Are you ready to downsize? Now may be the perfect time

Home Selling

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When Doug and Beth Dry, 60 and 59, respectively, discussed putting their home on the market in late March of 2020, they didn’t know what to expect. Their real estate agent didn’t, either. 

At the time, homes in their idyllic beach town of Madison, Connecticut, were struggling to sell even before the coronavirus pandemic set off lockdowns across the country.

The empty nesters, who have three adult children ages 25, 30 and 32, had considered downsizing in the past. But when they weighed the costs of what they could get for their 3,000 square-foot, four-bedroom colonial and what they would pay for a house in the area around 2,200 square-feet (smaller, but large enough to host grandkids), the financial benefits just weren’t there. Instead, they opted to rent out a portion of their home that they no longer used. 

But things changed when Doug, a pastor, began conducting a job search that may involve an out-of-state move. Still unsure of when and where they would relocate, the couple pulled the trigger in June and placed their house on the market. To both their and their agent’s surprise, the home sold in two days. It garnered three offers and went for $10,000 over asking price.

Despite the initial dip in home sales in early spring, COVID-19 has brought about an unexpected real estate boom. With first-time buyers taking advantage of historically low-interest rates and other shoppers searching for larger homes, this may be an opportunity for homeowners who want to downsize to cash in.

What to consider before putting your house on the market

Under normal circumstances, deciding to downsize is not an easy choice to make. But the pandemic and the resulting economy add more layers of complexity. 

Before putting your home on the market, be sure to weigh all aspects of the decision. Downsizing may seem like a cost-saving measure, but with this market take a step back and calculate all the possible financial scenarios. 

Here are a few things to think about.

1. Showing your home during the pandemic

The coronavirus has significantly altered the home-selling process, so expect a different experience from when you last sold or bought property. 

While it was common for buyers to begin their home search online pre-pandemic, even more of the process takes place virtually now, from tours to closing.

For events that do take place in person, expect changes. For example, the Drys’ agent offered home showings in batches, holding six to seven tours each day their home was on the market. And only pre-approved buyers were allowed to see the house.

2. Crunching the numbers

Before jumping into the selling process, give thought to the next home you’ll be transitioning to. There are more buyers than properties right now, particularly in the suburbs. So get an idea of the availability of smaller homes in your area and your price range.

Data from the National Association of REALTORS (NAR) shows the typical home purchase was $339,400 during the pandemic, compared with $270,000 before. Demand and prices for rentals are also high.

Looking at the numbers for both a new home and the value of the property you’re selling will shed light on whether it makes financial sense to buy right away, or perhaps sell your home now and delay the new purchase, as the Drys plan to do. 

The couple is downsizing in stages; they ended up renting an apartment near one of their children in Beverly, Mass., while Doug continued his job search. Having landed a position recently, they plan to familiarize themselves with their new community before purchasing again.

3. Choosing the best time to sell

Experts expect the housing market to remain strong. Still, the timing of putting your home on the market will affect the success of your sale. Spring usually brings in an influx of buyers looking to make moves before the fall and new school year. Winter can mean fewer shoppers and potentially a lower selling price.

Beth, who was a real estate agent for about four years, suggested that if you have any control over when you place your home on the market, do so when the weather is pleasant in your area. She said being able to leave the windows open during her showings (as part of pandemic safety measures) and leveraging natural light helped showcase the home in a favorable way. 

Additionally, because it was late spring into summer, she said most of the prospective buyers weren’t thinking about heating costs and other cold-weather expenses and hassles. 

Given the size of their home, that may have been top of mind for buyers during the winter months. Your real estate agent will provide insight on the best time to list your home in your particular market.

4 ways to make top-dollar on your home sale

Maximize the current market conditions and increase your profit with these tips.

1. Work with a high-caliber real estate agent

Some sellers forgo working with a real estate professional to avoid paying a commission. But that move could be counter-productive. According to NAR, For-Sale-by-Owner properties usually sell for less than agent-assisted homes.

When looking for a real estate agent, find one who is trustworthy, personable and has a good track record. Specifically, inquire about their experience with selling during the pandemic, and make sure they are up to speed with virtual tools.

2. Complete upgrades strategically

Sinking a lot of money into renovations to increase your sales price can backfire, as you may not recoup what you spend. Pay attention to the areas that will up your home’s “wow factor,” such as kitchens and bathrooms. And focus on upgrades with a high ROI, such as updating your front entry. Your real estate agent can especially offer some guidance on this topic.

3. Declutter

One of the driving forces behind the buying frenzy is that buyers want more space. So do what you can to give that impression. Overly crowded closets and cabinets signal a lack of space and storage. Clear out whatever you can before showing your home. You’re moving anyway, so you might as well begin the process. It will save you time and stress on the back end of the sale.

4. Highlight the versatility of rooms and spaces

If you have a room that can pull double duty, such as a nook that can be a home office or workout room, illustrate that during your showings. Homes with flexible spaces will appeal to a variety of buyers.

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