The family home holds countless memories and is often a part of a family for many years. Although then the kids move on, retirement is on the horizon, or a loved one may be too sick or old to live alone anymore. All these scenarios could mean it’s time to downsize and sell the family home. Or at least give it some serious thought.
Downsizing is a significant life event and should be well-thought-out. Don’t underestimate the emotional impact of selling the family home. Downsizing is stressful, especially for the elderly, who may have lived in the same house for many decades. But downsizing can be a financial lifeline and open up a whole new lifestyle and banish the worry of paying a mortgage or the upkeep of a larger home.
When is the right time to downsize?
Deciding when to downsize all comes down to a personal decision. Some people move when their children have moved on, and they are in their 50’s or early 60’s. They no longer need all the space in their home, becoming too much to maintain the property, especially if it has a sizeable garden and swimming pool. Others leave it to when they are older and their health becomes the factor that prompts a move.
The benefits of downsizing
For many of us, the equity held in the family home is the largest investment we own. In many cases, it is a greater nest egg than the savings held in super. If you own the home outright or have substantial equity in it, selling could help give you an income stream, transform your lifestyle or help to pay for your day to day living expenses. The benefits of downsizing can include:
- Creating or increasing your cashflow
- Allowing you to move closer to family and friends
- Reducing or eliminating a mortgage
- Allowing you to move closer to amenities
- Reducing home insurance payments
- Increasing retirement savings
- Having less home maintenance to do
Declutter before you downsize
A downsized home is smaller, so take the opportunity to rationalise your stuff well before the move.
Be warned decluttering a lifetime of precious belongings can be sensitive, so try to be practical. You would be surprised by the amount of ‘stuff you accumulate. This is not a time for sentimentality no matter how personal the items are. Review what you have and get rid of anything you don’t use. It also an opportunity to ditch duplicates of, for example, appliances you have accumulated.
And don’t be tempted to bin anything. Rather sell your stuff, via eBay, Gumtree or a garage sale. You will be amazed how much you can get rid of and the money you could raise. Recycling and donating to your favourite local charity are also great options that are good for your conscience and the environment.
t’s important to thoroughly understand why you are selling. Before taking the decision to sell the family home:
Do:
- Research the financial implications carefully
- Take the time to get to know an area before you move there
- Get the sale process started well in advance
- Declutter before you move
- Hire the best local real estate agent for the sale – hint hint, we know a few good ones 😉
Don’t:
- Be too emotional when downsizing
- Leave it too late to downsize
- Rush into buying a new property
- Buy before you have sold your home
- Be afraid to get advice
The bottom line, research all your options well in advance before you make the decision to downsize.