What you need to know when downsizing your home
Regardless of your lifestage – whether you’re a baby boomer, empty nester or just someone looking for a lifestyle change – the idea of selling your family home can be daunting. The memories it contains and the comfort of staying put can be difficult to let go. However, as your life changes, so does your home and lifestyle requirements, which is why downsizing is a process that most homeowners go through at some stage.
This article explores the many benefits of downsizing, with some key takeaways that can make this process easier.
Know the benefits of downsizing
Those magical memories you’ve made in your family home? You’re going to take those with you wherever you go. Sentiment aside, downsizing comes with some very tangible benefits, including:
- Significant capital gain from selling a larger house and opting for a smaller one
- Increased cash flow from having lower utility bills
- Less money and time spent on maintaining the garden and cleaning the house means more of both spent on and with your family and friends.
Live closer to the city
The inconvenience, cost and time it takes to commute should not be overlooked. To reap the location benefits of downsizing, choose an area that is convenient to your needs and lifestyle. Somewhere that will reduce your commuting time and that’s close to culturally vibrant hubs is always a good option.
Unlock your time (and money)
The irony of downsizing from the family home is that it can actually give you more time to spend with your loved ones. With the time and money you’ve unlocked, you could also enjoy overseas or interstate travel. Options like a townhouse, villa or apartment offer higher security, allowing you to lock and leave your abode whenever you like, for as long as you like. Downsizing can enable you to live a flexible, lower-stress life.
8 key takeaways for downsizing
There are certain risks to be aware of and steps that need to be taken when starting the process of downsizing your home.
- Know that banks can be cautious of lending to older borrowers. Unless you have a large deposit for your new home, almost all borrowers over 55 will be required to illustrate how they will be able to meet the repayments.
- Beware of buying before selling. This can put unnecessary pressure on you to sell your current home, leaving you vulnerable to lower offers if the market is quiet.
- Understand the best method for selling your home. Tossing up between private sale, off-market or auction? All three methods are effective, but not all methods suit every vendor or every home.
- Engage a conveyancer. You need to do this to formalise contracts of sale and vendor statements. These need to be provided to the people who buy your home.
- Find out what you’re expected to pay in commission. Do you know if your agent is worth it? The best agents ask for around 2.5% commission, but this also depends on the value of the home.
- Engage professional tradespeople to get your property ready for sale. Understand where you need to spend a little bit of money to maximise your returns.
- Understand your competition. Make sure your home stands out amongst the crowd and give yourself a competitive edge.
- Invest in a specialist to advise and support you in negotiations. Make sure you have a ‘sounding board’ in place to help you make the right decisions when offers are on the table.
Sound like a lot to get your head around? Industry Insider provides a vendor advocacy service that can help you understand the full timeline of events. From listing your home right up until settlement, we’ll be with you every step of the way. The difference between moving on and moving in is all in how much you know!
Get in touch with the Industry Insider team to find out about our vendor advocacy service today.
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