If you’re thinking about downsizing your home, then you should know you’re not alone; you’re in one of the biggest real estate markets there is right now.
For those doing so later in life, it’s an important time, as a large portion of your retirement income will likely be coming from the sale of your home.
As one of only 25 Master Accredited Senior Agents in Ontario, we are very well versed in all the complexities a transition can bring.
Is this your time to downsize? If so, we want to share some information with you.
Here’s what you need to know about downsizing your home:
Know What Home Type You Would Like to Transition Into
The biggest question most downsizers face is “where will I live?” This usually gets confusing and selling gets put off until next year (and the year after that).
Start by assessing your “functional square footage needs”. What parts of the home do you really use and can that be accommodated that in a different housing type? More times than not downsizers use less than 50% of the square footage in their home and have a lot of unused space.
Know What Community You Would Like to Live In.
This is another lifestyle question that you need to think about. You may think you need to be around “everything”, but in reality, you might only go to the grocery store, Tim Horton’s, and the gym.
Know How Much Retirement Income You Need?
Your purchase price will likely be tied to how much equity you need to invest to provide yourself retirement income for life. Your financial planner should be involved in helping create a clear idea for you.
Involve Your Children in the Process.
It’s great to have the love and the support of your family when you’re making a transition, especially one like downsizing your home. More times than not, your children are hoping you’re making the move so you can have a great retirement and truly enjoy quality time with one another.
Listen to the Advice of Professionals.
Why? They’ve been through this situation time and time again, and they’re truly trying to protect your best interests. Try not to take anything personally, and know that you have a lot of qualified people in your corner helping you to make the best possible decisions (if you don’t know anyone, we can help).
The most important question to ask when downsizing is:
If the market were to go down 15% would that put a strain on my retirement? The real estate market in the GTA has been going up for the past 20 years, and there are many indications that the market may be due for a pricing correction. The problem is, you only know when it’s coming once you are in it. If you could not comfortably withstand a downturn in the market, then you should be selling while mortgage rates are at their absolute lowest and demand for homes is at its absolute highest.