SHARE THIS HELPFUL ARTICLE WITH YOUR CLIENTS PDF OF THIS ARTICLE IS AVAILABLE IN THE MEMBER ZONE UNDER MEMBER RESOURCES Love it OR HOW TO DECIDE WHETHER TO RENOVATE OR SELL YOUR HOME Article Sponsored by Jody Robbins, Special to AMBA Matters Canadians, it seems, have been conditioned to constantly upgrade their homes, and the idea of living in a bigger, better space, appeals to most of us. But deciding if you should stay or go depends on several variables, such as the type of renovations you desire and the current real estate market. The costs associated with both renovating and selling your home are considerable, and need to be weighed when making an informed decision. With so much to think about, it’s not unusual for homeowners to feel paralyzed when making this decision. WHEN IT MAKES SENSE TO SELL “It’s quite common for us to see clients unsure if they should sell and move to a new community or renovate what they’ve got,” said Shane Rennie, Principle at Rectangle, a design and build firm. Putting your house up for sale is often a wise choice when it doesn’t make sense for you to sink more money into your home. You may have bought at a point in the market when additional money put into a house will end up being nothing more than sunk costs. Occasionally, the structural integrity of a house doesn’t warrant any type of renovation. “There’s no telling what you’ll unearth once you pull back the layers of a house – from mould to faulty wiring,” warned mortgage associate Phil McDowell. There are three main factors to consider before making either costly decision: 1. How happy are you in your current community? Is this location convenient for work, school and the activities you spend the majority of your time doing? 2. How much do you have to invest in a home upgrade or renovation? 3. Will it pay out to put additional money into a property in your neighbourhood? 22 WINTER 2012 Most people begin with a modest starter home under 1,500 sq. ft. Then a change in circumstance, be it a new baby, job or elderly parent moving in, prompt a move for additional space or a more appropriate neighbourhood. “People have itchy feet, and it’s common to want just a little bit more space,” explained Justin Vroon, realtor with Maxwell Southstar Reality. If you’re determined on having a 3,000 to 4,000 sq. ft. home, you’re likely better off going out to a new community. Frustrated by loud neighbours and traffic? If you’re keen to get out of your current neighbourhood, no amount of renovation can change that. And let’s be honest, many of us don’t have the stomach for renovations. If that’s the case, moving – even within your community, is probably your better option. “No way would I go through a major renovation. Not with young kids in the house,” said Springbank resident Cris Housman. WHEN IS A RENOVATION WORTH IT? Thinking about renovating before selling? Think again. Most experts agree, this isn’t the smartest move. “Reno if you plan on living in the house for five years or more. If you’re not planning on staying, do cosmetic changes only and keep your costs down,” said John McCoy, general manager of Ultimate Renovations. If you love your community and your kids are well established, it often makes sense to stay and sort out a way to make your home more pleasing and the space work better for you. Just anticipate the needs of a house shift as people grow older, said Rennie. “Kids want more privacy as they get older and kitchen design has changed so much in the last 20 years. It’s now the core of family life and serves double duty almost as a living room.” Going from a family of three to six hasn’t swayed the Kryway family to sell their house in Ranchlands. Despite having reached a tipping point, the family, well established in their community, are firmly in the reno camp. “I’m just not keen to move. I love the feel of our house, it’s our home,” said Sue Kryway. SO YOU WANT TO RENOVATE, NOW WHAT? Start the reno process by doing some research, talking to other people who are thrilled with their upgrade, and cruise the internet, looking for advice and inspiration. Think about what changes you’d like to see in your home, and which rooms you want to renovate. When you’re in the idea stage, it’s a good idea to decide on your budget so you don’t get too carried away. It’s also paramount to make sure the renovations you have planned represent the neighbourhood, said Vroon. “If you’re in an average, middle class neighbourhood, you likely don’t need to spend thousands on chef appliances and granite countertops,” he said. To avoid pricing yourself out of the market, you’ll want to keep your modifications consistent with other properties in the area. Before pimping out your place, do a little reconnaissance and see what conditions the other homes in your area are in. “It’s always about your neighbour – real estate is local,” said McDowell. No surprise here, everyone should anticipate the renovation will take longer than expected. To mitigate this, customers should be well organized, making material selections quickly and replying promptly when asked questions by the contractor. Realize that if you make changes to the original renovation plan after the fact, it will add time to the project. “Lots of people are involved in the project team, and any indecision affects the timing,” explained McCoy. And don’t forget, major renovations are disruptive and taxing. They don’t call it divorce dust for nothing. “Even when it goes very well, being displaced from your house is stressful,” said Rennie. You’ll likely want to source alternative accommodations for as many months as the project is in progress. Fortunately, some renovation companies own furnished rental properties families can move into, taking one hassle out of the equation. DO THE MATH There are two ways renovations are sold: Cost plus and all-in pricing. With cost plus, the contractor gives a ballpark estimate and bills the homeowner as invoices from the subcontractors come in. This way of calculating the renovation is almost always the least expensive Tips for Hiring a Contractor Hire a licensed professional and check with the Better Business Bureau to ensure you’re dealing with a trustworthy company. Make sure your contractor is licensed by the province, not just in your city. When they’re licensed by the Alberta government, they’ve been bonded and had background checks. Should anything go south, you should be able to get your deposit back. Ensure the contractor has liability insurance. If spending over $100,000, it’s worthwhile seeing if your renovator is a member of RenoMark™. This group of contractors, endorsed by the Canadian Home Builder’s Association, have passed stringent requirements and abide by a code of conduct, including offering a two year warranty on their projects. Be sure to have all decision makers meet with the professionals at the same time, to avoid s. conflicting requests. ences. Be sure to Always check references. mers about budget ask previous customers increases and the reason for any delays. See if the contractorr will walk le of their past you through a couple e quality of their projects, to view the ommit to work, before you commit anything. Doing so gives you a good idea of what u’ll be you’re in for and you’ll ake able to avoid a mistake before it’s too late. Hire a firm you feel g comfortable dealing with, where you won’t be afraid to bring up concerns. g When you’re working together in a longt’s term relationship, it’s or the just as important for personalities to be in synch d on as it is to be aligned cts. the technical aspects. CONTINUED ON PAGE 37... WINTER 2012 23