Once upon a time the moving-to-a-smaller-house market was cornered by empty nesters and retirees. But a lot of folks have reconsidered how much home they actually need. We’ve all heard plenty about the McMansions and when everyone was flush with cash – well, honestly? Who really thought about it?
But the tides have turned. If you are looking cutting costs as well as upkeep efforts, consider the bigger picture. Depending upon your local market (in the Tri Valley of Livermore, Pleasanton and Dublin we have very limited inventory), you may have to consider the many factors at play.
STRATEGY:
Sell and purchase contingent.
Can you afford to buy without first selling your existing home? Meeting with a lender will help you figure that out. If not, you’ll need to list and sell your house first. What’s the inventory level like in your price range? Is buying contingent an option in your market?
Sell Contingent:
At least at this writing, there are many renters looking to buy. They may have the flexibility to purchase now and allow you to rent back while you are house-hunting. Your sale might then be considered ‘contingent’ upon finding a replacement home.
Sell and find temporary housing.
In the Tri Valley (Livermore, Pleasanton and Dublin), inventory is very low. Will you find the house you want after you’ve got a buyer for yours? You don’t want to be forced into a quick decision. So consider your options – move in temporarily with family or friends, or perhaps short term hotel options such as Extended Stay?
Sell and rent.
Rentals are in short supply in the Tri Valley and much of the East Bay. Most of those landlords have strict pet policies, and most like leases of 12 months. If you’re hoping for a lesser lease time, put the feelers out early with your Realtor®.
WHERE:
Where are you going? Understanding the market where you’ll be next is paramount to putting your game plan together.
Sticking Around?
If you plan to stay in the same area, you may already know which neighborhoods you like. Check with your a local Realtor® to keep a watch out for you about upcoming listings.
Whole new digs?
Renting in an unfamiliar area may be a wise decision. Until you know the lay of the land, the commute routes and get familiar with the whole city, you may not be sure where you’d like to be. Know the area well enough to make a purchase decision.
55+ and buying down?
In California, there may be some advantages for you. Find out if you’re eligible for Prop. 60 or 90. Some timelines are important for this type of purchase, so put that into your game plan.
WHY:
Choice:
So many reasons dictate a downsize – retirement, empty nest you may have some breathing room in planning your exit strategy. Sometimes though, that task can be daunting if you’ve lived in your home for a long while and just don’t know where to begin. Engaging the help of a professional real estate agent may greatly help you work through your ‘to do list’ and timelines if orchestrating a game plan and dealing with the process of moving is difficult for you.
Necessity:
Natural life circumstances often lead to changes in housing - job relocation, death, divorce, and financial hardship have forced many into difficult decisions. Things become tougher when the situation requires quick action and is emotionally charged. Hiring a professional to manage the timelines and numerous details can be a great stress reducer.
WHEN:
Now:
Time may already be ticking depending upon the conditions of your home sale. Understanding all of the necessary steps and having a game plan in place can relieve some of that burden. Your real estate agent can help with this. Leaving too many of the details to the last minute will only compound the problems, so prior planning will help eliminate some of that. There is an emotional side for you and they may very well be high emotions from the other party you’ll be in contract with. Looking at it from both points of view will help in your negotiations. Inventory and market conditions will determine the value of both your home and the one you are purchasing. Make sure your agent has apprised you of those conditions prior to working up your sell/buy strategy.
Later:
Your timing has pluses and minuses depending upon the market. If prices increase, you’ll net more from the sale of your existing property. However, the replacement property may also be higher in value, resulting in a larger tax burden than if your purchase occurs in a downturn. If you’re moving to a more expensive area, selling first and waiting may provide you with an advantage if inventory is plentiful in the new location. Making your offer non-contingent will strengthen your offer. Selling and renting may help you time the market, or determine which neighborhood or house you want, providing more choices over time. But also keep in mind the tax advantages of home ownership over renting for too long a period. It’s always wise to consult with your tax preparer or CPA to see how a home sale or purchase affects your overall tax situation.
THE DREDDED TASK:
Thinning out your stuff. This may be the worst part for many. Most of us have far too many things in our homes, whether in use or not. Dealing with your possessions as early as possible will relieve much of the burden in preparing your house for market, or in planning your move to a smaller living space. For suggestions about tackling this task, read: Every 3 Years, Pretend Like You’re Moving.
THE BASICS:
Recent and local neighborhood information about your home value and prices in the community are necessary for you to make an informed decision. Engage your Realtor and loan officer early in the process to prepare you for success.
REACH OUT:
If I can assist you with any part of your future or present planning, don’t hesitate to call.
