Downsizing

Should we buy before we sell our current home to downsize? The main advantage of buying before you sell is that you have certainty that your new home will deliver exactly what ...
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Looking to Downsize?

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.

What are the benefits of downsizing?

  • The reduction or elimination of your mortgage – Depending on where you choose to buy your new property, downsizing can dramatically reduce mortgage expenses. Smaller homes cost less to run, freeing up cash flow and giving massive savings on interest over the term of your mortgage
  • Larger nest egg - Increase your retirement savings with the money you save on your mortgage
  • Greater freedom to travel – Discover more of the world!  Downsizing will provide you with a more manageable home base that is more easily maintained between trips
  • Cheaper utilities - Lower electricity, gas, heating and cooling expenses
  • Greater freedom – By downsizing you have more freedom to explore and revisit activities and hobbies that you may not have been able to enjoy when you were busy maintaining gardens and a larger house
  • Lower maintenance costs – If you opt for an apartment or townhouse, you’ll lighten your load significantly
  • Peace of mind - Less clutter and less or no debt will lead to a clearer state of mind and give you the opportunity to enjoy a new, simplified home and lifestyle

How do I plan this big change and work out where to buy?

  • Do your research considering your interests, hobbies, financial situation, location of your friends and family, and how you envisage living your life to the fullest
  • Use the internet. There’s a wealth of information to help you make up your mind
  • Choose a place best suited to your lifestyle. Some options are:
  1. City living: Opting for a townhouse, apartment or unit closer to the CBD typically leads to smaller living arrangements, but the energy of the city is so much larger. Moving from the suburbs to the city offers you increased access to museums, restaurants, shopping and theatres. A move to a smaller space in the city could also enable you to sell your car
  2. Age-qualified community: The standard age requirement for an age-qualified community is 55+. These communities are often gated and offer amenities such as a pool, fitness center, organised activities, athletic teams, sports courts, a golf course and more, so your new home could feel like a permanent holiday!
  3. Even if you haven’t decided to move yet, think of it as your back up plan for when you decide to make the move. The hard work has already been done.

What about my children? How will they react?

Interestingly enough, a move like this can be even more emotional for adult children than it is for parents.
  • Speak to your family about what you are thinking.  Share your thoughts with them and find out if they have any questions or concerns.

What should we keep and what should we let go of?

  • It can be emotionally difficult to sell or give away furniture, clothing, knick-knacks and artwork that you've collected over the years, even though you know rationally that you don't need them, so just focus on what you need and use on a regular basis
  • Get rid of unnecessary clothing, books, garden tools, toys and kitchen appliances you no longer use
  • Go through all that old paperwork and get rid of files you no longer need – securely of course
  • If you’d like to lighten the load, offer family members the items you no longer need
  • Hold a garage sale. It’s amazing how much you can get rid of and how much money you can raise
Click here for a handy checklist when holding a garage sale.

Should we sell before we buy?

It’s a wise idea to find a buyer for your current home before purchasing another.
  • That way, you’ll know exactly what price you’ve achieved so you can budget effectively for your next property
  • If you buy first, you may find yourself in the position of making repayments on two houses at the same time
  • If your current home doesn’t achieve the price you expected, you may come under unnecessary financial strain
  • Research your loan options with a financial advisor or mortgage broker.  If you’ve sold your existing property, but not yet settled, a Deposit Bond could be the most cost-effective way of financing the deposit for your downsizing property
  • Think about whether you’d prefer to keep your first property, rent it, then use the income to help finance your next home

How do we choose the right real estate agent?

One of the most important elements when choosing the real estate agent to represent you is ‘trust’.

An agent offering you the lowest commission rate and/or the highest appraisal is not necessarily the best option. To make your selection easier, take the advice of the professionals:  

  • Ask your colleagues, family, friends and neighbours if they are able to refer you to a proactive agent
  • If you are unable to receive referrals, search the internet for reviews from past clients of local agents
  • When you interview your potential agent, ask the following questions:
-    How many properties did you sell last year and last month?
-    How many buyers are you working with at the moment?
-    Can you provide me with an example of your marketing campaign?
-    How many salespeople do you have in your team?
-    What charges will I incur if the house doesn't sell?
-    If I am not happy with your performance, how do I cancel our agreement?
-    Can you provide me with a list of your past clients and testimonials?
-    How often will I receive feedback on the progress of my sale?
-    Can you provide me with 3 recent sales in the area, similar to my property, and what they sold for?
-    What is the average house price in my area?
-    Do you have similar properties to mine currently for sale?

Click here for more information on choosing the right agent.

First National Real Estate has over 400 offices around Australia & New Zealand. Our real estate agents would love to help you today. Click here to contact one of our agents

I’m ready to take the first step….Where do I begin?

While downsizing your home is a significant life change, it comes with great benefits. You can begin exploring your options right here with a First National Real Estate agent.

What are some home downsizing tips?

Downsizing your home raises lots of questions so here are some tips:

  • Choose a location that is central to where your children and friends live, if possible
  • Check the closet and storage space in smaller residences and be sure you have enough room
  • There are common access points in apartment living such as parking bays, corridors and lifts. It takes time to adjust from living in a residential house so be sure you understand the limitations of 'common property'
  • Apartment blocks have body corporate rules and, often, minimum fees per month that you may wish to review before purchasing your dream downsize apartment
  • Consider an extra room can that can double as a part time study, reading room or bedroom when friends, guests, children and grandchildren visit
  • If downsizing for retirement, consider only properties with at least one downstairs bedroom and bathroom so stairs cannot become a problem - forcing you to move again

How do we choose the best real estate agent when downsizing?

One of the most important elements when choosing the right real estate agent to represent you is ‘trust’.

An agent offering you the lowest commission rate and/or the highest appraisal is not necessarily the best option. To make your selection easier, take the advice of the professionals:  
  • Ask your colleagues, family, friends and neighbours if they are able to refer you to a proactive agent
  • If you are unable to receive referrals, search the internet for reviews from past clients of local agents
  • When you interview your potential agent, ask the following questions:

-    How many properties did you sell last year and last month?
-    How many buyers are you working with at the moment?
-    Can you provide me with an example of your marketing campaign?
-    How many salespeople do you have in your team?
-    What charges will I incur if the house doesn't sell?
-    If I am not happy with your performance, how do I cancel our agreement?
-    Can you provide me with a list of your past 10 clients and testimonials?
-    How often will I receive feedback?
-    Can you provide me with 3 recent sales in the area, similar to my property, and what they sold for?
-    What is the average house price in my area?
-    Do you have similar properties to mine currently for sale?
 
First National Real Estate has over 400 offices around Australia & New Zealand. Our real estate agents would     love to help you today. Click here to contact one of our agents…

What’s the role of a real estate agent and for whom do they work?

The real estate agent has been selected by the seller to sell the property and maximise the owner’s price.

The agent organises marketing, open for inspections, passes on offers received, and negotiates with multiple buyers under the instructions of the owner.
  • The agent does not take instructions from prospective purchasers but is obliged to communicate all offers received, regardless of whether he or she feels they are appropriate
  • The agent receives a commission, based on a percentage of the sale price, as payment for their services
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