You've found a nice little home and you like the neighborhood, the schools, the location and the house.
You have plans for updating it and improving as you go.
After a while you realize that the only thing your home needs to be perfect for the rest of your lives is another bedroom, or a game room, or a larger master bath. So, what do you do? Move or remodel?
The objective analysis of this choice will come to you after your call your REALTOR and get a good referral for a general contractor. He'll do an analysis and produce for you an itemized bid estimate for your project. In my area, the cost for adding a game room could be as much as $105 per square foot.
A REALTOR can also tell me that my home would likely sell for less than $105 per square foot. Furthermore, and this is important, there is a diminishing return per square foot. If your home sells for $100 per sq. ft. and you add 550 sq. ft. you do NOT necessarily add $55,000 to the value of the home. Nevertheless, adding a room to a house adds more than just price-per-sq.-ft-value to a home and your REALTOR can help you evaluate that potential gain.
Let me divert for a second here and say out loud, please, please don't turn your garage into anything but a garage? Garages are garages and rooms are rooms. Don't use the toilet for a planter and don't rent out your master closet to migrant workers, no matter how big it seems! Garage conversions are almost always a negative value characteristic.
Now, the subjective analysis is the second important part of your decision making. We started out saying this was your perfect home, neighborhood, schools, location, and yard. Those things can't always be replicated by moving. For example, if you live in a cul-de-sac, those are hard to come by and finding a cul-de-sac home that cures your other issues may be unreasonable. If you have 0.3 acres in an area where everything is 0.15 acres, or if you have a nice view, a creek, or a greenbelt you will have a greatly reduced selection of for-sale homes in any given area of town. Now, you have entered into the *Amenities Zone*!
If the amenities of your property are more dear to you than the temporal value of the home, you may be ready to do an expensive remodel. If you have looked and can't find your present home + whatever you think it is lacking, then you may be ready for a remodel. Again, your REALTOR is a vital asset here. He can tell you how much house is too much for your neighborhood, what your add-on is likely to do for the over all resale appeal of your home.
Remember, an independent broker REALTOR gets paid to be objective, not conciliatory. When folks ask me about their remodeling ideas, I first tell them what I would want as an agent selling their home. "Well Mr. Jones, I'd have a tough time selling a home with a master bedroom add-on meat packing plant." Or, "Yes, Mrs. Smith, granite countertops are a super idea and a real value-add should you ever decide to sell this home." Then it occurs to me, "And you'll really enjoy them whether you sell in 6 months or 6 years." Oh yeah, "No Mr. Jones, I'm not at all certain that a meth lab would be any better."
Well. As you can see, there are powerful objective AND subjective elements to this discussion. You and your family have to decide if you are moved to action by either. No one reason is usually enough to make the decision to remodel, build additional room(s), or pack up and move. Either way, the friendly advice of a REALTOR should be a premium asset to your plans.
Oh, one more thing, if you find yourself just wanting to wipe the lot clean and build one from scratch--just the way you want it--I can help with that too!