Broker Check

Downsizing Your Home - Is it a Good Idea?

BridgeQuest Wealth Strategies recently hosted a 502 Breakfast (bring $5.00 for breakfast, and give your two cents… get it?) focused on the topic of downsizing. The concept is derived from our belief that people nearing major transition points need others to share a meal with and discuss relevant life stage topics. We had a great turnout, with over twenty attendees from all stages of life. Together, over coffee and great food, we discussed the benefits and challenges associated with downsizing.

We invited a professional Realtor team to share their knowledge and experience on helping people through the process of downsizing. They highlighted that each situation is truly unique and that many times this process takes longer than the typical house move. It can take several months or even years to get mentally and practically prepared to downsize your home. They stressed that it is truly a blend of financial, emotional, and relational factors to help determine when and where downsizing makes sense.

We also had a client with mortgage lending experience who shared about the current interest rate environment and the overall approval process. We then opened it up for input from our guests. Here are some questions and comments we received:

  • “When is the optimal time to downsize?”
    • This led into a wider discussion touching on financial, emotional, and relational factors.
  • “Is now a better time to buy or sell?”
    • The realty team and mortgage broker explained that in our area it’s generally a seller’s market, but it also depends on the value of the home.
  • “What about comparing staying in our current home vs. living in a maintenance free facility?”
    • The economics may favor staying in your current home, but the demands and unexpected expenses (even if managed and outsourced) can be overwhelming.
  • “Are co-ops a wise strategy? Their presentation made it sound so appealing.”
    • There are many details to be considered with co-ops, including total costs, benefits, exit plan, etc. This could be an entire topic on its own.
  • “I’m overwhelmed with trying to declutter my house. Is there help to tackle this?”
    • This may have gotten the most “spouse elbows” (you know, the elbow from your spouse when a topic you’ve been avoiding comes up). The overall consensus was to take small steps. For example, take one item or one room at a time. Many stated they do not want this to be a burden on their children or surviving spouse, but the thought of decluttering is simply overwhelming.
  • “The kids don’t want my stuff.”
    • It was difficult for some to accept that their children don’t care to inherit physical items. The group suggestion was to communicate with adult children, so things can be sorted through now, rather than at a time of sickness, forced downsize, or death of a spouse.

In summary, we learned that downsizing is more complicated than simply selling your current home and purchasing a more desirable home within your budget. There are mental and emotional health factors, community impact, decluttering and hoarding challenges, and a host of other implications that can come into play when embarking on this journey.

BridgeQuest Wealth Strategies is an independent wealth management firm that is focused on helping people manage their wealth with great purpose. We tend to dig a little deeper than traditional financial advisors with our blend of life and financial planning.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

Matt Gazaway, CFP

Matt is a Certified Financial Planner™ professional and Co-Founder of BridgeQuest Wealth Strategies. His primary focus is strategic investment planning for individuals and families nearing a transition point in their lives.   He thrives on connecting, strategizing, and formulating a customized solution for each client.