If you’re like many people, just the thought of downsizing your home and moving elsewhere can feel like a monumental project. The task comes with a long to-do list that spans months, and sometimes years. And that’s not even mentioning the emotional impact of such a major life change.
Where do you start? First, take a deep breath, and break it down into smaller increments. Downsizing only seems overwhelming when you look at it as one massive project rather than a series of events that actually make sense at this stage in your life. This list of 20 things to do can help you move forward with more peace of mind.
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1. Plan Early
Nothing is more valuable than early planning when it comes to downsizing. Before packing a single box or moving a piece of furniture, start simply by thinking about what you want to do and where you want to go.
You don’t even have to make any major decisions just yet. You can ponder your options, weigh the pros and cons, and eventually, your path will present itself. Practically, logically, and emotionally, it will just feel right.
None of this can happen if you wait until the last minute and are forced to rush. Even if the possibility of downsizing is a couple of years away, it doesn’t hurt to think about your options now.
Do you have more questions about when and how to downsize and where to find help along the way? The resources below can make this transition easier:
- When is the Right Time to Downsize?
- Why Downsizing in Retirement Might Be a Terrible Idea
- Where to Find Downsizing Help for Seniors
2. Get Organized
The time will come when you’ll have to go through your whole house from top-to-bottom and sort through all of your belongings to decide what you will keep and what you’ll let go of. For many homeowners, that alone is the most daunting part of the entire downsizing process.
That’s another benefit to an early start. For now, you can focus on being selective about any new items you acquire. Perhaps you don’t need a new TV, sofa, or that luxurious but ultra-heavy kitchen mixer just yet.
Holding off means you’ll have fewer decisions to make later, less to pack, and less worry about your valuable belongings getting damaged or lost in the shuffle.
Now is also a great time to slowly but surely begin organizing your home. You don’t have to focus on intense decluttering just yet. However, the more you eliminate now, the easier it will be when your move approaches.
3. Think About Your Location
“Where?” is high on the list of critical decisions to make when downsizing your home. You may wish to remain in the same general area to stay close to family and friends.
Or perhaps, a fresh new start in a brand new city or town is in order. Other experts and professionals can assist you in nearly every other aspect of your transition. Where you ultimately end up, however, is a choice you must make for yourself.
Fortunately, Ontario offers many fantastic options for retirees or anyone thinking of a change. To learn more, read our post, Best Places to Retire in Ontario: Our Top Picks.
4. Hire a Real Estate Agent
The trick to the best possible downsizing experience is simple; just don’t try to do it alone. The support of your friends and loved ones will be invaluable during this time.
Even more importantly, professional guidance from an experienced and local real estate team can facilitate every step along the way. With expert help, you can streamline the sale of your existing home, making as few repairs as possible while still maximizing value in the current market.
We can also work with you in the purchase of something smaller and more suitable, all while providing the utmost support. At Go Wylde Real Estate, we’ve built relationships with reputable experts of all kinds, from contractors and cleaners to moving companies, home inspectors, mortgage experts, lawyers, and more. All the help you need for a straightforward move is one contact away.
You don’t have to wait until your move is around the corner to start connecting with real estate professionals in your area. The earlier you get in touch, the more time there is to plan and prepare.
Do you want to get an idea of how much support is actually available to you during this time? Check out our comprehensive list of preferred vendors.
Consider Your Financing
Finances are a primary concern for nearly every homeowner, especially when the thought of downsizing takes hold. Everyone wants to be able to retire comfortably and enjoy life to the fullest. All of this begins with financial awareness.
For many of us, the vast majority of our wealth and equity comes from our homes. You can access your property value in a number of ways.
Do you want to know more about mortgages and financing? The posts below can help:
- How to Get a Mortgage
- Do You Need a Mortgage Broker When Buying a Home?
- Is it Better to Pay Off Your Mortgage or Invest Your Money Elsewhere?
5. Go Mortgage Free
Depending on your preferred lifestyle and the resources available to you, becoming mortgage free may or may not be feasible. If you can make it happen, it is a great way to live.
Your main expense is gone, and suddenly, there’s more room in your budget for, well, everything. All of those things you always wanted to do but could never quite afford become real possibilities.
Selling your existing house while earning the highest amount while paying the least for your next home is one of the best ways to achieve the mortgage-free dream. If there’s a way, one of our talented Guelph real estate agents will find it.
6. Get a Standard Mortgage
If you’re not quite in a position to go mortgage-free, a smaller, less cumbersome loan on a less expensive property is also an option. This could even be a better path if buying your next house outright would leave you with too little cash flow.
Whatever you decide, an experienced real estate agent and mortgage expert can guide you to ensure the best possible value.
7. Apply for a HEL or HELOC
Either a Home Equity Loan (HEL) or Home Equity Line of Credit (HELOC) will allow you to access funds against the value of your home. The best part about these options is you don’t have to rush to put up the “For Sale” sign. (If you have the financial means, you might even consider keeping your family home even after you downsize.)
- A HEL is similar to a traditional loan where you receive a lump sum, with an agreed-upon interest rate and regular repayment schedule.
- A HELOC is more flexible. You can borrow only if and when you need to, and there are no penalties for paying off the entire loan.
Later on, if you need to access more funds, you simply make a withdrawal and begin the cycle again. This ease of borrowing money against the value of your home also has its downsides. You’ll need to be careful that you are using these funds wisely and hopefully sparingly.
Both a HEL and HELOC can come with higher interest rates as there is more risk to the lender. In addition, they use your house as collateral, which means you can lose more than points on your credit score if you fall behind on your payments. In the worst-case scenario, the bank can begin foreclosure or Power of Sale proceedings.
8. Reverse Mortgage
If you’re 55 years or older, you can use a reverse mortgage to borrow against your primary residence without even having to sell it. Even if you’re already receiving income from Old Age Security or Guaranteed Income Supplement, you can convert up to 55% of your current home value into tax-free money.
The total amount you can receive depends on your age and the appraised value of your home. To qualify, you must live in the house for at least 6 months out of every year.
A reverse mortgage differs from a HELOC in one very substantial way; you don’t have to repay those funds unless you sell your home or until the last owner passes away, whichever comes first.
Taking out a reverse mortgage can provide much-needed income after you stop working, either through regular payments or in one lump sum. However, there can also be some disadvantages to this option.
- Interest rates are usually higher, and you’ll likely need to cover any home appraisal and legal fees.
- Your ownership stake in your home decreases, and so does your equity and any growth potential.
- Lastly, since the loan must be repaid after your passing, you will have less to leave to any beneficiaries you may have.
Explore Your Downsizing Alternatives
Traditional downsizing looks simple and straightforward on paper. You sell your home, and begin the search for something smaller, more convenient, more affordable, or all of the above.
However, not everyone chooses the same path. If you’re ready for a change, but don’t want to go the prescribed route, there are other options available to you.
9. Stay in Your House and Age in Place
This is where accessing a HELOC or reverse mortgage could come into play. The equity in your house becomes a source of income, and you can skip the often-stressful process of selling and buying altogether, at least for now. Even better, you can stay in the community you have grown to love.
For many homeowners, this is the perfect alternative. For others, it doesn’t make sense to live in a house that’s bigger than what they need that needs more maintenance than they care to invest in. Heating and utility bills will also be higher.
If you do decide to buy a smaller home, the posts below can help:
- How Much Does It Cost to Buy a House
- Checklist for Buying a Home
- 7 Things to Know Before You Buy a Condo
10. Sell Your Home and Rent
You can sell your home to liquidize your equity, but there’s no law saying you need to buy a smaller place once you get the funds. Renting can free up massive amounts of capital and give you a sense of financial flexibility like never before.
You are not limited to a purpose-built apartment, either. By renting directly from a condo or homeowner, your space can feel personal and provide a sense of ownership – combined with the ease and convenience of renting.
A downside to this option is that the homeowner could decide to move back in or sell the property, which means another move is necessary. Lack of equity is another tradeoff.
In any case, the proceeds from your home sale can cover your monthly costs for years, especially if it’s in an interest or dividends-bearing account. Be sure to talk to a financial advisor before deciding these next steps. An expert can help you weigh benefits and disadvantages you may not have even considered.
11. Sell and Travel
The snowbird path is as popular as ever, especially for homeowners with the travel bug. Selling your home frees up both time and money so you can finally visit those far-away lands you’ve always dreamed about.
Some snowbirds disappear for months at a time, returning to Canada just often enough to maintain access to healthcare. (The rules vary by location, but Ontario allows you to be out of Canada for 7 months and keep OHIP – as long as you have been here for 153 days in each of the two 12-month periods immediately before you leave.)
12. Sell and Move in With Adult Children
If you are close with your adult children who are also homeowners, moving in with them offers benefits for all parties. Financial costs for both households become more manageable, and you can stay close to your loved ones.
Combining households can also be ideal if you need extra support as you get older. The downside could be feeling a loss of independence. You’ll also need to adjust to someone else’s lifestyle and routines.
13. Keep Your House and Have Adult Children Move In
This is a variation of the previous option, but it can be equally or even more feasible. Your adult children can get a foot on the property ladder if you add them to the title, which is an excellent boost for the younger generation.
You have the benefit of staying in your house and the company of those you love. If you can construct a secondary suite, even better, as everyone will enjoy more privacy, and this can even increase the value of your home.
14. Sell and Buy a Multi-Generational House
Having your children move in with you or vice versa comes with its share of advantages, but there are also challenges. The most significant hurdle is often that neither house is entirely suitable for two households to co-exist comfortably.
Enter the third option: all parties sell their existing homes and purchase a multi-generational property designed for separate living spaces. You now have the best of all worlds, independence and maximum support as you grow older.
This option doesn’t just benefit you and your children now. Future generations can also retain ownership, which can provide financial stability as housing costs remain out of reach for so many people.
As always, there are risks and considerations. The financial and emotional complexity of co-ownership can be a drawback in some cases. Living in close proximity does not suit every family dynamic.
15. Sell Your House and Buy Another
There is something to be said for the tried and true! Selling your existing home and buying a smaller house, townhouse, or condo is the most popular path for several reasons.
You retain homeownership and benefit from future equity growth while reducing space and upkeep. Just keep in mind that there are transaction costs involved in both buying and selling, as well as the effort of moving.
16. Some Combination of Any of the Above
Perhaps no single option is the perfect fit, and that’s okay, because you can always customize a solution using any combination we’ve discussed. The most obvious example may be becoming a snowbird.
If you move in with your adult children or they move in with you, everyone benefits from reduced costs and continued homeownership. Living in close proximity is no longer an issue, because you’ll be exploring some other part of the world for much of the time.
Do you want more insight as to how to get outstanding results when selling your home? Start with the posts below:
- When Is The Best Time To Sell A House?
- Why Landscaping Matters When Selling Your Home
- What Are the Best Ways to Increase Your Home’s Value?
17. Begin Preparing for Your Home Sale
Now that you have a plan for what you want to do and where you want to go, all that’s left is the execution. Selling your house while earning the maximum results doesn’t have to be complicated, especially if you’ve done all of your homework up until this point.
Your real estate agent will be there to handle the nuances of the transaction, such as marketing your listing and negotiating with potential buyers.
First, however, we want to ensure your house is prepared to wow and dazzle anyone who sees it online or stops by for an in-person visit.
18. Clean and Declutter
A thorough, top-to-bottom clean and declutter is the most important step in preparing your house for sale in any market. If you do nothing else, this will help your listing stand out.
Not sure where to start? Here’s How To Declutter to Downsize Your Home.
19. Decide What to Fix
Many homeowners get completely confused when deciding what repairs to make when getting ready to sell. Contrary to popular belief, you likely don’t have to invest tens of thousands of dollars or live in a construction zone indefinitely to impress a potential buyer.
Your real estate agent will advise you on what upgrades are most likely to pay off in the current market.
20. Decide What Not to Fix
The general principle is that if something will set off a red flag to a buyer, you should fix it. Otherwise, it’s often best to leave the designer appliances and total kitchen and bathroom remodels to the new owner.
Being able to skip those renovations you dread is a big relief when you already have so much on your mind. Sometimes, you’ll be surprised at what you can leave as-is with little to no loss in results!
Do you want help deciding what to do next when downsizing your home in today’s market? Our top Guelph real estate agents are happy to guide you every step of the way. Reach out at info@gowylde.ca or call 519-826-7109 for more information.
