Thinking of downsizing?

By: Wasim Jarrah, ABR, CNE, SRES

Thinking of downsizing?

Tags: Newmarket Real Estate, Aurora Real Estate, Aurora Homes, Newmarket Homes, Real Estate, Downsizing, How to downsize, Newmarket, Aurora, Homes,

Canada’s housing market has been on a terrific run, helped by low interest rates, pushing home values up and tempting downsizing baby boomers looking to add to their nest egg into cashing out. This certainly includes York Region and the Newmarket area.
But the decision to sell the family home isn’t one that can be rushed and requires careful planning, with discussions starting sometimes years before you list your home for sale.
If you don’t start talking about the move well ahead of time, you could end up in a situation where your family is forced to make decisions for you. When contemplating this decision, depending on your age you may want to include your children in this decision.
If you’ve owned your house for a long time, you’ll likely look to sell for a lot more than you paid for it, especially if you live in a hot market such as Newmarket and surrounding areas. House prices in the Newmarket area have increased over 80% in some neighborhoods over the last ten years.
The good news is that you will likely be able to avoid paying capital-gains tax on the sale because it is your home and principal residence.
Early retirement might make sense if downsizing from a large property that is no longer required and funds from downsizing are available after acquiring your new smaller home with smaller bills and maintenance.
But selling in a hot market could also mean having to buy in a hot market, unless you’re looking to move to an area where real estate is cheaper than where you currently live and there are those areas in close proximity to Newmarket.
It’s important to have a realistic idea of what your home is worth and the costs associated with selling when considering a plan to downsize. That’s where your neighborhood realtor comes into play.
Most people have a tendency to over evaluate their home, so getting a third-party evaluation of your house is very important and makes sense.
Real estate agent fees, movers, land-transfer taxes and the cost to set up a new home will also all eat into the amount you receive from the sale of your home.
However you do not want to make the mistake of downsizing too small and finding out it is difficult to work with.
Before considering this, remember selling the family home may be about more than the money or reducing the number of bathrooms you need to clean or the size of the lawn that requires mowing, snow shoveling. All the years spent with family, family dinners and holidays, kids, grandkids can be an emotional one and maybe not selling might be the decision to be made.
All things to think about before making the decision.