The idea of downsizing can feel exciting or wistful depending on your frame of mind. On the one hand, think of all of the brand-new experiences out there in the world just waiting for you. On the other, are you really ready to leave behind the home you love?
Often, our reality lies somewhere in the middle. Feelings are complex. The real estate market is almost easy to understand in comparison to our conflicting emotions! At the end of the day, all that matters is that you make a decision that makes sense to you. In this post, we’ll help you decide if the time has come for a change.
Your home is one of your most significant financial assets, and understanding its value in today’s market is critical to your next steps. Start by booking your personalized home evaluation right here.
Calculating Your Equity
Downsizing is an emotional milestone; however, the transaction itself is all about the numbers. The longer you have owned your existing home, the better off you could be financially after your sale. Why? To better understand your situation, let’s talk about equity.
The simple dictionary definition is “the monetary value of a property beyond any amounts owed on it.” For many Toronto homeowners, their property makes up the vast majority of their net worth. Your equity grows every time you make a mortgage payment. Even more importantly, it increases every time real estate values increase – which can be substantial if you’ve owned in Toronto for many years.
To calculate your equity, take a look at how much you originally paid for your home versus how much it may be worth now. Let’s imagine you’re mortgage free after buying your house 25 years ago when real estate prices were much lower. To keep the numbers simple, imagine you paid $150,000 for a house that’s now worth $750,000. Subtract the $150,000 purchase price, and you have $600,000 worth of equity.
That growth may not directly translate into cash in the bank, but it does indicate how much purchasing power you have for your next steps. If the numbers look good, the time is right from a financial perspective. You just need to decide if downsizing is the right step for you right now.
A successful home sale now will open many doors for you once you’ve made the decision to downsize. Learn more about our proven processes right here.
The Case for and Against Downsizing Your Home
Downsizing does come with numerous benefits, and not just financially speaking. That said, it’s not necessarily for everyone. If you can’t imagine living anywhere else or actively find yourself wishing for more space, not less, then downsizing your home might be in the distant future.
However, if you have rooms in your house that you aren’t using and are tired of cleaning, it may be time to move on. A smaller home or condo with everything all on one level can feel like a luxury even when you’re able-bodied. If you’re starting to experience some aches and pains, having what you need within easy reach can feel like a dream.
There is no definitive answer for every scenario. The real answer to when the “time is right” often simply boils down to “it feels right.” Traditionally, this happens after retirement, but some people decide they want the carefree lifestyle a smaller home provides while they’re still working. Others are determined to stay where they are and age in place as long as they can. Again, there’s no clear and dry path. If the thought of a smaller home appeals to you, the next step is to make a plan.
If part of your downsizing plan means buying a new house, find out how we can help right here.
How to Downsize Your Home Without Stress
We could fill dozens of posts about how to downsize without stress, and given enough time, we probably will. If we had to sum up our best tips in two words, they would be “start early.”
Most people severely underestimate how much time it will take to simultaneously prepare their existing home for a sale, find a buyer, negotiate the transaction, find a new house, and arrange for a move. (This isn’t even an exhaustive list, which is why our team has spent years curating a network of professionals to take the burden off our clients.)
By starting the process early, you are no longer under pressure to complete each task under a deadline. When it comes to sorting through your belongings and decluttering, you will really appreciate having some extra breathing room. Deciding what to keep and what to discard isn’t just time consuming; it’s emotional. You may want to take a moment before parting with some of your most cherished items.
Every expert on the Kim Kehoe Team is dedicated to your success and happiness, whether you plan to buy or sell a home. Learn more about us right here.
Don’t Underestimate the Value of Personalized Guidance
The real estate market can be tricky to navigate, especially when conditions change with each breaking news headline. Fortunately, you don’t have to go through any of it by yourself. Having a compassionate and skilled real estate agent in your corner is not a resource to underestimate.
The customized guidance alone is invaluable. However, that’s not all a well-connected Realtor® with a positive reputation can bring to the table. You’ll also benefit from a wide network of other professionals, from cleaners and moving services to tradespeople and real estate lawyers. When anything you need is a simple phone call or email away, your transition can be something you look forward to with joy and peace of mind.
Are you ready to get started downsizing your home or do you just have questions about the process? Wherever you are in your journey, our West Toronto Realtors® are here for you. Contact us today at 416-788-1823 or email kim@kimkehoe.com to take the first step.
