Home Downsizing London Ontario
Downsizing in London Ontario To a Smaller House, Apartment or Townhouse/Townhome
Downsizing a one-floor house, a one-floor townhome or townhouse, or an apartment condo requires well-thought-out steps, including financial planning and paring down your possessions. Social and health considerations also play a role. Maintaining and staying in a home that no longer meets your needs and lifestyle can be a financial burden or mobility issue. It prevents you from travelling or doing any number of things you have ever dreamed of doing.
You’ve got this far in your life and have managed to handle the good and the not so good; here are a few ideas that may help.
Calculating Finances & Staying Within a Budget
A breakdown of expenses, such as mortgage payments ( if needed), property taxes, condo fees, utilities, and transportation, is essential. Downsizing will reduce housing costs, property taxes, and possibly future maintenance costs. Ensure your ideal home matches your current [and future] budget while having a vision of the lifestyle you want to keep.
With income reduced to your pension and other investments, you may have to adjust to a more modest lifestyle. A smaller home will cost you less, but there may be additional costs you need to factor in. Are you overestimating the worth of the home you’re selling? What will the sale price buy you for a retirement home? Get a complete list of what you need to consider, and weigh it up against your income to get a balance that you’ll be happy with.
Plan a realistic timeframe and your housing needs.
Think about where you want to live, what amenities you require, and who you want to be near. Spend time researching the area and property. Don’t go more significant than you need. In contrast to downsizing too much, you can also not reduce enough. You can imagine the kids and grandkids will visit all you want, but don’t go for a home that’s bigger than you need to accommodate potential visitors. One spare room and a fold-out sofa could probably adapt to most needs and still keep your home manageable.
The same goes for lot sizes. Consider how much yard maintenance you will be able to do as you advance in years and the costs if you have to hire someone to mow the grass and weed the garden.
Planning for a quiet life outside the city might make sense on the one hand, but it puts you further from essential services when you’re older and usually further from public transport if you’re unable to drive because of your health. The location considerations you had as a family or younger may not be the same as you get older. Where ever you choose a location, make sure you plan so your future needs are met.
Downsizing can create more time for doing the things we enjoy most. When we consider the amount of time many of us spend cleaning and maintaining our home, the opportunity to increase our leisure time is very appealing. My clients tell me that they feel more relaxed and free after rightsizing and spend more time with friends and family.
Focus on the positives
Moving to a smaller home may make it easier for you to travel, participate in interests and activities, and enjoy a new sense of freedom. Embrace downsizing as an adventure, an opportunity to meet new people and explore a new phase of your life.
Ask yourself, “Is managing the family home holding [me] back from enjoying life?”
Hidden Costs of Downsizing to a Smaller Home
For older Canadians who have watched their retirement savings shrink over the past few years, downsizing seems like a no-brainer. Wouldn’t moving to a smaller home mean lower mortgage payments and living costs? Well, maybe — but experts agree that several factors, not all of them financial, make each case unique.
“Your biggest expense is your home,” says Steven A. Sass, program director at The Center for Retirement Research. “We sense that people who are retiring and financially strapped should think hard about downsizing as a way to improve their income.”
Using the rule of 4 percent is a rule of thumb a financial planner uses to calculate how much retirees may safely withdraw from their savings annually; Sass says $75,000 in the bank could add $3,000 of income per year.
The Center calculates the cost of taxes, insurance, utilities and upkeep at 3.25 percent of the home’s value — a figure that will also vary depending upon where you live, Sass says.
The cost of transportation and gas should be considered. “How far will they be from the places they need to go — the grocery store, doctors, and hospitals? Will they be able to access public transportation?”
“A lot of older adults move out of the city without thinking about what happens when they can’t drive anymore,” says Julie Gray, a certified geriatric care manager who is a principal of Aging Wisdom, a care management service. “It’s human nature to think that things will stay the same, but as we get older, there are a lot of things we need to think about — not only monthly expenditures but physical changes and how those needs will be met most cost-effectively.”
On the other hand, she says, changing medical needs may make staying in a place too costly to be a practical option.
Particularly in older homes, Gray says, a remodel to widen doorways for walkers, make bathrooms more wheelchair-accessible or accommodate a live-in helper could be very pricey. “Seventy percent of those over 65 will need some long-term care service eventually,” she says, “so it’s a good idea for older adults to take a look at their homes and see if it can meet those needs.”
The Secret to Pricing Your Home to Sell
Contrary to popular belief, when selling your home, value is determined by one thing and one thing only – what a qualified buyer is willing to pay for it. No more and no less. Sure, many sellers will argue that their home has an insurance replacement value, or an appraised value, or a tax assessed value, but unless your insurance agent, your banker, or your tax assessor is willing to write you a cheque for the home – guess what? None of that matters.
A home without a buyer has no value in the market place. Sure it might have a value to you the seller, and it might have a value to your banker, and to your insurance agent, and to your appraiser. But none of these people are buyers.
So here is the secret to pricing your home to sell – It’s not what you think the home is worth that matters, it’s what a reasonable buyer will think your home is worth that will ultimately determine if your home will sell.
Now you may be thinking – Hey wait, if I left it up to a buyer, they would pay me as little as possible for my home. True, they would. But in the real world every buyer knows that you, the seller, have no obligation to sell your home at any price. To purchase your home the buyer will have to make you an offer you can’t or won’t refuse. One that will motivate you to pack up your Ken and Barbie collection, hire a local mover, and wave good bye to a home full of memories.
But here-in lies the trap that many sellers fall into (myself once), which is the mistaken idea that we can hold out for an inflated price and eventually the market will come to us. Wrong! Buyers are under no obligation to buy any particular home, and no amount of marketing, open houses, websites, or signage will motivate a buyer to purchase an overpriced home. Why? Because they can buy one of your neighbors homes for less! This reveals one of the most important considerations in pricing your home – Price VS Time.
Understanding Price VS Time
The age old dilemma that has faced buyers and sellers since the dawn of private property rights is a simple question: What is more important price or time? Believe it or not this conundrum underlies and controls every sellers decision to sell, and every buyers need to complete a purchase. For sellers this boils down to the need to sell within a set time frame or instead to hold out for the best possible price, and as you might guess, for buyers it’s the need to buy within a set time frame or to purchase a home for the lowest possible price.
A seller who would like to sell for top dollar should be prepared to potentially wait longer for a buyer willing to pay a premium price. Like trying to sell ice during December, a seller might have to give the stuff away just to get rid of it, but if they wait long enough, say until mid-August when temperatures crest over 100 degrees suddenly that same ice can have real value. On the flip side, a seller who needs to sell quickly, and doesn’t have time to wait, should expect to discount their price somewhat because of the limited time they have to expose their home to the market.
What’s the difference? Timing!
Buyers are in the same boat. A buyer who has the luxury of shopping for a home over a long period of time can probably wait to find a bargain, while another buyer who must buy a home in the next few weeks will probably be willing to pay a premium. Again it boils down to price vs. time. So you might ask yourself what is your highest priority – Selling quickly or selling for a higher price?
When I pose this question to my own clients they often smile coyly and then answer – I want both! The funny thing is that they aren’t kidding!
Quite a few home sellers want their cake with icing generously slathered on top. Because of this, many homeowners will attempt to put the responsibility of getting both top dollar and fast sale on the back of their hired gun, the real estate agent. The result can be summed up in one word – frustration. Why? Because no matter how much a seller yells, screams, and kicks a real estate agent, they don’t do miracles. This is why successful sellers understand that while a Realtor’s job is to provide marketing, expert advice, and negotiating services, in the end they don’t own the property. They don’t make the final decisions on pricing. The seller does, and ultimately the seller’s asking price will in large part determine how slowly or quickly the home will sell.
To frame this discussion in a different way, consider what you will do should you arrive luggage in hand at the end of your listing period and the home has not yet sold. At that point are you most likely to give it a little more time or adjust your price? I know – Neither, I’ll just fire the agent!
This is exactly what many sellers’ do; they fire their agent and reboot the marketing. Does it work? Sometimes it does, but often these sellers end up three months later in the same slow boat to nowhere. Successful sellers on the other hand take ownership of their pricing decisions by making a clear decision about which is more important to them, selling quickly or selling for top dollar.
Successful sellers have learned that to price their home accurately means they need to think like a buyer, they need to get inside a buyers skin and look at the world through a buyers eyes. For instance, imagine for a minute that you are moving to another area of the country, to a city that you are completely unfamiliar with. If you were faced with buying a home in strange city what would be your first step?
If you’re like most buyers you would probably start online by viewing listings to get a general feel for local home prices. Next you might narrow your search down to a specific community or neighborhood by comparing utility costs, school reports, and crime statistics. Feeling good about your findings you might then venture out into the real world to begin viewing homes in person.
As a typical internet empowered real estate buyer you will look at an average of nine homes over 1-2 weeks with the assistance of a real estate professional. By the end of your journey, like many buyers, you become so knowledgeable about the market that by the last showing you are able to guess, with reasonable accuracy, each homes listing price before your agent can even tell you.
So what happened here? As a buyer you went from a blank slate, with no impression of the market to having the ability to predict listing prices. A big leap sure, but this description is exactly what most buyers’ experience. But this is only the buildup, the next step for buyers who have found their dream home is to review a Comparative Market Analysis.
A Comparative Market Analysis is a report that compares a specific home, often called the “subject home” with other homes in a specific neighborhood. This analysis is then used to provide an anticipated sales price or price range for the subject property. Although not formally called an appraisal, the report provides a similar function by giving home buyers and home sellers a clear understanding of the market data that might affect their opinion of value. To learn more about using a CMA to help price your home talk to me and I can explain and demonstrate to you the value of pricing your home correctly.
So as you can see, pricing to sell your home is not the price your neighbour suggests, or a friend of a friend, or to recoup your costs of a poor renovation or upgrades.
When we do an Envelope Home Audit and a thorough CMA, you can rest assure that the price we come up with is the one that will enable your home to sell quickly and for you, netting the most money. Remember, homes that that sell for the most, sell within 2 weeks!
How Much Is Your Home Worth?
I am amazed at all the webpages out there, you know the ones I mean,they offer free evaluations without even seeing your home or the “Free Home Evaluation Reports” cards we receive in our mail boxes or the dreaded cold call ” I have a buyer who is interested in buying your home”.
How can anyone value your home accurately without physically seeing your home thoroughly and doing the two to three hours of research necessary ? Have you ever bought anything “at a ball park price’? “A general price range?” “The market price?” After helping hundred’s of buyers over the years buy homes, every house or condo my clients bought had a price, we never looked at homes without a price. Semantics aside, you deserve a price what a willing qualified buyer will pay.
So, what is that price?
Home Evaluations The Right Way
If you decide to utilize our research and apply our marketing tips, you’ll know how to price and sell your home for the fastest, most profitable sale. Also, with this information, you’ll never pay too much for any home you ever buy for the rest of your life.