Many buyers today are looking to downsize their lifestyle. If you are a current homeowner, and you are considering retirement, or you are faced with a decreased income or your children are leaving the nest, then thinking about the next step in your life soon takes priority. But downsizing doesn’t mean you have to give up what you want and need in a new home. It simply means you give up what you can and keep what you are able. Ask yourself these questions:
1. Where will you be in 5 – 10 years?
2. Do you want to be near family? Same community?
3. Does your job require you to move around?
4. Do you want to continue maintaining a home and yard?
5. Do you want to live near restaurants, nightlife, and shops?
6. How do you want to spend your weekends/free time?
The financial benefits of moving into a smaller home are of course the major reasons people decide to downsize. More and more buyers who are looking to downsize are not those that are retiring any time soon. The clients we often see today are those that want to save their money as the advantages allow you to spend money on things that you really want to purchase and matter to you at this point in your life. Look at it this way:
Reduced Mortgage Payments
Home loans take the biggest bite out of the monthly budget. If you downsize, then you drastically cut the principal balance and interest you pay on your mortgage.
Lower Utility Bill
Monthly bill payments, such as heating, air conditioning and electricity will decrease if you move into a smaller home. Interestingly enough, utility bills are usually the third biggest concern after mortgage and tax, so this is a huge incentive to those looking to cut household costs.
Less Maintenance Costs
Of course, the less space you have, normally means the less it will cost to keep a home in good order. Think about it this way: if you have always wanted hard wood floors, it’s cheaper to fill a smaller house than your current larger one. Not only that, your weekends aren’t filled with cleaning and repairing responsibilities.
Smaller Houses Easier To Sell
If you are the owner of a larger home, you may find, when it’s time to sell, that bigger houses are harder to sell and stay on the market a bit longer than smaller homes. So consider that if you purchase a smaller home, and later decide to sell it, chances are you won’t have to worry about your home staying on the market the way you would with a larger home. Smaller homes never go out of style. And chances are, based on today’s economy, they will be a hot item for quite some time.
Who doesn’t want to live a bit easier? Or, who wouldn’t like to have a little less stress in their life with a budget that is more easily manageable? Downsizing means that you live with only the items that you really need and desire. With less space and storage, you will be forced to either sell or store other belongings. In our experience, we have found buyers are thrilled to be getting rid of excess belongings that they no longer have a need for. Not only that, if you sell many of these items, you can make some decent money.
Now that we have discussed all of the positive attributes of downsizing, here are some reality checks worth considering. While for many, having less is more, meaning more free time and more money, for others, it’s difficult to live with less. You have less storage, less privacy, space restrictions and less room for guests or entertaining. There is less outdoor space, and, if you choose to live in a condo or town home, then you share the outdoors with other residents.
So it’s important to weigh the pros and cons when deciding if you should downsize. Certainly the advantages can out-weight the disadvantages, but we always tell clients to consider that this is a lifestyle change.
If you choose to downsize from your current living situation, then you need to take the necessary steps:
Figure Out What You Can Afford
If you are looking for less house, how much are you actually looking for? Estimate what you can afford each month, considering home maintenance and overall cost of living. When calculating home price, don’t forget to include closing costs and a down payment. If your budget is extremely limited, then consider moving to a less popular neighbourhood to find more affordable housing. Of course, condominiums are also a good alternative if you are certain you want to own a property.
Find Expert Real Estate Team
By assembling a real estate team that has ample experience in working with clients that have downsized, you can take a lot of stress off your shoulders. You will want a well-connected agent who is familiar with neighbourhoods you like and has experience with your price range. They can show you a variety of homes and condos so you can make sure that your transition is well thought out. By all means, interview at least three agents and ask them what their specific experience is in working with clients who have downsized. A good agent can tell you what to expect, what to look for and what areas of town fit in your budget.
Looking At Homes
Finally, when looking at homes, keep an open mind. For many clients, it’s shocking to walk through a smaller home, especially if they are moving from a property twice the size. Be organized, and take notes of each property, rating each one from 1 – 10. Ask these questions to make sure you are saving the money you need to save:
1. Is this home wired for Internet? What are the service providers? (cable, Internet, telephone). Some older, smaller homes may not be set up for Internet.
2. How much do utilities run each month? Does the house use gas or electric for the furnace, water heater and appliances?
3. How old are the appliances? Are they included?
4. Have there been any major repairs? Are any needed?
5. Is there or has there been a major problem with rodents or pests?
Finally, look inside cabinets and closets. Again, be prepared that storage is a whole other story when downsizing your Windsor real estate, but think in the long run how much money you should be saving when you make the move.