You’ve Decided That Downsizing Is Right For You….
Whether downsizing is just around the corner or in your short term future plans, once you’ve made the decision to downsize, it’s important to start the process as soon as possible. That’s because downsizing, by its very nature, takes more time, more thought, more planning and more preparation than any move that you’ve ever experienced in the past. It’s important to give yourself adequate time to accomplish the tasks at hand while, at the same time, allowing yourself the time and space you’ll need to take a few short breaks along the way. To set you up for success, we’ve broken the process down into six easy to follow steps.
Step One: Preparing Your Home For Sale
De-Cluttering
De-cluttering your home is one of the first and most important steps you’ll take when downsizing your home. Starting early and staying focused on the task at hand will be key to your success. Because this is such an important step, we’ve dedicated a blog post specifically designed to walk you through the downsizing de-cluttering process. Click here to read our “Top 10 De-Cluttering Tips When Downsizing Your Home.”
Getting Your Home “Market Ready”
Once you have the de-cluttering process well underway, it’s time to get your home “market ready” by ensuring it is in tip-top shape. For a step-by-step guide, click here to visit our recent blog, “Preparing Your Home For Sale – It’s All About The Details!”
Depending on your individual circumstances, preparing your home for sale may take several weeks or several months to complete, so while this step is in progress, begin working your way through Steps 2 through 6 outlined below.
Step Two: Establishing Your Future Wants And Needs
Defining Your Future Lifestyle
Getting a very clear picture of your ideal future lifestyle will help you not only determine the type of accommodation you’ll need but your ideal future neighbourhood as well. For example, if you like to travel throughout the year, vacation down south during the winter months or spend extended time visiting family and friends away from home, a condominium apartment or townhome, where you can lock the door and know your property will be well maintained, may be best for you. If you’re looking simply to downsize to a smaller home in a quieter community with all of the benefits that your existing home currently provides, than a semi-detached or smaller detached home should be high on your list.
Choosing the Right Neighbourhood And Location
When choosing your neighbourhood and location, think “big picture” and consider not only your current lifestyle requirements but your future needs as well. Consider proximity to friends and family and amenities like parks, grocery stores, drug stores, medical and healthcare facilities, shopping and entertainment to determine what style of community best fulfills your lifestyle needs. If you like to be in the centre of activity with a host of amenities within walking distance, an urban setting may be your first choice. If you’re looking for a quieter lifestyle, outside the hustle and bustle of city life, a suburban or small town location may be best for you.
Step Three: Understanding Your Finances
Planning ahead from a financial perspective is an extremely important step. Based on your retirement savings, investments, projected retirement income, estimated equity in your current home, existing debt and regular expenditures, build a budget to determine your average monthly cost of living and the price range for your new home that works within that budget.
Step Four: Establishing Your Team
Engage With Your Real Estate Agent Early And Often
When downsizing, it’s important to secure the services of a real estate agent very early on and communicate often throughout the entire process. Not only will they be instrumental in confirming the true market value and the optimum selling price for your current home but will also be instrumental in evaluating the cost of your future home based on the criteria you provide.
Most importantly, they’ll be there to guide you through the entire home buying and selling process, from showing you homes in your desired location that match your criteria and negotiating the best possible purchase price to simultaneously marketing and negotiating the best possible sale price on your current home. They’ll also draft the contracts of purchase and sale and oversee both contracts to completion.
They understand local market conditions better than you do and are experts in their field. They’re best positioned to negotiate on your behalf and act as your advisor, consultant and negotiator at every step of the process until the deals are closed.
Consult With A Professional Financial Advisor
Once you’ve established your financial plan, it’s prudent to seek professional financial advice. Meet with a trusted advisor – your financial planner or a seasoned accountant – for their expertise in confirming your plans will drive the results you are looking for.
If downsizing in retirement, you may have enough equity in your current home to purchase your new home with considerable cash left over. This would also be an excellent time to discuss this with your financial advisor and determine how those funds should be allocated to guarantee the maximum future benefit from them.
Seek Professional Mortgage Advice
In cases where a mortgage or refinancing may be necessary, speak to a qualified Mortgage Broker who can help you navigate through the process and find the solution that best fits your needs.
Now you can start the house hunting process focused on properties within your price range and budget. Then, when you find that perfect home, you can proceed with confidence, knowing that you are on track financially and have already met any necessary financing conditions to close the deal.
Step Five: Finding Your Home
Now it’s time to finalize the purchase of your new home. If it’s been awhile since your last foray into purchasing real estate, here are some considerations as you set out on the house hunt.
Consider such things as the age of the home, how the property has been maintained over the years and obvious signs of problems, such as a damp basement, aged windows and doors, water damage, squeaky floors, damaged or missing shingles etc. This will help you in determining your final offer price for each home and assess upfront if this properly is right for you!
Step Six: Doing Your Homework
At this stage in the process, you’ll need to bring in your team of experts to help you get to the finish line. Here are the key people you should be talking to:
A Home Inspector
Before purchasing your new home, it’s important to know the true condition of the home. If the home is free of needed repairs, you can move forward confidently with your purchase price. If repairs to the home are needed, you can negotiate with the seller either to complete the repairs prior to taking possession of the property; negotiate a reduced asking price or withdraw your conditional offer.
A Mortgage Specialist
If a mortgage or refinancing is necessary, once your offer has been accepted on your new home, completing your mortgage approval or refinancing process is the next critical step in securing your home. With a copy of the Offer to Purchase and the necessary financial information, your application will be submitted to the mortgage lender that you have selected. The lender will qualify the application and complete a valuation on the property you have purchased.
A Real Estate Lawyer
When selling your existing home, your Real Estate Lawyer will make sure your legal rights and financial interests are protected and that all documentation is understood and signed. They will review the Agreement of Sale and other legal documents, prepare the deed to your house, remedy title issues as they occur and close the transaction ensuring all legal and financial conditions have been met. Finally, they will exchange legal documents and keys with the buyer’s lawyer.
When the deal is finalized, and the financing is in place for purchasing your new home, your lawyer will review the Agreement of Purchase, and all other legal documents, ensuring that there are no claims listed against the property; arrange for title insurance; do a property title search; check that your home complies with current building and zoning codes; ensure utilities and property taxes are paid; calculate the land transfer tax due on closing; review the mortgage agreement and get all of the paperwork ready for closing. Finally, on closing day, they will exchange legal documents and keys with the seller’s lawyer.
Congratulations! You’ve made it through the process with flying colours. Now it’s time to relax and enjoy!
Related Posts:
Top 10 Reasons To Downsize Your Home
De-Cluttering Tips And Advice When Downsizing Your Home
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