RISMEDIA, April 11, 2007-In many markets throughout the country, downsizing is a popular trend. Whether it's people who get busy and no longer care for the maintenance involved in owning a full-sized home, or boomers who prefer to spend their weekends with the grandkids, downsizing is the new reality for many homeowners.
"The decision to downsize, while trendy these days, is a tough one that shouldn't be entered into lightly," said Holly Slaughter, RealEstate.com Tips and Tools editor-in-chief.
So are your customers ready to downsize and leave the family home behind?
Slaughter suggests considering the following questions:
Does a downsized home fit your lifestyle?
• There are many lifestyle options to consider when looking into downsizing. Sure, your health is good, but are there amenities like public transportation and stores close by in the event that your health deteriorates?
• If you prefer to not deal with landscaping maintenance or lawn upkeep, you might want to consider a condominium or a unit in a retirement community. When investigating these options, however, do your homework. Are existing residents happy with the way things are run? Does the community allow pets?
• Are you ready to let go? Downsizing translates to the simple fact that you will have less room for your possessions. (i.e. – You might have to part with larger furniture pieces or things you've accumulated in basement storage for the last 20 years.) Giving up these things is an important part of downsizing and something you need to take seriously.
• How important is it to you to maintain close ties with neighbors in your existing house? If this is important to you, consider moving to a smaller house in your current neighborhood.
Can I afford it?
• Look into how much it would cost to move into and maintain a smaller home. Evaluate all of the costs such as yard upkeep and home maintenance. Make sure it really is cheaper to live there.
• Determine how much you will likely make from the sale. Under current tax rules, up to $500,000 (if you are married or file jointly) in profits from the sale of your principal residence is not taxable as long as you've lived there for at least two of the previous five years. Up to $250,000 in profits is not taxable if you're single. Consult a tax advisor to discuss your situation.
There are several factors that might lead one to decide to downsize, including needing a smaller home because of financial or other circumstances, saving money on mortgage payments, or moving closer to family and friends. Many homeowners also consider downsizing to a home with a master suite on the lower level so they don't have to climb stairs to access an upstairs bedroom.
On the other side, there are also a few factors that may encourage one to stay in their current home, including considering whether or not you're emotionally ready to leave the house behind. While this might seem sentimental, it should play a big role in whether or not you're ready to downsize. Don't discount your gut feeling. If they hear the word "downsizing" and immediately think "no room for the kids and grandkids when they come to visit," then maybe downsizing isn't for you right now.
For more information, visit www.RealEstate.com.