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What would you do? Repair, Reno or move?
We are in a bit of a quandary with our house. The foundation of a poorly built addition (not by us) is crumbling and pulling away from the main structure and needs to be dealt with ASAP.
the space that the addition is is too small for our family and poorly laid out. We've gotten some quotes for lifting and repairing the foundation vs tearing off the addition, rebuilding bigger, with a full basement and 2nd story above...rebuilding bigger (foundation wise) is much cheaper, but has the added costs of new construction including a kitchen. However just lifting and repairing the foundation could cause structural issues in the house because if how much it has settled/sagged.
The addition would almost triple the square footage of our home.
Heres the question....would you sink $75000-100000 into the new addition or move? We love our home, neighborhood, yard etc and know we would never be able to sell our home for anything near what we owe, particularly considering the structural issues of the foundation, if we could sell it at all.
Move and hope we could sell...or stay put and bite the major renovation bullet?
If it helps we owe $48k on the house with 12 years left on the mortgage.
Re: What would you do? Repair, Reno or move?
Wow, sorry to hear you are dealing with this.
You are probably right, the house would not sell with the structural damage. It wouldn't pass inspection, and you'd be forced to repair it regardless.
So I guess the decision is remove, hoping to not further damage the rest of the house structurally, or repair & rebuild. If it were me, I'd probably do the repair & rebuild since there are so many other positives in your post (yard, neighborhood, etc).
The issues are then whether the addition you want to make will be acceptable in the city/town you live in (some are pretty strict about home sizes and zones), and then the cost & how to finance it. Speaking for myself and maybe others, the balance on your mortgage is really low, and with only 12 years left, you must have some equity in your home. Depending on your finances and job security, it might be worth it to look into the loan being for longer than your existing mortgage, ie refinancing it all over a period of 20 years versus the remaining 12. That way your payments are reduced or the same, but the improvements you make will make your home worth more.
Before pursuing all that, however, have you checked with your home owner's insurance to see if anything can be covered under your policy? What about when you bought the home, was there any sort of warranty? Did the people you buy from have a warranty for the home improvements that are now sinking you financially? These are options to pursue, if only to make sure you have no other avenue for the cost.
Good luck.
As is, even with the land, you honestly don't think you could sell the house for $48k? Wow. That just floors me. Not being able to sell it for what you paid, maybe but not being able to sell if for what you owe? I'm still having trouble wrapping my head around that.
Assuming that you can't sell if for $48k, my question to you is where are you going to get the $75 - $100k to fix it? Once you get that money & fix it, will the house then be worth at least $150,000? If yes, because you love the neighborhood so much, go ahead & fix it up.
Where did you get those estimates from, btw? Is there any way to lower the costs of repairs?
If the house doesn't come up in value, what is the point of staying, especially since you are underwater & it is too small for your family? Can you move & lose this to bankruptcy / foreclosure then start all over again?
Where we live no houses are selling at all. We paid 88k for the house 8 years ago. We've looked at real estate within 30 miles of where we live and trailers on 2 acres are listed at 175k, but aren't moving. Bigger homes are listing for 300-400, but not moving and no one is accepting lower offers. We like where we live, family is here and our business, moving isn't really an option... At least not out of the area .
We can probably low ball the cost to 55-65k...well be doing a lot of the work ourselves. I'm not sure how declaring bankruptcy on a house that we couldn't replace via building or buying because of exorbitant costs in our area.
The housing market here is about 5+ years behind the rest of the country.