By Amanda Arvin, Ray White Long Jetty
The only constant in life is change. While the thought of selling your family home and starting a new chapter of your life may feel overwhelming, it also creates the opportunity to take control and enjoy what’s important to you – your family, your security, and your finances.
Downsizing into a smaller and more manageable home can free you from the stress and cost of maintenance. It can also alleviate concerns around your own safety as you age/move into a later stage of life. Selling one home and moving to another can be daunting. Every day, downsizing sales specialists help singles, couples and families work out the value of their homes and then create a plan for all the next steps. It may be an urgent move, or it may be a 12–month plan or longer.
BENEFITS OF DOWNSIZING:
- Easier and lower maintenance allows increased independence and a more relaxed lifestyle
- Financial benefits. You might be asset rich, but cash poor. Downsizing allows you to tap into the equity locked in your home and liquidate this asset
- Location and lifestyle change. Selling your existing home may open up the opportunity to relocate to a new area as you approach retirement
- Upgraded amenities that match your changing needs which may include access to public transport, shops and parks etc
- The Government offers financial incentives to assist downsizers, which include the ability to make a voluntary contribution into your superannuation from the proceeds of selling your home. This can further help set you up for retirement. Visit www.ato.gov.au for more information.
NOT SURE WHERE TO START? TALK T YOUR FAMILY
Talk to your family about your wishes to sell the family home, so they are part of the process from the start. There’s never an easy time to let go of a family home and it’s normal to have some trepidations. Open communication with other family members can help the decision come more naturally, and generally help achieve a better outcome.
CONSIDER FINANCIAL IMPLICATIONS
Downsizing can allow you to liquidise an asset which may help set you up financially as you approach retirement. It’s worth considering including the opportunity to make voluntary contributions into your super (read more at www.ato.gov.au) and whether selling your home will impact your pension (read more at moneysmart.gov.au).
UNDERSTAND YOUR PROPERTY’s VALUE
Contact a local agent for a property appraisal. Once you have a better understanding of what your current property is worth, you can begin planning with family members when and how you should take your property to market, and how much you can afford to pay for a new home or rental. This could be simply in a smaller property or perhaps in a retirement community.
CHOOSE AN AGENT
Agent checklist:
- Relevant experience selling properties similar to yours in your price range
- Strong reviews and positive feedback from past clients
- Local knowledge of the market and how to sell for your neighbourhood
- Large database of active buyers who could be interested in your property
- Good honest communication and personal rapport with you and buyers
- Professionally licensed in your state
- Is sensitive to the emotion surrounding selling your home
- Will help make your transition as seamless as possible.
TALK TO A TRUSTED MORTGAGE BROKER
Mortgage brokers work in your best interest, to find the right finance solution for you. A mortgage broker will help you understand your options and the right way forward when it comes to downsizing your home. This includes, organising a bridging loan to cover the period between when you buy your new home and when you sell. If you don’t already have a trusted mortgage broker, your chosen agent may be able to put you in touch with a locally recommended broker.
SELL FIRST vs BUY FIRST
Often selling your current property will mean buying another one at a similar time. This poses a few common questions among people making two very big decisions within a small period of time.
So, which comes first? It’s never an easy call. Here’s some hypothetical scenarios involving each option.
SELL FIRST
- You can wait until you get the price, you’re happy with for your existing home with no pressure
- You can go shopping for your new home knowing exactly how much you’ve got to spend
- You’ve got time to shop around and possibly negotiate better deals, particularly if your buyer agrees to an extended settlement period
- You can avoid the hassle and expense of bridging finance – which you’ll need if you end up owning two properties at the same time
- But if your old home sells faster than you planned, you could face the stress of having no place to live while you look for a new home.
BUY FIRST
- You can spend as much time as you like shopping around for your ideal next home, instead of feeling pressured to take anything just so you’ll have somewhere to live
- You don’t know exactly how much your old home will sell for, so you can’t lock in a budget for your new place
- If your existing home doesn’t sell fast enough, you may have to get bridging finance to fund both properties while you’re changing over
- You may feel pressured to accept a lower offer as your new home settlement gets closer
- You may not get as much as you hoped for your existing property, and have to make up the difference with your savings or a larger loan.
Ray White Long Jetty is a locally owned and operated Central Coast real estate agency located in Long Jetty. With a combined 60+ years of sales and property management experience, we are trusted in our community to have your most important asset nurtured and taken care of. We’re here to help with all your property needs, contact us on 02 4360 4360 or longjetty.nsw@raywhite.com. Visit us at raywhitelongjetty.com.au or 1/393 The Entrance Road, Long Jetty NSW.