Last month I attended a New Year’s party that was filled with old friends. There were about 50 of us and everyone there was in approximately the same age range.
And what was the main topic of conversation? DOWNSIZING.
Some people had already done it and extolled its virtues. Others had made the decision to move ahead. Some others were nervous about the entire concept and asked tons of questions.
The truth is that not everyone will benefit from downsizing. And therefore, it’s not a “must” do. If you can stay where you are and can “age in place,” then I recommend you do so. But I also believe you MUST examine all the angles before you make your decision.
Here are some questions to consider in order to make an informed decision about downsizing your home.
1. WHAT IS YOUR CURRENT MORTGAGE RATE?
Mortgage rates are still low and have only gone up about half a percentage point recently.
Although the housing market is stable, the word is that mortgage rates will very likely go up by the end of 2017. A lower mortgage rate does two things. First, it gives you the most flexibility in the purchase of your own new home. But more importantly, it allows more buyers to be able to buy your existing property for a higher price because their monthly costs will be lower.
Remember — the higher the mortgage rate, the lower the power of your dollar. So 2017 is the right time to seriously consider making a move.
2. WHAT IS YOUR ANNUAL COST OF UPKEEP?
The beginning of the year is a good time to evaluate your budget. Take the time to analyze your run rate on top of your mortgage: taxes, utilities, fees, lawn care, repairs.
If you have to sit down after adding it all up, then it’s time to consider moving to a home that costs less to maintain. Even nearby towns and counties may have lower tax rates. Certainly, a smaller or newer home will cost less to take care of.
Even if you’re not ready to move, now is the time to take a look at your costs and see if you can trim them.
3. ARE YOU FED UP WITH THE RESPONSIBILITIES?
It’s not simply the cost of upkeep that you should consider. It’s the amount of work required to maintain your property. The larger the home, the more time it takes to keep it in shape. The older the home, the more repair work required.
It’s possible some of these chores have become too difficult to manage on your own. Or you just want to spend your time doing other things that are more fun and relaxing. If that’s the case, now’s the time to consider a change.
4. ARE YOU WELL PREPARED?
A recent NY Times article focused on a trend among baby boomers. They plan to live a long healthy life, and many are prepping their homes for active aging:
- Wider doors and walking space for the possible use of wheelchairs/walkers
- Attaching attractive bars in bathrooms for safety
- Replacing knobs and handles for ease and accessibility
Boomer buyers are also looking for one-floor living. If your current home has way too many steps and isn’t ready for comfortable living, this could be the opportunity to move to a property that already has this all in place.
5.WHAT IS YOUR HOME WORTH?
It amazes me how many people are not aware of the value of their home. Even if you have already paid off your mortgage and don’t have those monthly payments, it is important to know the current market price of your home. Become informed and understand how much equity you may or may not have. Call in an expert local real estate agent and get an up-to-date analysis. Don’t rely on hearsay from friends or neighbors.
Home values have gone back up in many parts of the country, and it might be a wise decision to sell now before the market swings back down.
6.HAVE YOUR PRIORITIES CHANGED?
Are you an empty nester? Did your life once revolve around your kids’ schedules?
If that’s the case, or you’re thinking of cutting back on your work hours, then you’ll have lots more free time. You should seriously consider how you want to spend that extra time, and if you want it to be centered on your home and taking care of it.
Perhaps you have friends who’ve done some traveling. Or there’s an activity you love, but haven’t had the chance to pursue.
You may want to make a change that frees up your time as well as your money to make that happen. For me, this is the most important consideration when thinking about downsizing.
7.ARE YOU LOOKING FOR CHANGE?
There came a time in my life when I just yearned for change. It was simply time. I wanted a different schedule, new opportunities and experiences, a chance to see the world. And I sought out a brand new environment — I downsized.
Maybe you’ve always dreamt of living in a big walkable city. Or the countryside. Or a warmer/colder climate. Closer to your kids and grandkids.
There are many ways to create change. If this is running through your mind, I recommend evaluating all of the steps above to help you set your plans for the future.
No matter what you decide, look at all the variables and become informed. I hope you have a happy and a healthy 2017 that gives you positive satisfaction. I’m happy to answer any of your downsizing questions to help you get there.