TIPS FOR NAVIGATING ARRAY OF DOWNSIZING DECISIONS
Dennis Faulkner breaks down the steps, from decluttering to timing and more.
Change. Along with death and taxes, it is one of the only things you can truly count on. And life's little (or big) changes often lead to a change in housing needs.
Downsizing, or perhaps better thought of as “right-sizing” in the real estate world, is the act of going from a big home to a smaller home.
Often homeowners who are ready to downsize have had life changes such as adult children moving out, divorce, retirement, health changes or financial changes.
We see people just fed up with doing the regular exterior maintenance work that a single-family home requires, and they are ready to pay someone else to do it. They want to spend more of their time travelling, pursuing their hobbies and interests, investing time with family and stopping mowing lawns, shovelling snow and painting fences. And the best way to do this is by moving into a condo.
Condos come in many different shapes and sizes. The options for downsizing are vast, whether you choose a bungalow-style half-duplex condo, townhouse style, apartment style with underground parking, garage or surface stall — deciding what space you want is a very good first step.
Once you have a general idea of the space you intend to have — whether it's a 600-square-foot, one-bedroom apartment or an 1,800-sq.-foot bungalow-style half-duplex condo — you now have a good idea of what you can bring based on the space you are planning to move to.
Decluttering and downsizing are the next steps. Look at it from the perspective of what you want to bring versus what you don't want anymore.
Incorporate the 80/20 rule — 80 per cent of the time we use 20 per cent of what we own. Your goal is to figure out what items you use 80 per cent of the time. This is the stuff you want to keep. The other 80 per cent of your belongings, which you use only 20 per cent of the time, is the stuff you want to rehome.
This can be more difficult than one might think — we all paid good money for that Kitchenaid food processor we never use or that fancy dress that we plan to fit in when we lose that extra 20 pounds we gained three years ago.
The economic principle of “sunk” costs states that we can never recover the costs sunk into these things we bought so instead, look at it as the value it brings to your everyday life. There is a cost to keeping and storing these things, and is it worth that cost?
Marie Kondo's art of tidying up advice was to take each item and ask yourself how it makes you feel — if it doesn't bring you joy, get rid of it with gratitude.
Garage sales, Facebook marketplace, and Kijiji are all great options for selling your items of higher value. Many charities are taking household goods and using them to furnish homes for those in need. So the good stuff that you don't have space for can help others.
Family heirlooms are likely the hardest thing (emotionally) to downsize. Rarely do they fit in the 80/20 rule of items to keep but the idea of getting rid of it brings feelings of guilt and loss. For these items, downsizing time can be a great time to pass them on to the next generation.
Besides, a decluttered home is simply easier to sell.
Now that your home decluttering is well underway, it's time to buy your condo and sell your house.
Your realtor will be able to help you determine whether you should be buying first or selling first. In a seller's market, like we see today, you typically do not have the luxury of tying in your purchase with a “sale of buyer's home” condition. Often you have to sell first with a possession period long enough to give you time to buy your condo. You need enough time because if you find a condo you like, but aren't satisfied with the condo document review, or inspection and walk away, you will have to start the hunt again from scratch.
When making a condo purchase, there is more due diligence required in your purchase decision compared to buying a single-family home. In addition to all the regular stuff in home selection, like location, size, layout and finishings, a buyer must also review the condo corporation itself.
It is important to evaluate the corporation's financial health to ensure that the reserve fund is regularly updated and adequately funded. It is important to investigate whether the corporation has been deferring maintenance in an attempt to keep condo fees low.
The bylaws will outline rules and regulations regarding how owners can use their condo. This would include parking, visitors, elevators, pets, rentals and how common space is shared. Reviewing these will help you determine if the condo you are interested in will fit your lifestyle needs.
It is always wise to work with a realtor who is experienced in buying and selling condos and to have the condo documents professionally reviewed.
It can be a good idea to hire an inspector who is willing to do a visual inspection of the common property including roofs, foundations, parking, exterior, sidewalks, fences and parking lots. When a buyer purchases a condo they are partially responsible for the entire condominium complex.
Downsizing into a condo, when done with good planning and research, can be a great way to reduce living expenses, reduce housing maintenance obligations and free up more time for travel or just enjoying life.