Downsizing can be a money and sanity saver
When Norma Rosenthal and her husband moved to Issaquah, Washington, five years ago, they traded a 5,000 square foot home in Tennessee for a 2,500 square foot townhouse. In the process, they jettisoned many of their belongings — and found it freeing.
“We were both shocked at our willingness to let go of possessions that had seemed so important a year prior,” said Rosenthal, 61. “Our mantra now is if there is not a place for it, do not buy it.”
Rosenthal and her husband wanted to live in a smaller home with less clutter, but there are a variety of other reasons for downsizing. Many people want to sell a big home after their children move out. In the United Kingdom, three-quarters of people over 60 who plan to move from their three- to five-bedroom houses say they hope to downsize, according to a UK poll conducted for Demos, a US think tank. In France, which has a mature second-home market, many choose to downsize their holiday homes. “Generally it is parents downsizing as the kids grow up and look to holiday elsewhere,” said Graham MacLeod, a luxury real estate agent with Riviera Realty in Valbonne, France.
Others find themselves unable to afford the big residence in which they currently live. “These people... have been forced into a position where downsizing is the only option,” said Julie Starr Hook, a professional organiser and US author of From Frazzled to Freedom.
No matter what your reasons, downsizing can be a money and sanity saver. Here are some tips on getting it done.
What it will take: Although downsizing should lighten your expense load, there are short-term costs involved. There may be a fee or commission to sell your home, which could range from 5% to 6% of the sale price. (On a median home sale price of $212,000 in the US, that is $10,600 to $12,720). If you take out a mortgage to buy the next home, there are closing costs involved (usually about 1% of the home cost), plus the expense of moving. (Moving usually costs between $1,100 to $5,600 or more in the US, according to the American Moving and Storage Association.)
Keep in mind that if you live in a market where prices have dropped substantially, you may not be able to get as much for your home as you hope. This is an issue for Australians, for instance. “The benefits to move have reduced over the last couple of years,” said Brett Evans, executive director of Atlas Wealth Management in Southport, Australia, explaining that more expensive houses in the country have had a bigger price drop by percentage than less-expensive homes. Run the numbers to make sure that downsizing will save you as much as you think.
How long you need to prepare: That depends on you. In no hurry? Take as long as you need to browse for a smaller home that suits you. Just make sure you have factored in the time it will take to sell your current residence. If you live in a market where houses sit for months before selling, try to have a buyer for your current place before you jump on the next one.
Do it now: If you are moving from a four-bedroom house to a two-bedroom condo, you simply need less stuff. It may not be as hard as you think to declutter. “I advise my clients to surround themselves with only the things that they love,” said Andrea Brundage, a professional organiser in Mesa, Arizona. “Using that as a starting point, clients often realise that they can more easily release excess things in their homes.” Divide your belongings into piles — keep, sell, donate, and trash. Then go through your “keep” pile a second time.
For a reality check, try visualising where every piece of furniture will go in your new home. Once you do that, it may become blazingly obvious that you have to ditch more stuff. Consider using software such as Sweet Home 3D to virtually place every last chair.
Maybe you are holding on to something because it reminds you of a special family member or event. “A lot of times we do not get rid of things because of the memories associated with them,” said Chris Seman, president of Caring Transitions, a US franchise that helps seniors downsize to smaller living spaces. “We encourage people to gather everyone around, tell the story about the item, take a photo of it.” Then pass the item on to someone who can use it.
“One sure way to part with some of your clutter,” is to offload your children’s things, Hook said. Come up with a mutually agreed-upon time for your children to retrieve their items, and decide what will happen to the boxes if that deadline passes. (Hello, local charity.)
Do it later: If you have the time to examine every photo in your vast collection, go right ahead. But if your move date is two weeks away, your time is better spent taking care of the big things. Most knick-knack or photo collections will fit in a closet and can be perused once you are settled.
“When my father passed away, he had stacks of boxes full of slides,” Seman said. “The next thing we knew, the whole afternoon was gone because we were messing around with them. We could have moved them and done it later.”
Do it smarter: It may be beneficial to hire someone, such as a professional organiser or a service like Caring Transitions, to help you sort and declutter. A professional organiser usally costs bewteen $30 to $80 per hour. A service such as Caring Transitions might cost a few hundred dollars up to a few thousand, depending on the size of the job. A trained third party will help you eyeball your belongings with a more objective gaze and share the best ways to give away, donate or sell items. And he or she can also be helpful if a family dispute arises. “It is nice to have a third party to arbitrate,” Seman said.
(This story has been changed from an earlier version to correct the spelling of Graham MacLeod's name)