WHEN TO DOWNSIZE TO A SMALLER HOME
When is the best time to downsize to a smaller home?
|At some point in our lives, most of us will have to deal with selling the home we've lived in for many years and moving into something smaller. But, giving up our beloved family home and downsizing into something smaller is always a difficult decision.
Many seniors make the mistake of waiting too long to move into a smaller home. Sometimes, they put off downsizing until a death or an illness occurs. At that point, the move may become an absolute necessity and they could be forced to sell their home quickly and move into a retirement home. Having to sell quickly is always a disadvantage for home sellers because there's no time to properly prepare the property for sale. And, as you know from my home staging program, selling a home in "as is" condition leaves lots of money on the table. Also, when people are forced to move quickly they often don't have time to find the perfect living situation and they may have to compromise.
It's easy to understand why some homeowners stay put longer than they should. We all have a strong emotional attachment to our home and the thought of making a retirement move can be very depressing.
However, it's always best to look at the positive side of life. There are many benefits to a low maintenance lifestyle. Time and money are freed up for other activities such as hobbies and travel. An easier living situation, without stairs to climb and with assistance readily available if needed, is popular with many seniors who don't want to be a burden on their loved ones.
Advance planning will greatly reduce the trauma of downsizing to a smaller home. Do your research and figure out exactly where you'd like to move before selling your existing home. Sometimes it's a good idea to move into your new living situation before selling your existing home. That way you can conveniently prepare it to sell for the highest price possible. It also makes it easier to dispose of unwanted personal property.
Many senior housing situations have waiting lists. By deciding where you want to move before you have to sell, you can choose the lifestyle option that will make you the most happy. Then, while waiting for your new place to become available, you can prepare your home for sale. You'll be ready to put it on the market when the time comes to move.
Get lots of help when you're downsizing your home and don't try to do it all by yourself. This is the time to call on family and close friends for assistance. And be sure to get good financial advice. Choose a good real estate agent who can help coordinate the sales process, assist with the property enhancement, and put you in touch with packers, movers and repair people.
QUESTIONS TO ASK YOURSELF: When you're thinking of downsizing to a smaller home, here are some important questions to ask.
HINT: It may not always be possible to time your move to coincide with the most favorable market conditions. But, if you can choose when to sell, it's better to downsize in a seller's market. You'll pay a bit more for your new home than you would in a softer market. But, since you're selling a more expensive home in the same market, you'll come out dollars ahead.
- Does your home provide the best environment for the physical needs you have?
- Are you having trouble performing the routine maintenance of your large home?
- Is it difficult finding workers and service people to help you take care of your existing home?
- Is your home isolating your from friends who already moved to a smaller home?
- Are finances keeping you from enjoying the home you've loved for so many years?
- Do you feel you have adequate security where you are?
- Do you feel you have proper access to medical care in your present home?
EXTRA HINT: Changes in the tax law effecting selling a home is a great deal for many seniors. Homeowners who have lived in their primary residence for 2 of the past 5 years are entitled to a $250,000 tax-free gain ($500,000 for married couples) when they sell. You no longer have to buy another home to take advantage of this tax break. This makes cashing out and moving into a rental retirement home very attractive for many seniors.
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