space, relocating for a job, or seeking a change of scenery?
Understanding your reasons for selling will help you evaluate the potential impact on your life and determine if selling your home is the right decision for you.
READ: Factors to consider when selling a property
Think About Your Future Plans:
Consider how selling your home fits into your long-term goals. Are you prepared to buy a new home, rent, or explore other housing options? Assess the feasibility of your plans, taking into account factors such as affordability, location, and timing.
Clarifying your future intentions will help you make an informed decision about selling your home.
Calculate Potential Costs and Expenses:
Take into account the various costs and expenses associated with selling your home, including real estate agent commissions, closing costs, repairs, and staging.
Calculate the net proceeds from the sale after deducting these expenses to determine your potential profit or loss. Understanding the financial implications of selling your home will help you make an informed decision about whether it's financially viable.
READ: Safety measures to consider when selling and letting homes
Assess Emotional Readiness:
Selling your home can be an emotional process, especially if you have lived in it for many years and have strong attachments to your home and the neighbourhood.
Consider how you'll feel about leaving your home behind and starting anew in a different location. Assess your emotional readiness for the transition and whether you're prepared to embrace change and adapt to a new living environment.
Consult with Property Professionals:
Seek guidance from experienced real estate professionals, including estate agents and mortgage brokers. Discuss your goals, concerns, and questions with them to gain insights and perspective on the selling process. Real estate professionals can provide valuable advice and support to help you make informed decisions about selling your home.
“Ultimately, deciding to sell your home is a personal and multifaceted decision that requires careful consideration in order to make an informed decision to determine whether selling is the right move for you and your family,” says Maritz.
“Take the time to weigh the pros and cons in order to maximise your chances of achieving a successful sale and moving on to the next chapter with confidence - and trust your instincts to make the best decision for your unique circumstances.
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