Commonly overlooked in the "should we renovate or should we move" decision
process are the "hidden" costs associated with moving.
If you are happy with your current location, school district and all the other
things that make a house a home, but you need a bit more space or want a more
updated home, make sure you consider the cost of moving before you decide to
pack up and sell your home. You might find that the cost of moving would pay
for the majority of or all of your renovation expenses!
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Common Moving Related Expenses:
- Realtor Fees, typically 6% of the selling price of your home
- Real Estate Transfer Tax varies by Township. For example, Radnor Township is 2.5% and Philadelphia is 4% of the selling price of the home. Usually this fee is split between the buyer and seller.
- Points on a new mortgage. Commonly 3% of the new mortgage.
- Cost of a moving company
- Title insurance on the new property
- Other costs associated with closing: appraisal fees, mortgage application fees, survey fees, attorney fees, endorsement fees, notary fees, etc.
- Township or City mandated improvements to sell your home. Most area municipalities require home sellers to repair the "public" areas of their properties, like sidewalks and curbs, prior to the transfer of a home to a new owner. Many also require sellers to update their home for certain building codes such as handrails, smoke detectors and other safety issues.
- Decorating costs to help you sell your current home. Realtors will often recommend that sellers paint, clean up and decorate prior to putting their home on the market.
- Decorating and improvement costs at the new home. Most home buyers find that they want to make some improvements to their new home. Don't underestimate the cost of even minor items like new curtains, painting, landscape work and other improvements that will make the new house your home.
- Temporary housing or temporary storage may be needed if you can't perfectly coordinate your sale date and purchase date.
For example, assume you are selling a home in Philadelphia for $400,000 and purchasing a new home in Radnor Township for $550,000. The following would be an estimate of the typical transaction costs associated with the move.
| Current home sale-related costs |
| Commission to realtor, 6% | $24,000 |
| Philadelphia transfer tax, one-half of 4% | $8,000 |
| Moving company costs | $5,000 |
| Misc. decorating expenses to market house | $2,000 |
| City mandated sidewalk repair | $750 |
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| New home purchase-related costs |
| Radnor transfer tax, one-half of 2.5% | $6,875 |
| 3 points on a $440,000 mortgage | $13,200 |
| Title insurance | $3,046 |
| Misc. closing costs. Appraisal, document fees, legal costs, surveys, notary, application fees | $3,000 |
| 1st Year new homeowner costs (per National Association of Homebuilders 2003 survey) | $6,500 |
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| Total cost of move: | $72,371 |
Obviously, your personal circumstances may be different, but considering how expensive that moving can be, it pays to crunch the numbers before you jump into a move. Use this example as a guide and feel free to contact us if you have any questions.
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