For those who are downsizing their home, there are a unique set of considerations you need to be aware of. When it comes to different situations and scenarios, Loan Consultant Connie Lindsay has seen it all, and she offered a few of her big observations that downsizers should carefully consider:
- Determine where you want to move to. 95% of the time, retired people who are downsizing are wanting to move outside of Seattle. As they look to sell their home, the goal is of course to get the largest profit possible so they can comfortably buy a new home and ideally have some cash leftover.
- Research price points. Especially for people living in Seattle who are ready to downsize, many older people who have owned a home for awhile aren’t aware of how much homes cost, whether in Seattle or elsewhere. Many people in their 60s think they’ll be able to sell their home and profit $500k to live off of, but the market’s not like that anymore. Having a clear financial picture is of the utmost importance.
- Put together a long-term financial plan. Many retirees just have not properly planned for their financial situation as a retired person. Most people will live until they’re 85 or 90 years old, and if they’re in their mid-60s, they need to plan to live another 20-30 years. Most people will be on a fixed income, and many people expect to profit enough from selling their home that they’ll be able to live on it.
A Real-Life Scenario
Recently, Matt worked with a seller, Tracy. She contacted Matt because she was retiring, and she needed to sell her condo. Tracy was a dream client in that she contacted us 7 months before she intended to sell her place. That was perfect!
We starting planning for the next steps. Tracy needed to pull out as much cash as possible from her home, and her goal was to buy her new place with cash. We needed to give her current place a makeover to sell it for top dollar, so we had Tracy move out and rent a place.. She’ll probably end up spending $100k with the remodel, and while it’s not quite done yet, according to our previous experience in the same building this remodel will probably net her $300k in the end!
We also talked about where Tracy wanted to move. She had been thinking about moving to Bainbridge or Port Orchard, and she decided to find a place to rent while she tried out different neighborhoods. (This was perfect for us, as we needed her to move out of her place while we upgraded it!) After Tracy really figures out where she’d like to settle, we’re going to connect her with a broker who is an expert in the area she wants to live in.
Long story short, Tracy did it right. She contacted us early, the money from her sale will come in, and it will be smooth—all because she had the foresight to plan. Especially if you’re planning to try and make changes to your home before selling, you’ll definitely want to call us in advance. 3-6 months to take a remodel into account is ideal!
Have a question? Don’t hesitate to get in touch with our preferred lender, Connie Lindsay! You can reach Connie at 206.979.0900 and learn more at CaliberHomeLoans.com.