Tips On Downsizing Your Home

In different times of life, individuals need different things from their homes. Over the course of your lifetime, the amount of square footage you desire can change, your budget can increase or decrease, and your preferred location might change. But at some stage people downsize.

What does downsizing mean in real estate?

Downsizing refers to moving from a larger home into something more manageable. That can mean a home with less square footage, a home with less land to take care of or a home with fewer bedrooms.

Downsizing is most common in the demographic known as empty nesters — people who are still currently living in the home where they raised their kids, but whose kids are grown. With no demand for big yards, multiple bedrooms and proximity to colleges, these homeowners often transition to a home that better reflects what they want out of the next phase of life.

Benefits of downsizing your home

Whether you’re retiring, you’re a recent empty nester, or you also have another reason to consider moving, you may be asking yourself,”Should I downsize my house?” Here are a few important benefits of downsizing.

Downsizing a house to save money or time

To fund retirement: Downsizing either because you are planning on retiring soon or because you have already retired is frequent.

A lower monthly mortgage payment allows you to put more money in your retirement accounts. Or, depending on how long you’ve lived in your home, you may be able to sell your home with enough equity to buy a smaller home in cash, meaning you can go into retirement mortgage-free.

To get out of debt: If you’re attempting to get out of debt and have a decent amount of equity in your home, you may be able to market, pay off your debt, and utilize your remaining equity as a down payment on a smaller home.

An important note: Keep capital gains taxes in mind. The first $250,000 (if you’re a single filer) or $500,000 (married filing jointly) of profit you make on your house is exempt from capital gains taxes.

But if you’ve lived in your home for many years, and/or if you reside in an expensive real estate market and expect to make more than that, you will want to factor in the taxes you’ll have to pay.

Downsizing a home to suit your lifestyle

Less maintenance: If you move from a single-family home into a condo or townhouse, you are going to minimize yard work, maintenance and cleaning time, giving you more free time.

Move closer to family: If you have children or grandkids that live far away, relocating while downsizing can cut down on the travel time required to visit the people you care about.

Be nearer to the things that you want to do: Individuals’s priorities, interests and social circles change over time, and downsizing can make it possible for you to be closer to the activities you want to do.

Focus on future demands: If you are concerned about mobility in future years, it may make sense to move from a large two-story home to a smaller ranch-style home without stairs. .

Helpful downsizing tips

Despite all the benefits, the actual process of downsizing is stressful, both in terms of the actual to-do list and the emotional impact. Here are a few tips for getting started.

When should you downsize your home?

The first step is determining when to downsize, and both finances and your lifestyle factor to the decision. Here are a few indicators it may be the ideal time.

The market conditions are great: Ideally, you want to market in a sellers market, then proceed to a buyers market — that’s how you will pocket the most money.

It is peak selling season: Determine the best time of year to sell in your real estate market (hint: it has a good deal to do with the weather) .

You want the equity: People often decide to market to access some of the equity they have in their home, perhaps to assist fund a child’s or grandchild’s college education or to pay medical expenses.

Your mortgage is unaffordable: If your monthly mortgage payment feels too pricey based on your current income, it is better to downsize sooner rather than later.

Your lifestyle no more takes a large space: If you no longer desire extra bedrooms, a large yard for pets or a big home office, why waste more time at a space that doesn’t suit the way you reside?

The best way to downsize your possessions

If you are downsizing your home, you will probably also minimize the amount of stuff you bring along with you. Focus on keeping what’s necessary and diluting exactly what you won’t want in your new home.

Start early: Don’t underestimate how much stuff you have, and don’t wait until packing the time to start purging. Take inventory of just how much stuff is tucked away in the attic or garage, and provide grown kids enough notice so they can pick up any of their youth possessions. By starting early, you won’t run out of time and have to take extra stuff with one to the new home.

Stay organized: Make an inventory list (this can also be helpful if you’re hiring movers). Create three piles — keep, donate or market — and be decisive! Don’t create a “maybe” pile. As soon as you’ve gotten rid of all the surplus, put everything you’re storing in labeled boxes, ready for the new home.

Prioritize: Have you used it in the last year? If not, then get rid of it, unless it holds sentimental value. If you don’t have room in your new home for keepsakes or heirlooms, think about passing them on to other family members.

Measure the new home: You might find floor plans on the internet, or you can have your agent request access to measure the home you’re purchasing (or the buyer’s agent may do it for you).

Start with furniture: Furniture takes up the maximum space and is the lightest to maneuver, so take a hard look at the layout of the home you’re moving into and only bring furniture to fill the space. For example, if you are moving from a 3-bedroom into a 2-bedroom homeattract two bedroom sets and make sure they’ll fit from the bedrooms.

Consider your lifestyle: If you are making a significant lifestyle shift, there’s likely lots of stuff you no longer desire. Moving to Florida? You probably don’t want your gear. Moving into a condo? Say goodbye to your lawnmower. Don’t keep things “just in case.”

Digitize everything: Blend all photos, CDs and DVDs into digital formats and save them on the cloud for easy access. If you don’t have the time or know-how to do it on your own, there are services that can do it for you.


  • Expired medicine
  • Ill-fitting clothes
  • Broken things or anything with missing parts
  • Unused kitchen appliances (if you haven’t used it yet, you are unlikely to)
  • Oversized furniture that won’t fit on your new home
  • Big items that are gathering dust (like unused exercise equipment)


  • All important documents, including birth certificates, diplomas, social security cards and investment paperwork
  • Valuable antiques (unless you’re ready to sell them)
  • Full collections of items (maintain at least one complete set of silverware, dishes and tools)
  • Emergency kit (no matter where you live, keep a toolbox, stepladder, fire extinguisher and first-aid kit)
  • At least one formal outfit for a wedding or special occasion
  • The best way to downsize: Selling and purchasing (again)

Another huge hurdle people face when downsizing is figuring out the logistics of selling the old home and purchasing a new home at the same moment.

What do you do if you have found the perfect new home, but you need the equity from your current home to purchase?

Make an offer with a home-sale contingency: This is when you make an offer on a new house, but with the caveat that you have to sell your old home before you can close on the new home. It’s also called “making a contingent offer.”

This works best in a competitive market. In a sellers market, a contingent offer makes you appealing to the seller than other potential buyers.

Sell first and buy later: To simplify the process, you can sell your home first, move into temporary housing and then start your home search.

Get a line of credit or a reverse mortgage: Talk to your bank about financial solutions that would allow you to access the equity in your home before the sale closes.

Dive into your retirement account: Always check with your financial adviser before researching this option, as there can be taxes and penalties.

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