There are definitely aspects of planning that are less sexy than selecting materials and knocking down walls, but no less important. Money is the elephant in the room when doing a remodel. The other biggee is where we live and what we do with our stuff. While this has been the most stressful area so far, it looks like everything will pan out (knock on wood).
Tell Me Why
The first question we had to deal with was whether we should even undertake a remodel in the first place. We’ve been in the house for 7 years and are at a place where we could spend a little more than we are on our living situation. So do we move to a house with no problems or fix the problems in our house? This was an easy question for us. We love our neighborhood. Accordingly to Walk Score, our score is 92, or Walker’s Paradise. We’re close to work, convenient to recreation and transportation, and can walk to just about anything. We have great neighbors too. We just wanted a better house in our same location. Our house has good bones, it just needs some changes to better fit the way we live. So our decision was to improve the house we had.
Money, Money, Money
Like most people, we are paying for our remodel through a combination of savings and an equity line of credit. It’s always scary when you choose to take on debt. What if? What if? What if? Some fortuitous planning made it a little easier to take the plunge, but it has not been without bumps in the road.
First, we recently started seeing a financial planner for reasons other than this project, but of course, it all relates. We simply told him our remodeling budget, and he calculated that we could afford it and when we would have it all paid off. We still have to stick to our budget, but it is a relief to know a professional has looked at our situation and determined that we will not have to eat Top Ramen for the rest of our lives. Maybe this year though.
Second, we refinanced the house a few months ago, which gave us a recent appraisal and a much lower interest rate. The appraisal gave us the confidence to go into the process, knowing we had built up equity in the house. Then things went a little haywire.
While we could have used our 6-month old appraisal and borrowed less, we wanted to be cautious and gives ourselves a cushion. So the bank did a new appraisal. Which came in nearly 20% lower than the one from 6 months ago (!!!). I know the market is iffy, but come on, it’s not that iffy. We thought there were some serious issues with the appraisal (like using foreclosures as comps–which is not correct, according to my real estate law colleagues–and blatantly ignoring houses within a couple of blocks in favor of those in a different neighborhood), but you don’t have much leverage in that situation.
As much as we wanted to tell the bank to shove it and stomp off in a blaze of glory, it isn’t really practical when you need their money. That was really hard for me. We tried to focus simply on the bank’s offer of amount (which is enough if we stay close to our budget) and rate (which is super low) and decided to continue with that bank rather than start over with another one. I’m still not moving the rest of my money over to said bank. So there.
Lessons learned from the crappy appraisal: (1) Take the money and run. (2) Don’t assume a new appraiser will pay any attention to a recent appraisal. (3) Don’t believe anyone who says the appraisal is just a formality and the new one should be at least as high. (4) Hand comps to the appraiser when he or she comes to your house because all that information is available to you on the internet and you understand your neighborhood better than an appraiser from another city. (5) Proactively argue your home value before or during the appraiser’s visit; once it’s on paper, no one will change anything. (6) Don’t do an appraisal in late winter if you don’t have to.
Movin’ On Up
Even though large parts of our house will be untouched by this remodel, critical parts are being completely redone, namely, the stairs and main bathroom. We originally hoped to stay in the house during the remodel because we thought it would be easier and cheaper. However, it became clear that staying in the house would be pretty unpleasant and would prolong the project, so we agreed to clear out. For 5 months. Ack!
Part of the difficulty in figuring out where to go is that we have two cats, Mikey and Arnold.* Shockingly, not everyone adores little furry creatures as much as we do. Let’s remind ourselves how cute they are.
So you see, we couldn’t ship them off to a kennel for weeks or months. The other issue is getting set up in another place. Do we need furniture? Do we need to hook up and disconnect utilities, phone, etc.? Ugh. It was getting to be a large project on its own, and we have plenty of other things to deal with.
We’d been asking around about sublets and housesitting gigs and got lucky! A co-worker of mine is going on sabbatical for two months this summer and was looking for a housesitter/petsitter. Sign me up! That left the first 3 months to deal with. Friends of ours are in transition between time spent working abroad and returning home, which means their Portland home is vacant. The timing worked out for both sides for us to be in there for the short term and so they could start moving back in now. Plus, we may be able to leave some furniture there while they are getting theirs back. That gives us just enough breathing room to be able to shove everything else against the walls, in our garage and in our neighbor’s garage (see why we don’t want to leave our awesome neighbors? The ones on the other side gave us moving boxes too.). Huzzah!
I’ve made it sound easier than the time spent on thinking about and discussing money, where we’re going to live, and what we’re going to do with our stuff. Having it largely sorted out is a HUGE relief!
*For those who are a little behind, yes, Sybil (pictured on the banner) is no longer with us. The house was as much hers, as it is ours, and we can’t deny that we had her in mind when thinking about changes to the house. Now, Mikey and Arnold get to enjoy what she contributed to.
So this doesn’t become a blog about cat pictures, here are some shots of where we are right now:
I’m sure in the time I’ve been at the computer, M has demo’d the rest of those walls in front of him. Later this afternoon, we’ll start moving stuff over to the house in NoPo where we’ll be staying. I expect we’ll move out completely next weekend.