For most of us, part of the motivation to downsize is saving money. But hidden costs can crop up, especially if we’re moving from a home we’ve owned for years.
When my family moved from Massachusetts to Pennsylvania three years ago, leaving a house we had lived in for 15 years, we made several of these mistakes. Next time we’ll know better.
1. They don’t inspect their home before they list it
“This way you can address any surprises that may come up. You can really avoid some headaches by doing this,” says Realtor Bill Tierney, who works south of Boston.
When we sold our house, we skipped this step. Our house was well maintained, and we took care of the minor upgrades and repairs before we listed. Turns out, we didn’t realize we had a broken rafter — it was an expensive and embarrassing mistake to have the buyer’s inspector uncover.
2. They don’t interview multiple agents
If you’ve lived in your home for years, you probably know a real estate agent — maybe your daughter’s soccer coach or your neighbor’s brother. That person isn’t necessarily the best person to sell your house. You want an experienced agent who will help you get the highest price for your house, quickly.
Have multiple agents estimate your home’s value. “Talk to them about why they believe in that price and how they are going to find the right buyer,” says Ashley Baskin, a licensed real estate agent who serves on the advisory board for Home Life Digest.
Beware of the outlying high price, warns James McGrath, co-founder of the New York City real estate brokerage Yoreevo: “If two or three agents are around the same number and one is 20% higher, you know that last agent is trying to win your business with an unrealistic price.”
3. They overvalue their home
“Your home is not worth what you think,” says Jose Hernandez, a real estate consultant with Coldwell Banker in Chicago. “I understand you have lived there for years and have done home improvements or upgrades, but you have to be realistic and understand your home is worth what today’s market demands.”
I was guilty of this. When we listed out suburban Boston home three years ago, the market was hot and I was disappointed in the listing price our agent suggested. But we trusted her, and our trust paid off — we had multiple offers over our asking price within days of listing.
4. They aren’t smart about upgrades and remodeling
“Not all home repairs are created equal,” says Tyler Forte, CEO of Felix Homes, a Nashville-based real estate startup. “Often, we see owners complete repairs in preparation for listing their home on the market that will not produce a return on their investment. I’d say about 75 to 80% of home repairs and upgrades will not produce a positive ROI.”
Downsizers also sometime remodel in a dated style, or with low-end finishes. “Buyers want to buy something that’s in style now, not what the sellers like,” Hernandez says.
It may not be worth it to tackle expensive, stressful remodels, like the kitchen or bathrooms. “Instead, be up front with buyers about the need for a remodel and reflect this in the price,” says Ali Wenzke, founder of the blog, The Art of Happy Moving, and author of The Art of Happy Moving: How to Declutter, Pack, and Start Over While Maintaining Your Sanity and Finding Happiness.
Cosmetic upgrades can make a difference, though. “The value of a home can be dramatically impacted by making cosmetic changes,” says San Francisco-based real estate agent Chris Lim. “Making a small capital investment will change not only the selling price but also the speed in which your home sells. For that reason, we highly recommend that sellers consider new paint, new floors, new carpet, landscaping, and staging.”
5. They skip the easy fixes
“If it is less than $1,000, repair it. Home buyers do not want to buy homes when there are multiple minor repairs to be done,” says Baskin.
Forte says it’s generally worth it to repaint dark or dirty walls, deep-clean carpets and hardwood floors, spruce up the front door and entrance, swap in new LED light bulbs, and tidy up the yard. “Many of these projects cost less than $300 and take less than a weekend to complete, and they make a real difference when it comes to listing a home,” he says.
6. They try to do everything themselves
Sure, you could do it all, if you had unlimited time. But downsizing is a big job. It may be worth paying to get your carpets professionally cleaned, hire a landscaper to spruce up your yard, have an organizer help you declutter, or book a handyman to tackle small repairs.
7. They think they need more space than they do
Hernandez sees people eliminate otherwise perfectly good properties because their living room furniture or bedroom set won’t fit. “Try not to fit your current furniture into a new place. Instead, try to sell your current home with your furniture and simply buy new furniture for your new place. It’s a new beginning after all,” he says.
8. They don’t think through what life will be like in their new home
“Downsizers think about real estate taxes and downsizing first and foremost,” says Alison Bernstein, founder and CEO of Urban Jungle. “They need to turn their attention to how they will be meeting people, socializing, and spending their days.”
Hernandez recommends touring different neighborhoods, condo buildings, and communities, and attending open houses to get a good feel for their new home before buying. Is your new home close to the things that are important to you, like family, shopping, and nature?
“Visit your prospective new home at various times,” says Patrick Frank, head of sales with the commercial real estate service Biproxi. You want to get a sense of rush-hour traffic and see what the neighborhood is like at different times and on different days.
9. They commit too quickly
People assume an area is right for them, says Mary Burak, a Realtor with Berkshire Hathaway based in Northridge, Calif. “Many times, I encourage my clients to rent for a while if they are relocating out of state. I had one client who didn’t do this. She ended up making a big mistake and moving twice. She lost her one-time tax exemption and ended up having to pay a ton in taxes,” she says.