Home Valuation

Should you build, remodel or move? How do you decide which would be the wisest investment? The American Homeowners Foundation has indicated that the cost of moving is approximately 8-10% of the selling price of a home. Therefore, if the cost of remodeling is around 10 percent of your home's resale value then it is probably wiser to remodel than to reinvest in another house. Or is it such a big job that it would be financially wiser to sell your home and buy or build another house with a better kitchen? For information regarding these concerns and a workbook to help you organize your thoughts read House Beautiful, Kitchen & Bath Planner, Fall/Winter 1999, page 62.

Keeping these thoughts in mind, your kitchen remodeling project should not exceed 15-20% of the fair market value of your home. Examine how your remodel will increase the value of your home vs. those in your neighborhood. If it raises the market value far above the average, you will tend to lose this additional investment if you sell your house in the next year or two. Resale values vary from city to city and region to region. In 2001, a minor kitchen remodel, on average nationally, retains approximately 87% of its cost at resale within one year and a major kitchen remodel retains 80% or more. See the complete report 2001 Report: Cost vs. Value . You don't want to over-improve your kitchen unless you plan to enjoy it for the long haul--then you may justify an expense up to 25%.