Making the Move That's Right for You: Downsizing

Buying a home is one of the single biggest purchases people make in their lives and for several of us, it will be a process we go through multiple times at various points in our lives. Welcome to the third and final part of our series in which we are exploring the surrounding circumstances of home buying and/or selling throughout the various stages of your life.

After years of living in the beautiful home you traded up to in order to accommodate your growing family, there will come a point where the kids move away and you'll discover that you now have simply too much space.  When that moment arrives, you'll want to embrace the beauty of downsizing.

 Downsizing: The Competitive Edge

Of the three stages of the home buying circle of life, sellers who find themselves in the downsizing stage are typically in the most advantageous position of them all.  Those in the downsizing stage have usually bought and sold a house or two by now, so they'll start the process with experience and knowledge on their side.  Often those looking to downsize have fewer restrictions on location as well, so they'll have a larger pool of options to select from.

Another huge advantage for downsizers is the amount of equity available in their current homes.  This provides you with more cash and buying power to work with when it comes to putting in an offer on a new home.  And most likely,having been through the process a time or time, your experience will make you more agile and adapt at the overall process, giving you even more negotiating power and prowess.

Downsizing: Preparing Your Home for Purchase

Being more flexible in location and home option types, along with having a larger arsenal of cash at your disposal, downsizers are set to naturally dominate and sail through the home-buying process with ease.  Even with all these advantages, there are still a few helpful hints that should be considered before diving into things:

  • Dress Up for the Sale:  Odds are that your last big move was when your children were small, so it's a safe guess to say that your house might be showing a few signs of age and could potentially be dating itself in appearance.  Even lower cost upgrades to remove the signs of use and aging decor can have a huge impact to your final asking price.  Painting always gives new life to any room; just remember to stay neutral in your color selections. As part of the staging process, consider updating your bedding and spiffing up those towels in the bathroom and the mat on the front porch.  Not up to handling the staging yourself?  Then consider hiring a professional to come in and handle the details for you.  
  • Buy Something with Walls:  Want to sock away a little extra cash from your home sale for retirement?  Consider the options of townhouses and condos as prices for these are typically much lower than their  stand-alone homes counterparts.  Another bonus...townhouses, condos and patio homes often require far less maintenance, giving you more free-time.  However, make sure you are aware of any homeowner-associations fees, dues or requirements before you make the move to one of these smaller, more maintenance-free options.
  • Mortgage Flexibility:  With more money in your pocket from your home sale, you can afford a much larger down payment.  This not only bolsters your buying power, but it will have a substantial impact on your monthly mortgage payments. Just remember that with rates still well below 4 percent, there is no real need to make a true cash purchase.  
  • Fix Up Your Look:  One of the many advantages of being a downsizer is having experience in updating or remodeling.  Stay open to purchasing a smaller home or townhouse that needs a few cosmetic changes.  You'll probably be able to purchase the home at a lower price and then update it as needed to fit your taste and needs.
  • Test-driving is Always an Options:  If you're planning on making a big move to either a new location or can't decide what newer, smaller size is really going to fit your needs and lifestyle, then consider renting for a few months.  This will allow you to truly experience what life will be like in the newer location by the beach or downtown, and let you get a first-hand feel for what life can be like in a smaller space before you make a huge monetary commitment.

Being in a position to downsize puts you in an amazing position --- you'll have more buying power, experience and knowledge on your side, and the flexibility to consider many more locations than those with children or other limiting factors.  Now is the time in your homebuying life to enter the process with confidence and embrace all the excitement for the life that awaits you in your new, smaller home.


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