Guest post by Virginia Cooper
Saving money is the top reason people downsize, according to 69% of respondents in a Homes.com survey. Others downsize from a home that's too large or difficult to maintain. Whatever the motivation, try to avoid these common downsizing mistakes.
Failing to Plan
Downsizing is a major process. You have to sell your home, reduce belongings, and move into a new home. Having a clear plan ensures you handle all essential tasks, which reduces stress and makes the process smoother.
Ignoring the Emotional Side
Moving to a smaller place can be emotionally challenging. Acknowledge the difficulty of the move and find ways to say goodbye. You might hire a photographer to take family pictures on the front steps, for example.
Missing the Timing
Avoid rushing into downsizing or waiting too long. Rushing can make you miss key steps or choose a new home that doesn't fit you. Waiting too long can strain your finances if you're overspending on your current home. Set a realistic timeline and create an action plan.
Get the Best Interest Rate
The amount of money saved by a lower interest rate can be in the tens of thousands of dollars over thirty years. If you or your spouse served in the military, be sure to check VA mortgage interest rates. No down payment purchase or refinance loans are available to qualifying veterans with low interest rates, and no monthly mortgage insurance premiums.
The median listing price in Birmingham is up 15 percent, according to the University of Alabama. But it's not just the purchase price you need to consider. Other expenses include:
• The cost of movers
• Repairs to your new home
• Repairs on your current home
• Storage unit if your things don't fit
• Potentially higher taxes or cost of living
Making repairs, packing, and moving yourself saves money, but it's time-consuming and stressful. Hiring help is often worth the expense to ensure it's done correctly and quickly.
Declutter to Downsize
Finding the perfect amount of decluttering isn't easy. Declutter too much and you might regret it. Fail to declutter enough and you'll still have too much stuff that doesn't fit in a smaller home. This can force you to pay for a storage unit, which typically costs $190 per month, according to Move.org. Be realistic about what fits into your new home and downsize your belongings accordingly.
When choosing a smaller home, don't ignore your lifestyle and needs. A new home that doubles your commute costs more in gas and car maintenance, so it might not save much. If you're too busy to care for a lawn, consider a rental or townhouse. Determine how much space you need based on your family to avoid something that's too big or small.
Overpricing the Home
Pricing your home too high can increase the time it spends on the market. Even if you lower your asking price, you can miss potential buyers. Some active buyers only look at the newest listings, so if they skipped your home initially due to it being overpriced, they might not come back to it. You can get help pricing your home correctly by joining the 89% of sellers who use a real estate agent, according to the National Association of REALTORS. Your agent researches the market to set a price that helps your home sell quickly.
Avoid Downsizing Mistakes
Planning your move reduces stress and makes everything go smoothly. Because the buying and selling of a home requires a few steps that have to be coordinated with banks and all involved parties, it can seem like a miracle when it all works out. Soon you’ll be living a simpler life with less stuff and a more efficient living space.