Now the Christmas period has died down, you may be thinking about the coming year and have decided that your resolution is to downsize.
This is a big decision and one you won’t regret but you may be wondering how to start the process. The following outlines a general order of events that will help you get started and break things down into steps.
How to downsize
Step 1. Decide where you want to live
The first decision you need to make is where you will relocate to.
You may want to stay in roughly the same area, or you may want to move from one side of the country to the other. Buying a smaller home offers you considerably more choice than buying a larger place because you’re more likely to be able to find something to suit your budget.
When you’re deciding where to relocate to, think about proximity to family as well as shops, transport links and medical facilities. If you’re downsizing to make life more convenient it’s about your location as well as your home.
Step 2. Investigate your options
With an idea of the area you hope to buy in, you can assess your options.
While the main idea is to buy a smaller home, there are still plenty of styles to choose from.
You may like the idea of apartment living with its greater safety and added amenities. On the other hand, you might prefer a townhouse or a place in a retirement village. Discuss your options with your partner, and you may want to loop in your financial advisor as well, to figure out what you can afford and what you will do with the leftover funds.
Step 3. Start the downsize process by selling your family home
The point of downsizing is to sell your old home to fund the purchase of your new one. This will free up cash as well as time.
If you have been in the same family home for many years, you’ll need to refamiliarise yourself with the process of selling. Start with some online research about prices, then contact a local real estate agent. Check their online reviews and meet with them to see if you feel comfortable working with them (this is very important).
After you meet with your agent, you may realise you need a few weeks to declutter and prepare the home for sale. During this time, you can sort through your belongings and arrange for repairs or upgrades to have the home looking its best.
Your agent will be able to help you with the rest of the process, which will include:
Figuring out how much your home is likely to sell for (based on recent results and data)
Choosing your selling strategy e.g. private treaty or auction
Preparing your home for sale (decluttering, cleaning, styling)
Having photographs taken, writing the description and marketing the home online
Hosting your open home
Receiving offers and negotiating with buyers
Accepting an offer
Negotiating and exchanging contracts
Step 4. Find and buy your new place
Most property professionals recommend you sell before you buy to downsize so you have an idea of your budget. If you do the reverse, you may have to negotiate an extended settlement so you have time to find a buyer.
If you’re downsizing to a retirement village, make sure you’re clear about what you are paying for, what the ongoing costs are and what the community is like. You should be able to find a cost-effective solution in a place you love.
Step 5. Moving day
Get ready for your big downsize move with the help of removalists and cleaners. Removalists may be able to ‘lease’ boxes to you that can be returned for a fee. There’s one thing for certain; moving is a big job. Enlist the support of friends and family to get through it all, then be ready to pop the champagne and start an exciting new phase!
IMPORTANT: Any tips or advice contained in this article are general in nature and you should always seek professional advice from expert advisers about your individual situation before making significant financial decisions.