10 Reasons to Sell, Not Renovate – Portland
The kitchen’s too small, the basement is moldy, or the bathroom’s downright dangerous for an aging couple. Research shows that most homeowners will struggle through these challenges, renovate as needed, and stay in their home rather than go through the process of moving.
In fact, the latest research by Zillow says that 83% of homeowners are happy where they are, and 76% would elect to spend a set amount of money on renovations than as a down payment on a new home.
Still, there are advantages to selling your home. Whether you bought in the ‘burbs but would rather live in the city, if you need to downsize or size up, or if you just aren’t sure which way to go, the following list is for those on the fence.
- Refinancing is costly too. Most people pay for renovations with a refinance or home equity line of credit. This can be a tempting offer — and banks advertise these loans heavily — because Portland homeowners who make regular mortgage payments tend to build equity quickly. The real estate market overall has gained in value year-over-year, and your home is probably worth more now than when you bought it. But it’s not as simple as going to the bank and asking for your equity back. To obtain the financing, you’ll be looking at closing costs and a likely higher interest rate than your original mortgage.
- HELOCs are risky. The Home Equity Line of Credit, or HELOC, can be a good option for funding renovations. But, just like a mortgage refinance, there are costs involved. HELOCs also comes with a special risk — you could lose your home if something happens and you can’t pay it back. By buying a new home, you’ll have a much lower chance of losing your investment. Check out our full blog post on tapping home equity here.
- Renovating? Get ready to wait. Oregon and Portland are experiencing the lowest unemployment rates we’ve had in decades, and that’s especially true in the construction industry. Great news for the economy, but bad news for people who want to get things built. Every project — from major commercial construction projects to small contractor jobs — around Portland is facing delays this year, and there’s no end in sight.
- Remodeling is stressful. Renovating or remodeling your home may look like fun on television, but the reality is so much different — especially when couples have to make decisions together under the stressful circumstances of not having a kitchen or bathroom! Also consider that one remodel can lead to another — for instance, redoing the bathroom can uncover plumbing problems that might extend to other rooms of the house.
- Renovating (usually) offers low returns on investment. Most homeowners who have done renovations will want to see a higher market value for their home when they list it on the Portland housing market. Unfortunately, the majority of home improvement projects don’t impact home values significantly. That’s because homes are not priced in isolation — your real estate agent will determine the best listing price for your home based on what similar Portland homes are selling for. Possible exceptions to this rule are kitchen renovations and energy efficiency improvements thanks to Portland’s mandatory scoring system.
- There are things a remodel won’t fix. Are you adding a deck to spend time outside, when a backyard is really what you’re craving? Will dividing up the bedrooms really alleviate your family’s need for space? Look clearly at what your actual goals are with a remodel, and you might find that a different home is what you need.
- Location is still #1. Getting to work used to be easy, but your office changed locations and now you sit on the freeway for an hour and a half each day. Or, your neighborhood used to be less busy but there’s now a condo building on every corner. Portland has gone through a lot of changes, and maybe your life has too. Make a wish list of everything you’d love to have in a neighborhood and let your real estate agent know — you might be surprised at what’s out there.
- Property taxes are going up. Over the past five years, Portland voters passed two major bond measures that Multnomah County residents are going to pay off in the form of property taxes. Property tax rates in this county are based on the “assessed value” of your home (click here for a more detailed post on what Portland property taxes are doing in 2019). Basically, homes that are worth more will pay more in taxes, and things like square footage and number of bedrooms can affect the assessed value. If you’re living in a home that’s bigger than you need, it might be time to save money on your property taxes by moving into a home with a lower assessed value.
- Buying and selling a home is easier than ever before. We won’t pretend it’s a cakewalk, but those who haven’t gone through the home purchasing and sales process in a while might be pleasantly surprised. Secure document sharing, electronic signatures, and other technological advances reduce the number of times you have to drive across town to take care of some aspect of the closing. Home shopping online is a multimedia experience with videos, 3D, and even virtual reality tours (these shouldn’t replace an in-person tour with your buyers’ agent, but they can help you know whether you want to go through the effort). Finally, average closing times are getting shorter. According to Ellie Mae, a mortgage industry technology provider, average closing times for home loans in 2018 was about 42 days. In 2013, that number was about 49 days.
- Save on commissions. Our listing agent commission is the best deal in Portland: You get a top 1% seller’s agent at a reasonable 4.5% commission rate. If you’re buying another home in the area and you use our real estate team — our buyer’s agent is also in the top 1% in Portland — you can save even more. We put people before profits and our number-one goal is that you never regret your decision to move!