Considering Downsizing Your Home?

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10/21/2022

 
 

Looking to downsize your home? Here are 3 things to start getting in place to get you ready for that move. 

Declutter your house (Personal Property)

We all tend to collect way too much stuff over the years for various reasons. If you want to make your move easier, start going through your stuff and getting rid of these things you don’t need. I have a rule of thumb when I go through clothes, if I haven’t worn it for one year (excluding special occasion attire), I’m most likely not going to wear it in the future. Time to send it to my favorite donation spot. 

This same rule can be applied to your garage items. Do you really need all of that scrap wood or those extra pavers that you didn’t end up using?

How about all of your kids’ stuff still in the storage room or in their old bedroom? 

Reducing your stuff will not only reduce the stress of the upcoming move but also reduce the cost of it. Less stuff means less trips with the U-Haul or the paid moving company. 

Selling your old things can be an option too but give yourself a deadline on when everything needs to be sold by. If it doesn’t sell by that date, you must donate it. So many people hold on to things because they perceive the items to have value but, really nobody wants your old stuff. 

A decluttered house is more appealing to buyers as well. They can see how much space is actually there and it puts off a perception that the house was well taken care of while you owned it. 

Preparing the Real Property

In real estate, the term “real property” gets used often to differentiate from personal property. Real property is the land, the structure and anything that is nailed, glued or screwed to that structure. Do you need to make any obvious major or minor repairs? Or how about some landscaping improvements?

If you aren’t sure, you can start by looking for defects in the drywall and how the interior paint looks. You could always call your real estate agent to give some input, too. If you’ve been in your house for a while, you’re probably going to need to have an expert come in to clean up your walls and paint. 

With the landscaping, you can start with the grass and make sure you are on a good fertilizer schedule. You can also cut back or remove any bushes that have overgrown the space that was allocated for them. 

Lastly, how do the floors look? If your carpet has had heavy traffic, it’s probably wise to replace it. This is a judgment call and another one you could ask your agent about. 

Financing your home

The majority of people who are looking to downsize don’t want to take out a loan for their next house. There are 2 common options and which one to go with depends on what market conditions exist:

  1. Write an offer that is contingent on the sale of your current home.
  2. Use a bridge loan to cover the cost of your new home. 

When the housing market is hot with many more buyers than sellers, you would want to strongly consider using a bridge loan. With a bridge loan, you are able to make your offer as a cash offer because your lender places a lien on your current house and advances you funds to purchase your next home. Once you sell your current home, your lender receives a payoff that reduces your proceeds from the sale of your home. These loans do cost money, but are necessary in extremely hot markets like we saw the last couple years. 

Now that the market has cooled, writing an offer that is contingent on the sale of your current home isn’t a major deterrent. In this scenario, you will time up your closings on the purchase of your new home and the sale of your current home to be on the same day. This option doesn’t add any cost to you but it makes it so you have to be out of your house the same day you will be allowed into your next home. You’ll likely need to have everything in storage unless you are a minimalist and can fit everything into a moving truck. 

Downsizing your home can be a relatively smooth process with the right planning. These are just a few things to help you start thinking about in the short term before you make the move.