The answer to the question "Should I remodel" is YES if you are remodeling your home to make it more livable, enjoyable, friendlier, or for other emotional and practical reasons.

If you want to make the improvements to increase your wealth or increase the return on your investment, than please read this.

Let's say your house is worth $375,000 and lets suppose in your housing market at any given time there are 35 active buyers shopping for a house in that price range.You decide to make an investment of $75,000 to increase the value of your home to $450,000.

In most markets the higher the price of a home the fewer the ready, willing, and able buyers. So let's assume there are only about 20 active buyers at this higher price point. Plus, at this higher price point your remodeled house is competing with newer custom homes in newer neighborhoods.

To make things worse, at $375,000 your real estate broker will make about $20,000. At $450,000 your real estate broker will make about $24,750 in commissions. You have lost almost $5,000 already and you have no leeway to reduce your home's selling price without incurring further losses.

Should you remodel? It depends. If you are interested in improving the livability of a home, then only you can know what to do. However, if you are interested in making a sound investment then write a scenario for yourself, similar to the one above and add your numbers. The answer will be pretty clear.