Downsizing or Rightsizing

Yesterday I spoke with another potential client who said they’re thinking about downsizing. I seem to be having this conversation a lot this year! -but too many people are using the term “downsizing” when what they really mean is “rightsizing.”

Downsizing is where someone owns a large home and truly wants to downsize to a smaller square foot home. Maybe their financial situation has changed and they are now on a fixed income or will be literally making less money for various reasons. They may not have the time or energy to clean a 5 bedroom 3 bathroom home like they used to.

The kids are now moved out and it’s just the two of them so they don’t need this much house anymore. They may even want to travel more often so they are considering buying a maintenance free serviced apartment or apartment. Whatever the reason is, they are at a point in their life where they want to simplify things. Does this sound like you?

Many people use the word downsizing to describe that action. But downsizing implies that you are sacrificing or giving up something bigger, for something smaller whether that’s square meterage or size of house payment. Rightsizing instead implies you are making a move that looks and feels “right.” Big difference!

You may own a 2 story home and you no longer use all levels in the home. Many times it’s after the kids have moved out and the parents are only living on the one level 90% of the time. They only go upstairs to sleep and they may occasionally use the remainder when friends are visiting. They’re spending a lot of money to heat and cool the entire home when they could buy a more modern or differently designed home that is more energy efficient and makes more sense for how they want to live.

Sometimes they actually do want to buy a home that is smaller, but too often they’re surprised that the style of home that fits them better isn’t necessarily cheaper in price. This is where they struggle with the decision. They assume that because they’re buying a smaller home, they should be able to cut their mortgage payment in half.

What a lot of families don’t realise that more often than not ‘newer’ can mean more expensive, even if the land is smaller.

The other thing that affects price is the age of the home. Quite often, they want to sell a larger home that was built in 1980 (40 years old) to a modern home that was built in 2007 (10 years old). Many times their 35 year old home had minimal upgrades but the new maintenance free  home has granite bench tops, stainless steel appliances, modern tile and luxury flooring, and updated bath fixtures. They’re surprised to find that the sales price may actually be the same on both homes. The question is this, “Do you want to downsize to save money on your monthly payment or do you want to rightsize to buy a home that fits your current lifestyle?”

Make no mistake, buying a smaller home is a compromise. Our clients struggle with “giving up” some of their space or even their favourite furniture because they have no room for it in the new house. They may be giving up that 3rd car garage for a home that only has a 2-car garage. They may not have all that extra space for family gatherings around the holidays. They could even end up buying a home with a smaller kitchen or one that does not have a formal dining room. These are the decisions you will have to weigh for yourself if you’re truly downsizing.

The ones that do downsize typically have a very strong reason for doing so, and this is important because we’ve also had clients that chose to buy a smaller home and then two years later came back to us and said, “I don’t know what we were thinking. We spend most of our time at home and this one is too small for our needs.”

I can also tell you that I’ve never had a client unhappy with their purchase when they were rightsizing. Honestly, even when the new home is slightly more expensive, they are never unhappy with their decision. They move from an older home to a much newer home with modern upgrades and now they are not spending time and money updating their house or making repairs. Their stress level drops dramatically and now they have the home that fits their lifestyle and they are relaxed not having to worry about “that big house” anymore.

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