If you’re tired of all the upkeep and maintenance of a large house and you’re looking to save some money, you may be ready to downsize. Downsizing comes with many advantages — lower energy and utility bills, smaller mortgage payments, and no more climbing a ladder to clean the gutters.
However, when downsizing, there are a few obstacles you may run into. So before you sell your home and head off to a retirement community in Florida, here is everything you need to know about downsizing.
How do you know when it’s time to downsize?
You may decide to downsize once you retire. Or perhaps all your kids are grown and out of the house. You might also choose to downsize if your financial situation changes and you simply cannot afford a large house anymore.
Whatever your reason, deciding to downsize can be a difficult decision. You’ve likely lived in your home for years, creating memories, raising kids, and building a life. However, if you’re considering downsizing, you don’t want to delay the process for too long.
Making the Decision
By waiting too long to downsize, life can get in the way and decide for you. Many end up downsizing because of an illness, death, divorce, or financial change. Undoubtedly, a terrible time to be making major decisions about your living situation.
You don’t want the decision to be made for you — by life events or by your grown children. Rather, you want to have the time and space to consider what downsizing will look like for you. Do you want to live in a smaller house? A multi-generational home to be close to your kids? Would you love to move to a condo complex? Is a retirement community the right place for you?
Before you downsize, consider what you’d like your daily life to look like. Give yourself enough time to imagine what type of home and lifestyle you’d like to have. Again, you don’t want to wait too long or you may be rushed into a decision you ultimately regret.
Save Your Energy
Moving takes a lot of energy — both physically and emotionally. You have to pick over your possessions, pack everything up, and load and unload it all into your new home. As you get older, your mobility and energy may dwindle, making a move more stressful and difficult.
Outside of the move itself, you want to have enough energy and mobility to enjoy your new home and lifestyle. You don’t want to move to a retirement community that offers golf or a pool and not have the physical ability or energy to enjoy it.
Where do I start when downsizing?
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The first step in the downsizing process is to decide on the type of lifestyle you want. Many who don’t take the time to consider what kind of home or experience they want, often end up living in a situation they’re unhappy with.
For instance, moving from a house to a condo complex with an HOA can be a tough transition. Where you once had the autonomy to remodel your home at will, now you may not even be able to change paint color without approval. Or, if you move to a retirement community, are you okay living with others only 55 years or older? Will your grandkids be able to visit, or is there an age restriction?
When downsizing, you don’t want to leave behind the activities and lifestyle you love. If you love the outdoors and open spaces, downsizing to a condo in the city may not be right for you.
Packing is a Process
Packing will always take longer than you think. A move is usually all it takes to realize just how much stuff you’ve accumulated throughout the years. Packing up a lifetime will take more than a few days. You want to give yourself at least a month to sift through all your possessions and pack them up. Getting rid of belongings you’ve had for decades can be an emotional process. Give yourself time to grieve and work through those emotions.
Packing up an entire home is an overwhelming task. Start by breaking it down and tackling one room at a time. This way, you stay organized and can more easily picture where your belongings will go in your new home.
Other considerations involve the moving process itself. Decide if you want to rent a truck and move on your own, or if you rather go with professional movers. If you decide to go with a moving company, do your research and plan well ahead in advance. Many times moving companies will have limited availability or higher prices during certain times of the year.
Before you move, you also want to make sure you remember to change your address so you don’t miss out on any important mail or interrupt any automated delivery services you use.
Timing Your Move
Simultaneously selling your home and buying a new home is stressful. You want to try to time your move so you don’t have two properties at once. Alternatively, you also don’t want to find yourself in the situation where you’ve sold your home, but your new downsized home isn’t ready to move in yet.
Work with a real estate agent to help you time your move. Your agent can help you create a plan so your move goes smoothly.
Downsizing Can Be Emotional
You’ve put a lot of work into your home. You may have remodeled or planted a beautiful backyard garden. Essentially, you created a home you love. Selling your home can be challenging and you may be surprised by your emotional response surrounding the sale.
For instance, you may not want to sell to someone who will tear down your property or alter the home considerably. Granted, while this can be upsetting, you don’t want to discount a buyer’s offer simply because they may make significant changes.
You’ll also likely feel attached to your home because of the memories you’ve made. Naturally, leaving a place in which you’ve built a life can be difficult. Your children may also have opinions and strong emotions towards the sale of your home.
Depending on your relationship with your kids, they could be helpful or pose a hindrance. Your children may not want you to sell. Or, one of your kids may want to buy the home from you. Either way, you’ll want to have a discussion with your kids so they’re emotionally prepared when the sale does happen. You also will want to give your kids a chance to take certain items from the home to keep as memories.
What do you take with you?
Because you’re moving into a smaller space, you simply can’t take everything with you. A good place to start is to divide the items and furniture you use every day from the items you only use occasionally or are purely decorative. For example, you may take your smaller kitchen table with you but leave the formal dining table and chairs behind.
Be realistic about which furniture and items you keep. You don’t want your new home to feel cluttered or suffocating because you couldn’t bear to part with a beloved couch or bedroom set. For the furniture you won’t be able to fit in your smaller square footage, consider donating or having a yard sale.
You also want to make sure you’re not too cavalier with giving away your belongings. As saving money is a key objective for downsizing, you want to keep as much as possible from your old home. You don’t want to have to buy an excess of new furniture or appliances for your new home.
And of course, leave room for the more sentimental items you don’t want to leave behind. If you know beforehand which items you won’t want to part with, you can factor this into the decision process, narrowing down which type of place to downsize in.
What are the costs of downsizing?
One of the biggest advantages of downsizing is the potential savings. Your utility bills will be lower and you won’t have as many costs for maintenance or repairs. However, you want to be aware of the possible expenses you will have when downsizing.
Depending on the area you’re moving to, your cost of living could increase. Living in a popular metro may be more expensive than where you lived in the suburbs. And if you’re moving to a condo complex or retirement community, factor in the possibility of HOA payments.
Additionally, one of the biggest expenses will be your down payment and a new mortgage. Going from a paid-off home back to a monthly mortgage payment can be a bit of a transition.
Other costs include potential repairs to the new home as well as any repairs to your old home. Before you sell, you may need to spend money repainting, fixing minor issues, staging, and your biggest expenditure, agent fees. As the seller, you’ll be responsible for covering your agent’s and the buyer’s agent’s commission fees which can add up to around 6% of the sales price.
And keep in mind you’ll also have additional expenses such as closing costs and moving costs such as hiring a moving company or moving truck.
How to Save the Most When Downsizing
To make the most out of downsizing, it’s best to work with an experienced, local real estate agent with UpNest. Your agent will utilize their network and expertise to market and sell your home for the highest price possible. Your agent can also help you look for your ideal home to downsize, working to get you the best deal so you can keep more of your sale earnings.