Real Estate Agent in East York - Better Homes And Gardens Real Estate

PROPERTY PERSPECTIVES #035: The Regrettable #1 Trap of *Retirement Downsizing

06 November 2017
Kevin Hartley

East York Chronicle

It’s easy to dream about the leisurely days you'll enjoy with the high price your home will fetch. Perhaps the neighbours sold their home for a sky-high sum, or so they told you as a limo whisked them off to who knows where. The fact is, you likely don’t know; a) how their home differs from yours relative to the qualities prospective buyers value most; b) their home's condition or upgrades; c) the net proceeds of the sale; or d) whether the real estate market was better or worse than it is now.

Done right, downsizing can be a good idea. Most homeowners count on financing retirement by selling their home, buying a smaller home and investing the difference for income. Regrettably, they sometimes reap much less than they hoped for by overlooking or underestimating closing costs, realtor fees and tax implications.

But, the number one trap I see people fall into is overestimating the value of their home.

My advice; consult with several real estate agents to get a dispassionate estimate of your home’s current market value. More than one consultation is important, I suggest no less than three. An agent who desperately wants your listing may give you an overly rosy value. Be wary of agents who predict a number on the spot. While they may (or may not) be accurate, the proof will be in some well presented research of comparable home sales.

That said, the market and sale values change. If you’re testing the waters, be honest up front with the agents. A good agent will realise you may not be ready to make a move. But do try to determine which agent you trust to protect your interests, whom you like and can communicate comfortably with. Once you’ve decided on an agent, even if you’re not listing for several months, then signing representation documents is a good idea so that you’re protected with your mutual obligations laid out in writing. Your agent then can keep you posted on market shifts, advise and help you plan accordingly.

Ask about inexpensive things you can do to boost your home’s selling price. Most agree that major renovations aren’t a good investment because rarely do they recoup their costs. Again, this is why you are well advised to get feedback from multiple agents. Often, you can save yourself the money and aggravation by letting your home’s next owners deal with major projects. Many buyers are looking for a home they can update to suit their tastes and lifestyle, which will likely differ from yours.

A few simple spruce-ups, such as fresh paint here and there, pruning overgrown shrubs and decluttering your home from top to bottom can be worth the effort. If you wish, you can engage the services of a professional downsizer or home stager to help you. For free advice on these topics, just do a web search on the phrases “home staging”, “decluttering” or “downsizing”.

Downsizing your home can be a way to free up some additional cash for retirement, but run the numbers before you start packing. It could all make profitable sense, or you could decide it pays to retire in place, at least for now. 

Thanks for reading. Questions or ideas for a future blog? Feel free to contact me here.

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Kevin Hartley, Broker is a Toronto based real estate Broker with Better Homes & Gardens Real Estate | Signature Service, Brokerage. @Home is his lifestyle blog, an expression of his passion for home keeping though MAKING (Recipes), DOING (DIY), BEING (Health/Wellness) and DWELLING (Home Ownership, Sales & Maintenance).  Content not intended to solicit clients under contract.

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