Making Big Decisions – Downsizing

My husband and I are now facing the dilemma of downsizing. Do we sell the house we have been in for 22 years and buy a town home or condo? No more yard work, snow removal, exterior upkeep. In exchange, we pay HOA dues (Homeowners Association), lock the door and can go on vacation.

Is now the right time? Do we give up a 2.875% mortgage? Can we downsize enough to pay cash? Will I even like living in a town home community?

There are many podcasts and articles out there about making big decisions. In listening to them here are some things I’ve learned.

1. Define your goals
   • In our case, it is about traveling. We do not have to worry about the upkeep on the exterior of the home. We can lock the door and leave.
   • You will want enough room for grand kids to sleep over but not too much area that costs go up. You are downsizing!
   • Harvesting the equity in our current home to pay cash for the new town home – with no mortgage. This allows for us to have lower costs as we move to a fixed income.
2. Do your research.
   • What location do you want to be in?
   • Where are your family and friends?
   • Will this make your life better?
3. Picture yourself in 5 years from now.
   • How is your health? Does it have a first-floor master bedroom?
   • Will you live there year-round or somewhere else during winter months?
4. What are the Pros and Cons
   • Make a list – usually making an actual list on a piece of paper helps. It is a visual way to make your decisions much clearer. Many times it becomes a “no brainer”.
5. Prepare for possible worst cases
   • What if I don’t like town home living?
   • Worst case, you create Plan B.
6. Timing
   • Is this a good time to be moving? You may need to wait until a child to graduate from high school/college to make a big move.
   • Do you have the time to make the change? Sometimes life can be so busy, you may need to wait until things slow down a bit.
7. Always take time to “sleep on it”
   • Sometimes going to sleep and waking up the next day gives you the best clarity. Do you still feel the same way about moving forward with this big decision? Is something holding you back?
8. Trust your Instincts
   • Most of the time, your intuition is your best guide.
   • Take a walk in nature, think, listen to your gut.
9. Remember, making no decision IS making a decision
   • Sometimes this can be a great decision until your goals become clearer to you.
10. Then – Go For It!
    • Remember, most of what happens in life can be changed if it doesn’t work out. It could be a great learning experience. It’s part of your journey!

Conclusion

As I write this blog, we have made an offer on a beautiful town home. But someone outbid us and won. Here’s what we learned in this process.

First, it is still an extremely hot housing market. Even Fed Rate cut of .50 basis points, the market continues to be a sellers’ market. This is because of the housing shortage.

Second, Schwab has a Pledge Line of Credit option. We use our current assets in one account to pledge for a line of credit. There is no annual fee and it is extremely easy to set up. This can help you purchase your next place for cash.

Finally, get creative. We had a subdivision we were very interested in. We wrote a letter, comment to me if you want a copy. We gave the letter to all the current homeowners and by putting it in their doors. Our letter stated that we were cash buyers looking for a town home. So far, we have had 4 phone calls of owners interested selling a town home to us!

Making a big decision like downsizing can be difficult. But, enjoy the process. Do your homework and then Go For It!