Is it time to think about downsizing?

Are you thinking about downsizing? Home owners who choose to downsize may do so for a variety of reasons. However, the process of doing so, and the importance of planning out your next steps, remain the same for everyone. Although downsizing is nothing new in the housing market, many home owners have never done it before! With that in mind, here are some important details to know about the process. 

Who is downsizing right for?

Any home owner can certainly downsize if they wish. However, there are a couple of groups who are most likely to benefit from downsizing. First, we have home owners who simply need less space. This usually consists of older or retired people, and often they live in a home that once housed children as well as themselves. Once kids grow up and move out, a house of this size can feel like a lot for a single person or an older couple. For this group, the big appeal of downsizing is the potential for less maintenance and housework, which can of course get harder as we get older. 

The second group of people who might downsize are those who find they need a smaller home and mortgage to fit their budget. Financial and personal situations are always changing, and sometimes a home owner can no longer comfortably afford their current property. Downsizing provides the opportunity to sell their larger home and use that to purchase a smaller, more affordable house. Smaller homes require less energy use and maintenance costs, and a small house is often (but not always!) less expensive than a larger one. 

What do you need to consider?

If you think downsizing might be the right move for you, what do you need to think about? There are two main parts of selling a house: the sale itself, and determining your next steps. Selling your home will require you to get in contact with a real estate agent, who can help you decide on a fair listing price. Your agent will also make suggestions for any home improvements before putting your house on the market. They might recommend staging your home as well, which can help potential buyers see a property’s appeal. We will go into more details about selling in today’s market later on. 

As for your next move, this really means you must decide if you are going to buy a new home. Some people downsize and choose to purchase a smaller house or condo, and others decide to start renting instead. Both options will put you back into the market, but in different capacities. Renters, of course, will not need to worry about securing a new mortgage and making a down payment. However, if you plan to buy a new home, these will be important items to consider. You must ensure you have saved enough money for a down payment, and that you know where you want to settle. You may also have to look into bridge financing. It’s important to have a clear vision for what you want your future housing situation to look like before you decide to downsize. 

What does today’s market look like for sellers?

You should gain an understanding of today’s market outlook before you put a “for sale” sign on your front yard. Interest rates have reached their peak and are not likely to rise again this year. In fact, they might start to fall later in 2024. This means buyers’ interest in the housing market might increase as the year progresses if mortgage rates begin to lower. However, the market is still likely to be busy this year, with the summer months set to be the most active period as usual. During this season, you will encounter more potential buyers, but those buyers will have more properties to explore. The power distribution between buyers and sellers is more balanced than it has been in previous years. As a seller, you will need to work with your agent to determine how to appeal to buyers with your property. 

How do you begin?

So, how do you start the process of downsizing? Downsizing isn’t too different from a regular home sale! It’s important to start by reaching out to the professionals who will be a key part of your experience. A real estate agent is perhaps your most essential guide here. If you need some help securing the right agent, feel free to reach out to us for a suggestion! 

If you are preparing to buy another home after downsizing, you can start by getting in contact with a mortgage broker. We can review your buying goals, and how your current property’s projected sale will play a part in securing a new home. 

Downsizing can be an exciting experience for home owners who are ready to move on to the next phase of their homeownership journey. In order to make your experience as seamless as possible, be sure to reach out to a broker!

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team. You can call us at (902) 482-2770 or contact us here.