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Here are 4 things realtors tell buyers looking to downsize
Selling and buying at the same time requires careful preplanning.
A cascade of questions begins when someone decides they’d like to downsize into a smaller home. Does my current house need work before hitting the market? Can I swing buying and selling at the same time? How will I pare down my stuff?
On top of that, navigating the current real estate market — in which interest rates are high and home prices are climbing — can be a stiff challenge. To help empty-nesters, realtors have a few key pieces of advice to ensure a smooth home sale and purchase.
1. Reach out — and get educated on the market — early.
Connect with real estate professionals as soon as possible, said Ronald Trapasso, a realtor with the Wilson Group at Keller Williams Realty–Chestnut Hill and a National Association of Realtors-designated Seniors Real Estate Specialist.
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It may sound like common sense, but reaching out early can help prevent situations in which you’re shocked to discover that one floor of a three-decker is selling for more than triple the amount you originally bought your home for.
Sven Andersen, with Andersen Group Realty, Keller Williams Realty Boston NW, hosts an online downsizing seminar for his clients, helping them understand what they have to work with from an investment standpoint. He reasons that today’s buyer is not the same buyer who was looking 30 years ago, which is why market education is so important. “I was with a client last night, and when I talked to them about what the sales price would be for their house, they almost fell out of their chair,” Andersen said.
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2. Get creative with your financing and negotiation tactics.
It’s a careful balancing act to sell your existing home and move into a new one during roughly the same time frame. To help even things out, Andersen recommended negotiating for a leaseback, or an agreement in which you rent your home from its new owners for a set period of time until you can move into your new place.
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“I’d say about 50 percent of the transactions that we do have some kind of leaseback option for a transaction, whether that’s a couple days to multiple months,” Andersen said.
On the other hand, if you’ve found your dream unit but your house hasn’t sold yet, you can opt for a home equity line of credit, or HELOC, to fund your down payment.
“If someone’s owned their home for 10, 20, 30 years, or more, they likely have a ton of equity in the house, meaning the value is much greater than what’s owed on the mortgage,” Trapasso said. “A lender is going to be willing to lend them a good deal of money based on that value.”
3. Don’t rely on filtered searches.
Many people who are looking to downsize are concerned about their future home’s accessibility; features like single-level living are often top of mind for aging into a space. But online filtering may not always show you what you’re looking for, said Kate Ziegler with Arborview Realty in Jamaica Plain, because details on the Multiple Listing Service can be limited.
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“Listing whether a building has an elevator is not a mandatory checkbox in the MLS, and it is also just a checkbox,” Ziegler said. Similarly, if you’re seeking out first-floor living without too many stairs, your search parameters could lead you astray. “In hilly parts of Boston, you could have 20 steps up to the front door, but it’s still on the first floor,” she said.
4. Consider renting.
If coordinating the timing of a home sale and purchase feels like too much pressure as you downsize, you can always sell your home and rent until you find what you’re looking for. “Renting temporarily can give you time to explore different areas and options,” said Rahel Choi, a broker associate with eXp Realty. With fewer belongings — and funds from the home sale in your pocket — you’ll be primed to find your ideal next home.
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