Pay Down Mortgage or Increase Sq Ft to Sell (401k, upside, close)

[Rudydog1]

Hello...I do not know if this is the correct forum to ask my question. My home is upside down and we have tried to get out for two years. Custom built, 2.83 country setting in a water/bedroom community. Home is 3 bedroom with 2 bath, Sq footage is 1475. Our place is unique with vaulted ceiling and lots of windows and glass sliding doors, hugh outdoor deck. We have been in our home for 4 plus years and like others locally were shocked at our new assessments. I would like to retire and move on to be closer to family and it appears that my competition is newer larger homes on smaller lots, less money than I owe. We have entertained several contractors to add an all season room and punch out our kitchen to increase our sq footage to at least 1700. That cost would be around $30,000+. May question is should we forget the remodel with the "chance" someone will be more interested and maybe give us a bid or put the home up for sale and buy down the mortgage to the competitions price range? I have money in my 401K to pay for either. We do not want to stay here but do not know what else to do. Our home is not on water just close within 1.25 miles. Maybe a combination of both? Since this is a semi rural area we do not have the issue of housing tracks that are in foreclosure..Any info would be appreciated.

[DMenscha]

How much upside down?

[NinaN]

Home improvements almost never return what money you put into them. Done right, they usually return from 70-90%. I'm not sure a $30K remodel/expansion would cover that cost and whatever extra you need on the mortgage. Have you asked a realtor locally?

Also, when you say assessments, is that a local realtor or appraisor telling you how much your home is worth or a tax assessment? Tax assessments rarely have much correlation to the true value of a home.

It gets back to - ask a local realtor for input.

[Rudydog1]

Originally Posted by DMenscha

How much upside down?

Purchased for 269K, tax assessment came in at 214K last year. Best friend is local agent stating that homes that are selling similar in size etc in the high 190's to low 200'. Homes in my price range have water views or or have deeded water access. I have not had a formal appraisal, local agents are stating prices are coming in at or just above assessments.

[Rudydog1]

Originally Posted by NinaN

Home improvements almost never return what money you put into them. Done right, they usually return from 70-90%. I'm not sure a $30K remodel/expansion would cover that cost and whatever extra you need on the mortgage. Have you asked a realtor locally?

Also, when you say assessments, is that a local realtor or appraisor telling you how much your home is worth or a tax assessment? Tax assessments rarely have much correlation to the true value of a home.

It gets back to - ask a local realtor for input.

Thank you for your response, please see my other comments. Yes my friend is a local agent whom sold me this home. Since this area is a unique blend of water community homes, old and new builds, historic homes , and farm land this is going to be a challenge I think. Is there any rule of thumb as to what type of remodeling has the most value? We could possibly utilize our large garage for a "frog" addition that would not be as costly and accomplishes the same thing and maybe have more value. The room addition would destroy our large deck out back, a negative. Before spending any money I will contact a few agents that may be able to steer me in the correct direction...or at least have me more prepared to make a decision. Thanks