If you’re 50 or over like me, at some point you’ve considered leaving Main Line home where you’ve raised your family for one of those one-floor compact models in a 55 and older community that you believe will be more manageable. You’ve dreamt out loud about the tropics. Your spouse whined “It’s too hot in the summer,” and you countered with “How ‘bout a cabin in the mountains as well?” Then you relented, figuring with the state of your 401K you’re going to need to work into your seventies, and started to look around Chester County with your friend the Realtor. Hey, at least looking might be fun? Then she drove you twenty miles out to where the builder’s prices matched your budget.
But have you ever really thought the arithmetic through? Let’s say you believe your home is worth $700,000 but your friend the Realtor told you it would probably sell for $600,000 today, now that prices have fallen. That’s 15% less than one of your neighbors got two years ago. But that was then and this is now.
You were planning on spending less, but you deserve nice things, even if the new place is small. After adding the tumbled marble backsplash, farm sink, pot fill, six burner cooktop and granite counters, the new place came up to $400,000. Ok, you can still stuff some money under the mattress after you pay the closing costs.
But $400,000 is just the beginning. You’ll need to add $5,000 for new drapes; none of the new neighbors really wants to see you naked. And $5,000 for the moving company. You weren’t really going to call a couple of buddies and rent a truck.
Real landscaping will probably run $20,000; the builder’s just going to install a few twigs. You promised yourself you were never going to stain a deck ever again but a small patio with a symmetry pattern in segmental pavers would only run about $10,000 and then you could bring the patio furniture.
The builder leaves the walls painted white. So you cleverly assessed you’d have that painter come in and do the colors now. Without furniture that should probably run around $4 per square foot. Another $10,000.
You’ll need a new refrigerator to match the stainless steel appliances the builder threw in for free. New homes don’t come with refrigerators or washers and dryers. What a jip! That’s $3,500. And you can’t bring your antique washer and dryer. Add another $2,500 for those front load jobs in red!
Your spouse’s clothes will never fit on one flimsy ventilated shelf. You’d better call the closet guy who put the shelves in your big walk-in closet. It was about $2,500; this small one should only be $1,500.
After the yard sale, you’re going to be stuck with a lot of junk. Better figure on a dumpster and that cleaning service. After the movers load up all the furniture from home, you can’t just leave it that way. No problem, just another $1,000.
I wonder what the buyer’s home inspector will find, the leak over the garage or the breaker that trips and won’t reset? He’ll definitely write you up for those six windows that lost their seal. And the one that rotted out at the bottom. Better figure another $10,000.
Wow that’s getting expensive!
Reduced Sales Price Current Home $600,000
Deduct: Real Estate Commission $ 36,000
Transfer Tax $ 6,000
Repairs $ 10,000
Dumpster & Cleaning $ 1,000
Net Price Received $547,000
New House with Options Cost $400,000
Add in: Window Coverings $ 5,000
Moving Company $ 5,000
Landscaping $ 20,000
Patio $ 10,000
Painting $ 10,000
Closet Shelving $ 1,500
Refrigerator $ 3,500
Washer & Dryer $ 2,500
Transfer Tax $ 4,000
Title Insurance $ 2,300
Apportionments, etc. $ 1,700
Total Actual Cost of the New House $465,500
Money Actually Stuffed Under the Mattress $ 81,500
I’m brilliant. I’ve traded a $700,000 asset for a $400,000 asset, and got paid $81,500. I only lost $218,500; maybe I should change careers and become a financial planner!
Why did I want to move anyway…accessibility? Some day one of us won’t be able to climb stairs. The appliances were getting old, becoming way too expensive to run. And the new place comes with those new low flush comfort height toilets and grab bars. Oh, and the washer and dryer are on the main level, no more carting clean clothes up from the basement two floors. I wonder what it would cost to update your current home and make it accessible for life.
Install Elevator $ 62,000
Install 3 Comfort Height Toilets $ 2,200
Install Grab Bars in Our Bath $ 1,200
Install a larger powder room door $ 900
Remodel 2nd Floor Attic into Laundry $ 15,000
Replace the Dishwasher $ 800
New Granite Counters $ 13,000
Tumbled Marble Backsplash $ 4,800
Modify a Cabinet and Install a Farm Sink $ 2,600
Modify another cabinet and install
6 burner cooktop (with new gas line) $ 7,600
Repairs from inspector’s list above $ 10,000
Total Fix-up Cost to Stay $120,100
$120,100 X 68% (Average Cost Recouped*) $ 81,688
Value of my home in a normal market $700,000
Total Value of Remodeled Home $781,688
*Average of Upscale Projects from Remodeling Magazine Cost vs. Value 2008-9
But have you ever really thought the arithmetic through? Let’s say you believe your home is worth $700,000 but your friend the Realtor told you it would probably sell for $600,000 today, now that prices have fallen. That’s 15% less than one of your neighbors got two years ago. But that was then and this is now.
You were planning on spending less, but you deserve nice things, even if the new place is small. After adding the tumbled marble backsplash, farm sink, pot fill, six burner cooktop and granite counters, the new place came up to $400,000. Ok, you can still stuff some money under the mattress after you pay the closing costs.
But $400,000 is just the beginning. You’ll need to add $5,000 for new drapes; none of the new neighbors really wants to see you naked. And $5,000 for the moving company. You weren’t really going to call a couple of buddies and rent a truck.
Real landscaping will probably run $20,000; the builder’s just going to install a few twigs. You promised yourself you were never going to stain a deck ever again but a small patio with a symmetry pattern in segmental pavers would only run about $10,000 and then you could bring the patio furniture.
The builder leaves the walls painted white. So you cleverly assessed you’d have that painter come in and do the colors now. Without furniture that should probably run around $4 per square foot. Another $10,000.
You’ll need a new refrigerator to match the stainless steel appliances the builder threw in for free. New homes don’t come with refrigerators or washers and dryers. What a jip! That’s $3,500. And you can’t bring your antique washer and dryer. Add another $2,500 for those front load jobs in red!
Your spouse’s clothes will never fit on one flimsy ventilated shelf. You’d better call the closet guy who put the shelves in your big walk-in closet. It was about $2,500; this small one should only be $1,500.
After the yard sale, you’re going to be stuck with a lot of junk. Better figure on a dumpster and that cleaning service. After the movers load up all the furniture from home, you can’t just leave it that way. No problem, just another $1,000.
I wonder what the buyer’s home inspector will find, the leak over the garage or the breaker that trips and won’t reset? He’ll definitely write you up for those six windows that lost their seal. And the one that rotted out at the bottom. Better figure another $10,000.
Wow that’s getting expensive!
Reduced Sales Price Current Home $600,000
Deduct: Real Estate Commission $ 36,000
Transfer Tax $ 6,000
Repairs $ 10,000
Dumpster & Cleaning $ 1,000
Net Price Received $547,000
New House with Options Cost $400,000
Add in: Window Coverings $ 5,000
Moving Company $ 5,000
Landscaping $ 20,000
Patio $ 10,000
Painting $ 10,000
Closet Shelving $ 1,500
Refrigerator $ 3,500
Washer & Dryer $ 2,500
Transfer Tax $ 4,000
Title Insurance $ 2,300
Apportionments, etc. $ 1,700
Total Actual Cost of the New House $465,500
Money Actually Stuffed Under the Mattress $ 81,500
I’m brilliant. I’ve traded a $700,000 asset for a $400,000 asset, and got paid $81,500. I only lost $218,500; maybe I should change careers and become a financial planner!
Why did I want to move anyway…accessibility? Some day one of us won’t be able to climb stairs. The appliances were getting old, becoming way too expensive to run. And the new place comes with those new low flush comfort height toilets and grab bars. Oh, and the washer and dryer are on the main level, no more carting clean clothes up from the basement two floors. I wonder what it would cost to update your current home and make it accessible for life.
Install Elevator $ 62,000
Install 3 Comfort Height Toilets $ 2,200
Install Grab Bars in Our Bath $ 1,200
Install a larger powder room door $ 900
Remodel 2nd Floor Attic into Laundry $ 15,000
Replace the Dishwasher $ 800
New Granite Counters $ 13,000
Tumbled Marble Backsplash $ 4,800
Modify a Cabinet and Install a Farm Sink $ 2,600
Modify another cabinet and install
6 burner cooktop (with new gas line) $ 7,600
Repairs from inspector’s list above $ 10,000
Total Fix-up Cost to Stay $120,100
$120,100 X 68% (Average Cost Recouped*) $ 81,688
Value of my home in a normal market $700,000
Total Value of Remodeled Home $781,688
*Average of Upscale Projects from Remodeling Magazine Cost vs. Value 2008-9
For more information contact me by double clicking here.
Or visit my company web site GehmanRemodeling.com
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