If you’re over 55 and you own a home, you have a lot of company. Over 50% of homes owned in the United States as of 2018 are owned by Baby Boomers. If you’re starting to seriously think about retirement, or just simplifying your life, you’ve probably thought about selling your house and getting something smaller.
That thought usually occurs to me on Sunday afternoon when I’m mowing the yard in the Texas heat!
Downsizing for people our age can be a good option. Easier maintenance, lower utility costs, lower taxes, less time doing chores and more time to travel or just relax, are all good incentives for wanting a smaller place to call home.
Believe me, I have given it a lot of thought myself. In doing that, I’ve come up with a list of five things to really think about before you take the plunge into a smaller home.
Here’s my list:
What’s The Real Estate Market Like?
As a realtor, this one is first and foremost with me and I am intimately familiar with current market conditions.
Right now, especially in the Houston area, we have a sellers’ market. There are a lot of people wanting to buy homes and there just aren’t enough desirable homes on the market.
As a seller, that’s good news for you! This could be a good time to sell to a young, growing family who need the space you don’t.
However, if you haven’t already bought a “vacation” home you ultimately plan to turn into a permanent residence and you don’t want to live in an apartment, by selling you become a buyer. That means you’re dealing with the flip side of the market.
Before you make the decision to sell, get really clear on where you want to move and take a look at what’s available in the price range you’re willing to pay. Know where you’re going and what it will cost you to get there before you sign a listing agreement and put your house on the market.
Is Your Empty Nest Really Empty?
Take a good look at your family situation. Do you have an elderly parent who may ultimately be living with you when they need extra care? How stable are your children’s lives and incomes?
It is more and more common for two or three generations to live under one roof, at least temporarily. Job uncertainty, medical bills, increasing mortgage interest rates, and countless other unforeseen circumstances are changing the way families live.
While you may not need four or five bedrooms right now, you could at some point in the not so distant future.
Granted, you don’t want to hang on to a home you really can’t or don’t want to keep up with for another ten years. But if you need to be a landing pad for someone in your family, keep that in mind when making your decision. If the person you’re thinking of is an elderly parent and you live in a two-story home with all bedrooms upstairs, you will probably want to sell anyway and go to a one story.
This is all food for thought.
How Much Will It Cost to Move?
I don’t mean paying a moving company. I’m talking about all the other costs associated with moving.
If you move from a large home to a smaller one, will your furniture fit in a smaller home? If not, you’ll probably have to buy new furniture. This is a good time to have an estate sale and use the funds you receive to offset the cost of anything you need to buy.
Does your current neighborhood have a homeowner’s association? If so, compare the cost of your dues to those in your desired neighborhood. If you’re moving to a new place with no HOA, you’re going to come out ahead.
Consider these fees even if you’re moving to a condo. There will probably be condo fees associated with grounds and exterior maintenance. If you’re already paying someone to do your lawn, clean your gutters, power wash your driveway, or paint your house, you could still come out ahead paying condo fees.
If your smaller home is in a more expensive neighborhood, you may be looking at higher property taxes, even though your home is smaller. Look at the property tax rates when deciding where you want to move and compare them to what you’re paying now.
Do You Want Smaller or Just Different?
When you’re still in the decision-making phase, really pay attention to how much you use all the space in your current home.
Do you have four bedrooms and only use one?
How many bathrooms do you use?
How often do you use the formal dining or living room?
Will you really need a home office once you retire or cut back on working?
If you live in a two-story home, when was the last time you went upstairs? Cleaning doesn’t count.
If your home is a major gathering spot for family and friends, you may use most of the space often enough to warrant staying in a larger home. You might just need a different layout that would suit your lifestyle.
Look for a one-story of similar size instead of two-stories.
Consider a patio home of a similar size with a smaller yard. You won’t have as much to keep up with.
Before you decide to sell, pay serious attention to your space requirements. You might just need a change of layout, not a smaller home.
Will Moving Improve Your Lifestyle?
This home purchase may be the last one you make and should put you in a place to enjoy your life. Really think about what you enjoy doing. If you’re married, think about what your spouse enjoys.
If you have always dreamed of a place in the country without neighbors, but your spouse is a social butterfly and likes being around people, you probably need to rethink a home in the middle of nowhere. If not, one of you will be miserable and let’s be honest, if one of you is miserable, you’re both going to be miserable.
Do either of you have medical conditions that require frequent doctor visits? Look at communities with easy access to medical care.
How close is the nearest grocery store? An hour each way to buy groceries gets old in a hurry (I speak from experience) so look for communities with convenient shopping.
Look at communities that will suit all your needs and wants before you commit to selling your home. And be willing to compromise to make you both happy.
Finally…Talk About Downsizing
Be honest. Talk with your spouse or partner about what you both want and need from the next twenty years or so and how a smaller home or simpler lifestyle fits into that equation. Take a hard look at where you are, where you want to be, and exactly what it will take to get there.
Consider all these aspects of downsizing before you make your decision. This is a time to look before you leap.
If all this is overwhelming, ask for professional input. Sometimes you’re just too close to a situation to make what feels like a good decision.
The first professional to talk to is a realtor. A good realtor can give you a clear picture of the market value of your home, help you put all these pieces together, and make the whole process as pain free as possible.
Then talk to a good financial planner to ensure the move makes sound financial sense. Once you’ve taken all this into consideration, you will be well on your way to the life of your dreams.
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