No longer are full- scaled lifestyles as popular as they once were. TV shows about tiny living — where you downsize your home, your life and your needs — are increasingly popular. If the idea appeals to you, you still need to go in with a plan. While shrinking your life can mean money saved and much more time for the things that you love, it’s a move that can come with a number of unexpected challenges. It can help to go in prepared.
Before you downsize, research new home prices
If you’re delighted at the thought of making a killing on the sale of your home, and the thought of how much you’ll get to set aside once you buy a smaller home, you need to first put in some research to make sure everything does go as you hope.
For instance, if you’re thinking of buying a modest, two-bedroom home, you need to realize that it’s an overheated market, one that has seen a 20% rise in activity in the past year alone. When you calculate the amount of money that you may be able to put by after the new home purchase, you need to take into account how homes in this category may cost much more than you remember. Before you get in, you do need to make sure that you will get to save as much as you hope.
Making sense of the arithmetic may be a real challenge
Even once you do learn what your current home will fetch you, and what a new home costs these days, it can still be hard to come by any precise figures. There are all kinds of unexpected costs involved in home purchases and sales — commissions, legal fees, mortgage penalties and taxes. You’ll find it hard to know what exactly you’ll have left over once you downsize.
If you’re not sure how these surprises happen, repair costs are a good example, according to Bridgfords, the leading real estate agency (additional details from Bridgfords). Home inspectors usually don’t catch every problem that a home may have, if it’s currently being lived in. If there are cracks on the walls in the basement, but there’s some heavy old furniture blocking the view, the inspector won’t know. You and the buyer will learn about them once you actually move out. Then, the buyer will want you to fix those problems.
There could be other surprise costs involved, as well. Not only is there a chance that you will underestimate the costs involved in making your current home sealable or the new home livable, living in the new home that you pick could come with higher transportation and maintenance costs, as well.
It’s always a good idea to run your numbers by an accountant or a qualified real estate agent before you make an actual move.
The problems aren’t always external ones
When you need to clear the clutter in your downsizing attempt, you may find that every move you make sets off opposition and friction. Each family member could have different ideas of what can reasonably be given away. Many times, you may find that you, yourself, have the strongest opposition to something that needs to be done. You may find that the thought of unloading possessions that come with memories make you feel guilty.
Downsizing also comes with the risk that you will inadvertently throw out things that you value and would want to keep — coin or stamp collections, antiques, important documents, and so on. You may even misplace important possessions.
It’s best to take your time downsizing. The more time you give yourself to carefully look through your possessions, and consult family members, the smoother the move will be.
Go in prepared
Downsizing can be challenging, for the simple reason that it involves more than just a move. It requires that you change your life. Sometimes, people simply get caught up in the romance of living a small, manageable life, that they neglect to think things through. It’s only after the move that they discover how less privacy, fewer clothes and smaller cars makes them unhappy. It’s important to judge your needs correctly. It can help to read up on downsizing forms about the experiences that other people have had.
Oscar Duncan works as a finance planner for the over 50’s who are either coming up for, or already are, retired. Downsizing is a topic which comes up regularly, and which he himself has had experience with due to his parents move.