This week’s Q&A column is written by Rebecca McCullough of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Rebecca at 571-384-0941 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.
Question: Love It or List It?
Answer: Whether or not you’ve seen the TV show, the “LOVE IT OR LIST IT?” question is one familiar to many. Once upon a time, that question was somewhat straightforward, but now with many supply chain constraints and limited housing inventory, it’s more complicated. Let’s break down the two options.
What if you love your house, your neighborhood, your commute, but have outgrown the space? Perhaps there aren’t enough bedrooms, you need more home office space, or the kitchen is smaller than you would like. If you “LOVE IT,” you might consider a renovation instead of a move. So, how to evaluate…?
Part of the decision will depend on liquidity. Let’s say you have equity in your house, but no cash on hand. With interest rates low, refinancing could be a great way to access funds for the remodel. You can leverage your equity and renovate your home so that you can live in it for next 30 years. If you can afford the increased mortgage payments, this is a viable option to consider.
To do it right, I highly recommend hiring an architect. Depending on how expensive a renovation you’re considering, an architect’s fees could run $10,000-$15,000 or more. It’s not always necessary, but if you’re doing any sort of an addition or significant room change(s), plans will be required for the necessary permitting. Also, an architect can help you find the optimal use of space and can create more value than you might create with your own design… it’s what they do!
I can draw on recent experience to share an example of the process. We recently hired an architect for a relatively simple 20′ x 19′ family room addition. We started the process in November 2020 and received the necessary approvals one year later in November 2021. It does not take anywhere near that long for most people, but we are in a Protected Resource Area (RPA) and have a flood plain easement as well as a sewer easement running through our yard.
In addition to support from our architect and contractor, we also had to hire lawyers to attain a Deed of Vacation of Easement. It was definitely more involved, and more costly than we had anticipated, but we went through with it in order to build out.
After 12 months of effort and finally getting the permit approved, we thought we had gotten through the hard part. We were wrong. In the same month (November 2021), we ordered our windows and doors for the addition. We knew supply chain issues were creating delays, and anticipated a 3-4 month lead time, and so we expected the windows to arrive late February 2022. Wrong again.
In the first week of March, we learned that the revised arrival date for the windows would be… December. That’s right, December 2022, 13 months after we approved the order. In this case, shortage in aluminum was impacting lead times, and our supplier punted many smaller contracts to the end of the year to fulfill larger dollar orders. You can read more about that here if of interest.
So here we are present day: our addition is framed on newly poured concrete, with Tyvek construction wrap flapping in the wind for the foreseeable future. (We are currently working on alternate solutions — I’ll keep you posted!)
Our case is unique, but not entirely uncommon. Supply chain issues are thwarting many a remodeler. It’s not uncommon to hear delays for appliances of many months, if not a year. You may already be aware of the rollercoaster of lumber prices. Contractors everywhere are advising of increased prices looming. And that’s not to mention labor constraints! Contractors are struggling to find skilled, reliable workers, and this, too, is slowing the renovation process down.
So where does that leave us in our evaluation? It’s hard to truly understand what your fixed price for a renovation will be when you start. Smart builders always suggest you add at least 10% for overages, but presently, I suggest a little more.
So maybe it’s better to LIST IT?
This takes patience as well but selling the home shouldn’t be the challenge. With extremely tight inventory and many buyers, a home that shows well and is priced right should fly off the market, maybe even garnering multiple offers. However, if you’re staying in the market, that of course leads you to needing to find a home to buy.
There are countless articles about the challenges of buying in today’s market: Multiple offers, waiving contingencies, offers being accepted sight unseen, cash with the ability to close in a week… I’ve written about it recently myself! Without repeating that analysis, I’ll simply reiterate that we don’t see the market slowing any time soon.
LOVE IT OR LIST IT?
Well, as you can see, it depends on where you want to spend your energy, your money and your time. In my experience, if the question is on your mind, it’s worth sitting down with a knowledgeable real estate agent and an experienced contractor to weigh your options and determine what’s right for you.
Rebecca McCullough has built a successful real estate business in Alexandria and Northern Virginia by providing excellent service to her clients. If you would like more information on selling or buying in today’s complex market, contact Rebecca today at 571-384-0941 or visit her website RebeccaMcCullough.com.
If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria
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Time flies when you’re having fun! The T.C. Williams High School Class of 1973 will hold its 50th reunion July 21-23, 2023 in Alexandria. All graduates and their adult nears and dears are welcome. Events include a Friday evening icebreaker, Saturday dinner dance, and a Sunday brunch. For more information: tcwilliams73.com, 770.789.3534.