Should You Sell Your House & Buy Another or Add On
- Adam Garrett
- Aug 18, 2025
- 7 min read
Today I performed a showing with a house buyer who I was introduced to today and met for the 1st time at the house where we spoke relatively briefly prior to it (though we did go through the proper buyer brokerage channel for a 1 day agreement) and where we discussed the prospect of an addition to their current house after the showing. Ultimately, I shared with the buyer that in my opinion, the buyer should lean more toward adding on than selling based on their situation as long as it's feasible and the numbers look good.
I'm a bit surprised at the lack of information online about this question because it's such an important one for so many people who are considering selling one house & buying another as well as alternatives. There are a number of factors involved with this question as it's not cut and dry, and both contractors and real estate agents/brokers will tend to be biased in their response on the issue, so I thought it'd be worth an article.
Considerations:
How much do you like your current house?
How much do you like your current house location?
If you're fine with your current house and location other than the square footage, you should generally be leaning toward an addition, but there's more to it than that:
Do you have unfinished space that could be turned into finished & heated/cooled space cost-effectively?
It's a lower cost to convert unfinished space to finished space than it is to add on (especially if you have a brick or other more costly siding house).
Garages are a common conversion here, though keep in mind that garages are very desirable and that even though for appraisal purposes, they don't tend to add much value, they add a good amount of marketability. You may or may not get your money back in added value from a garage conversion, though if your considering selling and buying or converting a garage because you don't need a garage, a garage conversion is a viable choice.
In some cases, there are other places in a house that can be converted to living space. Converting spaces other than a garage to living space tends to be more cost-effective than garages as long as not too much reworking is necessary.
How big would the desired addition be?
The higher the % difference from your current property to what you are looking for in a potential addition, the more it can make sense to buy something else. If you're only looking to add around 15% more square feet or less, and an addition is possible, it's often going to be better for you than selling and buying.
Size also matters by neighborhood. If you're already the biggest house in your neighborhood, and you're looking to make the house even bigger, it makes much less sense in terms of resale to add on than if you're the smallest house in the neighborhood and the addition would make you closer to median size.
Is an addition possible on your lot?
It's best to check the zoning ordinance etc. to see if an addition is a viable prospect before getting too excited at one. Be sure to check for:
City/County ordinance
It's best to check the ordinance for potentially prohibiting factors like setback restrictions.
Keep in mind that sometimes grandfathering & other exceptions may be possible, where the written rules wouldn't apply as strictly to you.
Check with the county/city after you think you know what's possible or not possible to see if you're tracking right or if something might be different due to grandfathering other otherwise.
Association restrictions
Associations may limit building materials, stylistic preferences, and more.
Get a survey.
You may need to get a survey before you can tell whether or not an addition will be viable.
You may need to get a wetlands delineation if the wetlands map looks like you have wetlands on your property.
What's your current interest rate if you have a mortgage?
The lower your rate vs the prevailing rates, the more that an addition rather than a sale and purchase makes sense, especially if mortgage interest rate projections aren't trending toward a rapid decline.
How much equity do you have at your house?
The lower your equity position, the less that selling and buying will make sense.
What are your options for paying for an addition?
If you don't have cash, but have good credit & have plenty of equity in your house, a home equity loan is a good option to help finance an addition at a lower rate than you would get most likely with a personal loan.
If you don't have cash, and want to consider your options other than a home equity loan, here are some alternatives for financing repairs or renovations to your house.
What are your options for paying for another house?
If you have the cash for an addition, but have poor credit & would need a mortgage for a purchase, your options for that purchase with a low credit mortgage are reduced. Some options to purchase, like NACA, don't consider credit score, though they still consider credit factors, and the process is more time-consuming than typical. With NACA, the costs for the interest rate tend to be lower, and there are no closing costs, though there may still be some fees. Be sure to read reviews if opting for something like NACA.
How would a move impact you and your family?
If you have kids, moves tend to be harder on the family than if you don't, especially if moving a long distance away and needing to change schools due to the move. That said, moves are stressful either way. If you want a new house for reasons other than just the extra space, a new place could reduce stress in the long run.
Would a shed or other storage solution solve the issue more cost-effectively?
A shed or even a storage unit in some cases can more cost-effectively solve a space issue if all you're looking for is storage space, especially if that space doesn't need heating nor cooling. Some owners will add built-in storage above certain areas of garages. Some owners will add a floor to an attic that doesn't have one.
If on septic and adding a bedroom, can the septic handle it?
Sometimes owners will add a bedroom even if the septic isn't capable of handling it, but it's best to know up front what it's designed to handle, how long it's expected to last, and if the septic would be required to be upgraded based on local code or not if you want to add a bedroom. If you end up adding a bedroom despite the septic not being able to handle it based on design, it's best to disclose that if you ever sell as a material adverse fact.
Consider the market if thinking about moving to a completely different area.
A market in one part of the country can be trending down while in another part of the country it's trending up. The housing market in Hampton Roads is different than the housing market in Miami.
Are there neighborhood or area qualities you'd really like that you don't currently have?
Whether your neighborhood has high crime or whether you're looking for a place with a pool within walking distance, if the significant cost of sale and purchase is worth it to you, it could help shift the tide to selling and buying rather than adding on.
Related:
Do you have a townhouse or condo?
Especially if you have a condo, and to a lesser degree if you have a townhouse, in cases where an addition is possible (which is pretty rare unless not in an association, especially w/ condos), there are some strong reasons to shift to single-family detached when considering that single family detached properties tend to appreciate more than townhouses and condos, especially condos.
Have other financial elements of your current house's situation materially changed or are they about to change?
If a trailer park, junk yard, or something else that you think is going to hurt your property's value once completed is being built next door, it increases the impetus to sell before that happens. The same is true for flood zone projection increases, in particular, projections to shift from X500 to AE zones for properties located in hurricane evacuation zones.
Are you about to retire or about to become an empty nester?
If you're about to have a reduced income, be sure to consider what your income will be when that occurs. Budget accordingly.
If you're about to be an empty nester, it might be worth holding out until that happens, even if things are a bit squeezed in the meantime.
Tips:
Run the numbers.
It's best to see which would be the best fit for you based on varying interest rates, costs of sale, cost of purchase, cost of addition, and other financial & qualitative factors. Approximating in your head without running the numbers often leads to the wrong decision.
Get multiple quotes on an addition.
Because the true answer to this decision depends so heavily on numbers, it's not a bad idea to get 5 or more quotes from various builders and contractors about adding onto your house. Consider also including renovations, repairs, and other changes regarding your house.
See what houses are out there.
If you create a search with an agent or even if you do a search on a public site like Zillow, and you see a property that's clearly undervalued, and factors are in play where your buyer's agent suspects it can sell under appraised value, it can change the numbers and in some cases tip the scales in favor of a purchase. That said, often well-marketed properties that are under value will go for above asking price.
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