In this video we look at downsizing your home. When you should do it how to do it,
how to do it the right way and why you would actually want to do it. That's starting right now
Welcome to home buyers school, brought to you by Brookfield Residential.
Hi everyone, I'm Karl. Welcome to another home buyer school video. A channel where you get the
latest strategy tactics and tips from home buying experts and remember if this
is your first time on this channel and you want to get the latest strategies
from the experts hit the subscription button below, hit the little notification
bell so you don't miss anything. So today I'm joined by Kevin French, realtor with
re/max realty, and the question we're gonna answer actually the topic we're
gonna talk about today is downsizing your home. So Kevin why would somebody,
first of all why would somebody want to downsize their home? Usually it's older
people that are empty nesters and their property was built for their entire
family and now the family has moved the children moved out and now they have too
much space. Other than that it would be a younger people that have too much space.
They bought something they thought they need and now it's just a lot of square
footage that's not being used. Are you finding a lot more on that like
not the empty nesters the more younger people thinking oh I've way too much
space. More than you would probably think. A lot of people assume that all down
sizers are empty nesters and that they want to get rid of the home they've
looked in for 30 years and then buy a townhouse or a smaller bungalow or
something like that but there are a lot of people who are shopping now and
understanding this isn't what I need that this is more than I need so why am
I buying that. So it might give them the opportunity to spend the same amount and
just get a nicer property or a property that's located in a different
neighbourhood that's a little more expensive but a smaller property then
they are originally shopping for. And if I wanted to downsize my home regardless
of the reasons how do I go about starting that? Do I just start finding a
home that's much smaller than the one I have now in the same neighbourhood?
You probably like it depends on the demographic and what they're looking for.
Let's use empty nesters for example. A lot of them are going south in the
summer or sorry in the winter, so they're looking for something that is
lock and leave. They want a townhouse or an apartment style condo so they have
the ability to have other the exterior the property taken care of and then
there's a little more safety and owning a property where there's so many
attached neighbors so therefore they can leave the property for months on end and
then pay the bare minimum in terms of utilities and then that's what they're
typically looking for. If you go onto the other side where it's younger
people that don't want as much space as they've once had. They're looking for
just a smaller more property within the community already living or even the
community they wanted to live in more than that.
And should I actually downsize my home to pay off some debt?
So I'm like let's say I'm heavily in debt should I
actually go out and doing that regardless if I'm an empty nester
or for a younger person. Is it really a yes I would I would say yes for sure if you if
you have no need for 600 square feet of your 2,000 square foot home by living a
2,000 square foot home. If you can reduce your monthly output and then use
some of the equity that's gained in your current property to pay off debt, which I
have lots of clients that have done that moved into a 1200 square foot townhouse
from a 2,000 square foot home so a detached home that might be five hundred
thousand dollars now their into a townhouse that's 350. You know take any equity that
you have distributed as necessary and then live a smaller live with smaller
monthly payments. But wouldn't like so devil's advocate on that wouldn't be
like let's say you know you could downsize but wouldn't the equity
that you're building with a with a bigger home over the long term offset
the payments like I guess the payments they'd have when downsizing.
The equity would offset the payments. So like you know the equity that you gain from a
larger home if you downsize obviously you get less equity from that house.
You get less equity but it's not about for those sellers or buyers whatever and
we're looking at it they're not their goal isn't to change isn't to think
about in 25 years from now what am I getting to get out of my property it's
that they're taking on a smaller mortgage that they can presumably pay
off sooner and then have a lifestyle that they're you they don't want to wait
for that lifestyle 15 or 20 years down the road, they want to capture on that
lifestyle now and stop living in excess. Essentially it's not over the top and
they just have space that they don't need and that they don't use on a daily
basis so why bother paying for it. You're paying to heat that, you're paying taxes,
you're paying mortgage on things that you never utilize. So what let's say you
are ready to downsize or you thought about hey you know what I have too much
space or I need to downsize um when's the best time to do it? Like do you just
hey now let's just start as quick as you can or do you actually wait similar like
you buy another house? Now is now is the time to do it particularly for the empty
nesters because and I'm not saying that they need to sell their homes tomorrow
or they should I'm saying now because start the process and in my experience
empty nesters take both three years to move. So they think about it, they talk
about it, they discuss it with their family and then it's a very long process
of what they want to do next. A part of it for some people is denial that they
don't need to they can take care of a 3,000 square foot home, they can take
care of the lawn maintenance and the snow shoveling and it's not that they
can't even when they do so it's it's all about lifestyle choice. If you want to
live maintenance free living where you don't have to shovel and you don't have
to mow lawns and you don't have to worry about home maintenance on your older
property, I would suggest that they start doing the process now because it usually
takes more than they more time than they think and then they've usually
accumulated a lot in the time they live in the home which they need to downsize.
Anything else add in terms of downsizing? I think we're good. Oh perfect.
And so the question of the day I have for you is have you actually downsized from your
current house or thinking about downsizing and why did you do it or why
are you thinking of doing it? Let us know in the comment section below and if you
want to learn more about home buying in the home buying process check out our
videos here and make sure to hit the subscribe button below, the little
notification bell so you keep learning from the experts. Thanks for watching
and catch you in our next video.