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Downsizing with Distinction: How to Move Without Paying Two Mortgages

Downsizing with Distinction: How to Move Without Paying Two Mortgages

In decades past, downsizing one's residence was often viewed as a negative event. However, this perception has shifted dramatically. Many homeowners today are choosing to leave behind their large homes in traditional neighborhoods, opting instead for the excitement of purchasing smaller properties. This choice offers them the opportunity to escape the maintenance of their current homes and enjoy a more vibrant lifestyle. Downsizing to a chic high-rise apartment in an eclectic urban location is hardly what it used to be in your parents' or grandparents' time.

In fact, many downsizers can sell their homes and purchase a smaller home in their current location to stay near family, as well as a vacation or second home in a new and exciting destination. This not only enhances their own lifestyle but also enriches the lives of their entire family.

As you make plans to downsize with distinction, there will be many emotional decisions to make and lifestyle preferences to consider. The financial implications of your decision are often the most critical aspect to sort through before moving on to the needs and wants of your next home.

When beginning this process, you will want to examine:

  • Are you looking to lower your monthly obligations and maintenance?
  • What will the capital gain tax ramifications be?
  • What will it cost to purchase your next home?
  • Moving costs, staging, and repairs on your current home
  • The timeline needed to make it all happen
  • How to accomplish all of this with minimal stress
  • And perhaps the biggest question of all… “Do I buy first or sell first?”

The answer to this question largely depends on whether you can afford to purchase your next home without selling your current one, either by paying cash or carrying two mortgages until your current home sells and closes.

Many downsizers find owning two residences very stressful, which is why most prefer to sell first before buying or closing on their next home. Some who have large sums of cash on hand may choose to pay cash, moving many if not all of their possessions to the new home before listing their current residence.

To make the right decision for you, it is best to discuss all options with a professional real estate agent, talk to a lender if financing will be needed, and consult with your CPA or tax attorney. Once you have all the answers you need to make the financial choices that are right for you, you can then create a transition plan that is both comfortable and practical.

This big move can be emotionally taxing, and to make it less stressful, you may want to begin de-cluttering and staging your present home well in advance. If repairs or upgrades are needed, the advice of a professional real estate agent will once again be helpful. A professional real estate agent knows exactly what should be done to a property to help maximize its value and will help you avoid spending money unnecessarily. Most real estate agents can provide you with referrals to stagers and other services that you may need as you give your home a tune-up.

Tips to Consider:

  • Contact the professionals you need to assist you in this process well in advance of your move.
  • Do your research on your next destination. If leaving the area, your local agent of choice can connect you through their referral network with a high-quality agent to assist you with your next purchase.
  • Consider an extended visit or at least commit to spending some quality time in your future neighborhood or town to determine where exactly in that area you feel most comfortable.
  • Conduct a preliminary de-clutter by offering family the items you are not interested in moving, so you can pare down your possessions before a garage sale or estate sale.
  • If moving to a condo or retirement community, carefully review all association fees, documents, and any other details about the complex or building.
  • An out-of-the-box tip: close off rooms in your current home and practice living in the reduced space to determine if a smaller property will work for you.

In Calabasas, known for its luxurious homes and affluent residents, the process of downsizing takes on a unique character.  Getzels Group Specializes in helping client Downsize. Calabasas homes are often spacious and opulent, making the transition to a smaller property a significant change. Calabasas has the highest number of high-net-worth seniors in the United States, many of whom are looking to downsize without sacrificing their quality of life. By following these steps, you can ensure a smooth and stress-free downsizing experience in this vibrant community.

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