It happens to the best of us! When we decide to buy our first home, we go for the gusto looking for the biggest house on the block. However, as the months and years of those monthly payments go by we think how nice it would be to downsize not only the house but maybe even those payments. Personally speaking, as the kids starting to grow up and leave, it seemed only natural to want to downsize.
Your reasons for downsizing into a smaller home could be many but before you do, consider these factors first…..
What is Your Why?
Because going through the sale of your home is so much work involving a ton of major decisions it’s vital to have a solid reason why you want to downsize. What’s your motivation? You would hate to get wrapped up in the whole process then regret your move later. Here are just a few reasons why people downsize:
- Their current property is too big.
- They have unused rooms.
- They want to reduce their debt.
- They want to buy a second home or vacation home.
- They want to live closer to family members.
- They need a simpler life.
- They’re going through a divorce.
Reasons for moving anywhere is always a personal but as long as you have your “why”, you’ll always be comfortable with what you’ll go through on your way to getting there.
Assess How Much “Stuff” You Have
Another thing that we home owners are guilty of is accumulating STUFF. Lord, it’s like junk trolls come in during the night and instead of taking things, they leave things. Tack on a few years and you could literally self-support a corner of a flea market!
If you’re going to downsize, you will more than likely want to get rid of a lot of your current possessions. Walk around your home to determine what you’re not currently using or haven’t used in months. Do you really need all of those books? Are you really going to lose 50 lbs so you can get back into your “skinny” clothes?
Now is the time to be real with yourself. Just remember, the more you unload now, the less you’ll have to unpack into your new house.
Where Are You Going to Move?
If you have gotten this far into the process of wanting to downsize, you probably already have an idea of where you would like to move. If not, don’t dilly dally! As a Realtor in South Alabama, many of the home buyers that I work with are of retirement age and are moving here from the north. They have a plan and they’re making it happen. Almost all of them are downsizing too.
You may be downsizing across town or across the country but whatever the case, do your due diligence. Not only is the geographical location important but also consider where you want to move in a particular area. Do you prefer rural living or want to be in the mix of things downtown? Does living near a park sound intriguing or how about the beach? Condo or single family home?
What About Spare Rooms?
Some of us love the idea of having house guests over to stay or even having an available room in case one of the kids come back to live. Others purposely downsize to make it impossible for any of those scenarios to happen. Whatever you may be thinking, consider the following reasons for having a spare room:
- Your child may have a job change or get a divorce.
- You wouldn’t want your best friend from back home to stay at a hotel.
- You want to have a place for your grand kids to sleep.
- You need space for your hobbies
Don’t let yourself have so much tunnel vision that you forget about situations that could come up. While it’s totally reasonable for a couple to downsize from a 5 bedroom house, they may consider downsizing to 3 bedrooms rather than a 1 or 2 bedroom option.
How Would It Work Financially?
One of the top reasons why people downsize is because it would be cheaper. Chances are that a smaller home will cost less than a larger one and of course the electric bill will go down, right? On the other hand, downsizing doesn’t necessarily mean that it would be less expensive to live.
We all know that a 1,500 square foot home costs quite a bit more on the west coast than it does in Alabama so downsizing may not do you any favors to your pocket book in this case. Also, if housing costs are more in an area, more than likely the overall cost of living is as well.
Does it make sense to downsize, financially speaking?
How Much Would It Cost to Replace Your Things?
If you’ve made the decision to downsize into a smaller home, you probably won’t need that sectional sofa that seats 12 or the dining room table that caters to 8. So, as mentioned earlier, selling or giving away the things that won’t work in your life now makes total sense. But, you are still going to need a place to watch TV and somewhere to eat. As you get rid of most of your un-needed possessions, you’ll likely want to replace them with a smaller version of those things.
When you do get into the mode of reducing your stuff, it won’t stop with furniture either. So, you’ll have to consider what it will cost to replace not only the couch but also things like bed linens, towels, dishes, decor, plants, pots and pans. This could get costly on the other end of your move so be objective and think it through.
Will the Proceeds of Your Home Sale Cover Your New Expenses?
How much you get at the closing table from your old house is determined by a number of factors like:
- how long you’ve owned the property
- your original down payment
- current market conditions (buyer’s market or seller’s market)
- long term appreciation
- the desirability of your neighborhood
- school system
- your property’s condition
If you have owned your current home for a few years then home prices have likely increased which will allow you to receive a nice check at closing. On the other hand, they have also probably increased in the area where you are going to move as well. Have your Realtor work up a net sheet for you so you’ll have a good idea of what your proceeds will be on closing day. Also, since you already know where you’ll be moving to at this point, your Realtor should be able to figure this out for you too on the buyer side.
Is a Storage Room a Good Idea?
“Oh, I’ll just put that in storage.” That sounds familiar, right? Yes, deciding to downsize is one thing, but sell my collection of deer heads? Are you crazy? While it may sound reasonable to just put everything that won’t fit in your smaller home into storage, we both know that it’s probably not a good idea. Most of us suffer from wanting to hang on to things that haven’t seen the light of day in months or even years.
What’s the use? Why hang on to it? Why spend extra money each month on a storage unit, only to have your things sit there and gather dust? The choice is yours of course, but now is the best time to sell or visit Good Will.
Don’t Recycle the Cycle
So, if you’ve done the smart thing by eliminating everything that won’t work in your newer, smaller home but now you feel the need to spend some time on Amazon. Resist the urge to go overboard filling up your new place with things you won’t need in 60 days. You’ll have less space to fill so savor the openness!
Pass It Off to Friends and Family
As you can see, there is a theme going on here. How much personal property you have plays a huge role in downsizing. I remember the first time we downsized. The children were becoming adults and leaving the nest so there was no reason to have a 7 bedroom house anymore. We had 5 garage sales and eventually allowed people to just walk through the house and making an offer on what was left.
What you could do first though is to offer your friends and family dibs before opening up your goods to the public. Your cousin may want your popcorn machine that you haven’t looked at in 5 years. There is no time like the present to up-size your family’s clutter while you downsize your own.
Remember the End Goal
After making the decision to downsize, there will be a thousand thoughts running through your head and dozens of tasks to complete. Keeping your “why” front and center will help with the feeling of being overwhelmed. Focus on the end goal, whether it’s being close to the kids or having a place just big enough for you and your significant other.
Additional Resources for Downsizing:
- Downsizing Mistakes to Avoid – Bill Gassett
- Four Tips to Downsizing – Chris and Karen Highland
- Tips to Remember When Buying a Retirement Home – Debbie Drummond