Arguably, American culture is very big on big things, and many Americans live by the motto “the bigger, the better.” This is witnessed in roads, highways, cars, food portions, houses, and practically anything that has a size. But this lifestyle has been changing over the decades as we begin to see the advantage of having smaller possessions. This comes into play even more strongly now with thousands of people considering downsizing their homes, especially as they approach retirement.
Empty nesters find themselves alone in what was once the family home when their children move out. When you have a huge house but you’re basically only using four rooms—the bathroom, kitchen, bedroom, and living room—it would only make sense to at least consider moving into something smaller. That move could have a very positive impact on your emotional well-being as well as your finances.
Why Should You Downsize Your Home?
Then again, you don’t have to be a retiree to consider downsizing your home. There are plenty of other reasons why you might want to do so; you can have less living costs—since there might be less to do and less to spend on upkeep—as well as divorce, paying off debts, having too much of your capital tied to one item (which could mean not enough money when you have an emergency), and many more.
Before making any major decisions on something that will impact your present and future life, you want to look at the situation from different angles. So, let’s take a look at some of those angles to consider before you take the plunge.
The first thing to consider is how much it will cost you to sell the old house and buy a new one. The money you may be saving by paying a smaller mortgage might go to making repairs to sell your home, listing it, moving costs, property taxes, etc.
Some cities are known to have extremely high hidden costs. Boston ranks first, followed by San Francisco. Also included in the top 10 list is Los Angeles, with most homeowners facing hidden costs of $11,333 in total, or $944 per month. Some are unavoidable, like insurance and tax, but you can avoid LA’s high hidden costs by using the services of https://socalhomebuyers.com/los-angeles/ to sell your home without worrying about listing it. You don’t have to pay any commissions or closing costs, making it a hassle-free procedure to get the best price, and fast.
The market timing of selling is another factor you need to get right. The market at the time of selling can be hot, cold, or neutral in both the seller’s and buyer’s markets. You want to try to get the best of both when selling the old home and buying a new one.
Even experts can’t time the real estate market, but you can try to determine the best time for you to sell and buy. Downsizing in the selling market could bring in more cash after closing a deal, but it could also mean paying more in the buying market. The buyer’s market exists when there is more supply than demand. The seller’s market has more buyers than available houses. Because there are fewer homes for buyers to choose from, almost every home will sell.
Buy or Sell First?
It’s a question that many homeowners need to think about. No one really likes the answer “it depends,” but it really does. It depends on factors like whether the house you’re selling is easy to sell, and whether the one you want is easy to purchase.
If you sell first, you’ll need to have a place to stay between the time you sell and buy. But you’ll have the cash to make a down payment on your new home and there will be no pressure on you to sell at a certain time. Most experts will advise that you sell first.
When considering downsizing, always know it’s not just about the present moment. You want a home and location that is livable for many years to come. This means looking even beyond your retirement years. You want a house that is suitable for senior aging, which means no stairs, perhaps, and one that is easy to move around in. The notion of location doesn’t change when downsizing. So you still want a location that is suitable for your needs.
Downsizing a house is becoming more popular because it makes perfect financial sense to many people. Bigger doesn’t always have to be better. In fact, in many cases, smaller is better—and smarter, too.