7 costly mistakes to avoid when downsizing your home for retirement
It’s Scott, here!
Are you thinking about downsizing for retirement? According to a Royal LePage survey, 1.4 million boomers across Canada are planning to purchase a home in the next five years. Whether you’re planning on making the leap now or in the coming years, it’s important to know the dos and don’ts of planning for your future.
Here’s seven of the costliest mistakes I see clients make when it comes to downsizing.
1. Making a list but not having a plan
This is a big one. While it may seem obvious what you want now, without taking the time to evaluate your priorities, you may be short-changing yourself of the life of your dreams.
It’s likely that the decision to buy your current home was based on your job and your children, but now is the time to put you and your partner first! The best place to start is by asking yourself some important questions:
- What life do you envision for yourself?
- What do you want to do more of?
- What does your ideal community look like?
- Do you have a pet or are thinking of getting a pet?
- Do you imagine yourself in a condo? A house? Something else?
- Do you want to go more rural or urban?
- How close do you want to be to your family?
Chris and I put together a vision board to create a more concrete plan for what we want out of our retirement. We knew we wanted a dog (which is how Steve came to be), so we knew we wanted a yard for him to run around in. We love the outdoors and adventure, so we wanted to be close enough to trails and a marina so we could get out on our boat. These wants were all factors that narrowed down our ideal home and community.
By creating a vision board (or at the very least a list of your needs and wants), you can begin making those dreams a reality! Additionally, a vision board is a great visual to remind you of the great life you’re working towards throughout the process.
Helpful Tip: Take a look at Maclean’s customizable ranking of “Canada’s Best Communities” to get a better idea of what area would fit you best!
2. Not consulting your spouse about their vision for the future
It’s easy to make assumptions about your partner’s wants and needs—after all, you know them best! However, I’ve seen a lot of spouses think they’re on the same page… until they’re not. Oftentimes one person is more ready to downsize than the other. Other times one spouse is dreaming of stress-free condo living while the other wants a backyard and a large garden. These misunderstandings can create a hesitancy to make any moves, not to mention a great deal of stress on the marriage.
It’s best to have these conversations early to understand what each other wants and what you’re willing to compromise on—a happy spouse is a happy house. Creating a vision board is a great first step to having these important discussions, as it allows for a fun way to work through any differences the two of you might have about your future.
Take, for example, Deb and Steve. They just recently spent $200,000 renovating their city home, but Deb admitted she really wants to retire to a bungalow in the Niagara region. However, Steve still has business ties to the GTA. Some discussion is in the works, and a vision board is on its way to help them sort through their options.
3. Waiting until the end to declutter
Whether you’re just starting to think about downsizing or have pulled the trigger and decided to move, now is the time to declutter. I’ve seen many couples stumble upon their dream home in a great area, but they missed out on a great opportunity because they hadn’t started that decluttering process.
While I know it seems daunting right now, Joan Ulrich, our friendly neighborhood transition specialist from TLC Moving Solutions gave us some great tips to manage the mayhem.
- Schedule the time in your calendar
- Create a tool kit that you can grab and go (i.e. garbage bags, markers, tape, water)
- Start one room at a time
- Begin with bigger items and move to smaller items
- Use coloured dots or painter’s tape to mark what is staying and going
- Don’t let the clutter linger—sell or donate your items right away
And don’t feel like you need to do all of this on your own! There are great companies out there (Including TLC Moving Solutions) that bring a professional and helpful approach to decluttering.
Now if you come upon your dream home in your ideal area and need to jump on it quickly, you won’t have all your stuff holding you back!
Dean and Linda couldn’t let it go!
At the start, Dean and Linda had 30+ years of belongings and planned on relocating to another community outside the city. They decided to buy first, which naturally gave them a short timeline to get their home ready to list. They rented two extra-large lockers and shuttled the clutter into storage. This was a quick fix and not an ideal situation since they had to move everything twice. Then their new home was packed with clutter, leaving them sorting through piles of things for months.
4. Not hiring the professionals early on
It may be tempting to try out some DIY when it comes to downsizing, but I can promise you those countless hours of stress just aren’t worth it for the money you would be saving. Give yourself permission to hire help—after all, this is the time to focus on you!
Real Estate Agents
Anyone who has ever moved knows the whirlwind of emotion that comes along with the process. Real estate agents can remove some of that stress by taking one of the most anxiety-inducing parts of downsizing off the table: buying and selling your home.
Real estate agents give you help, advice, and advocacy, and can provide you with
- Local real estate sleuth and knowledge
- Tips for simple and inexpensive renovations with the biggest payback to get your house ready for the market
- An estimate of your home
- Home prices and inventory in the places you want to move
- The best time to list and buy
- Referrals to good, reliable help to get your home ready to sell
- Advice on whether to buy first or sell first
- Their knowledge on re-sales vs new builds
- Negotiations for a good deal
Real estate agents also bring a wealth of neighbourhood knowledge to the table that just can’t be matched. They have the insider scoop about anything from when new builds will be available to how many golf courses are within a 20km radius. According to the Royal LePage survey, 32% of boomers are looking to buy a condo, and 10% are interested in semi-detached/townhomes. Real estate agents can show you the communities where these types of homes are most available. In the case of new builds, they can help navigate builder forms and tell you everything you need to know about pre-construction and assignment purchases.
They’ve seen it all, so you can count on them to anticipate problems and provide solutions. Ultimately, real estate agents take the guesswork out of buying and selling your home so you can focus on the wonderful new life ahead of you.
While you may have a general understanding about your budget and how much money you’ll need to live comfortably after retirement, hiring a financial advisor to go over your investments and ensure you’re getting the most out of your money can be a huge weight off your shoulders. They can also remind you of extra expenses you may not have considered (like increased travel or medical expenses) that may ultimately affect how much you’re willing to spend on your new home.
Are you going to downsize to a smaller home and use the excess to fund your lifestyle after retirement? Have you considered renting a home and using the money and time you save from not having to maintain your home to travel? These are all questions an experienced financial advisor will help you find the answers to.
As was mentioned above, decluttering can be a huge project to tackle by yourself. While you can definitely use the tips and tricks Joan uses with her clients, having an experienced professional and their resources with you throughout the process will ensure an efficient and positive experience, not to mention their outside influence can bring a different perspective to the clutter plaguing your life.
There are great professionals to help you out at every turn of your downsizing journey, so don’t hesitate to ask for help and expedite your happiness!
Persuading Hubby to Downsize to a Condo
James and Nina needed help with downsizing and moving up into a condo. Nina was retired and ready to go, but James was still working and not convinced about moving from his detached home to condo living. So, once we decided to work together and with James’ approval, we began the process of viewing condo buildings together, which got them both educated on condo living. At the same time, we worked on getting their home ready for sale with some fresh paint, new carpeting, and levelling some stones on the front walkway.
In this case we listed and sold their home first. Then they purchased a condo in Square One. The purchase was easy because they had viewed so many apartments and saw what price the units had listed and sold for, resulting in a new knowledge of condo market values in buildings they liked. Bingo, the right one came along, they put in their offer, and we negotiated an agreeable price and closing. Nina is now happily retired in her new apartment and loves her space. James has adjusted well to condo living and wondered why he waited so long.
5. Ending up with buyer’s remorse because you didn’t explore enough
Even if you’ve been thinking about downsizing to a specific area for a while now, it’s a huge mistake to forego exploring other options; it could lead to buyer’s remorse down the line! Your friends and family may have raved about a certain town or city, but if that’s the only area you’ve considered, you may be missing out on a city that’s more fitted to you and your lifestyle (not to mention your budget).
And make sure you really explore your possible areas! Take a day, jump in your car, and walk the main strip, enjoy the scenery, check out the waterfront, view some homes, and try some of the restaurants and entertainment the region has to offer. Ask yourself the important questions:
- Does this area check off the needs and wants on my vision board?
- Am I happy with the proximity to my family and friends?
- Is the area affordable based on my budget?
- Can I see myself living here?
This is another great reason to hire a real estate agent. They know their areas inside and out and have connections with other real estate agents from other regions that will help find the perfect place for you. Join us at or next Boomers on the Move workshop to virtually explore some great areas for those 55+!
6. Letting finances get in the way of downsizing
Retirement can be scary, especially when you’re feeling unsure about your financial situation. What can sometimes be equally scary is getting a lump sum of money from selling your home and having no idea what to do with it. Again, this is when it’s great to get a financial advisor on board.
I did an interview with Heather Holjevac, a financial literacy advocate who has joined us at our Boomers on the Move workshop. She has lots of experience with retirees looking to downsize and understands the fear that can often hold them back from their dreams. However, Heather also understands the wonderful life that can come from finally making the leap.
“[I had] a couple that after a few years in retirement had no extra cashflow to go on trips or make home renovations. They decided to downsize and move outside the GTA, where housing prices are a lot lower. The equity from the sale of their Mississauga home allowed them to buy a property and resulted in them having a substantial amount left over to invest…
I presented solutions that gave them comfort knowing that regardless of market conditions their investments would continue to grow and provide the income that they needed. The resulting financial plan fulfilled their retirement goals of travel and enjoying their new property in a smaller community.”
7. Sitting on your downsizing plans
I know making that decision to leave what you know is a difficult one. There can be a lot of pressure from kids, family, and friends, and your current home likely holds memories that are hard to leave behind. But ultimately, you need to do what’s best for you. By not taking the time to evaluate your current situation and asking yourself the tough questions, you may just be delaying your happiness by staying in place.
Ultimately, as Hailey Patry, an inspiring life coach who has joined us in our Boomers on the Move workshop says, remember your “why” for downsizing. Take the time to grieve what you’ll miss, but then get excited about the new opportunities that are on the horizon!
There are also more practical reasons for preparing to downsize sooner rather than later. Firstly, as I’m sure you know, it takes a great deal of time and planning to downsize. Secondly, smaller homes that are likely to attract the 55+ community aren’t as available as they used to be. As a Toronto Star article, “ ‘Over-housed’ boomers looking to downsize have no place to go: Wells” mentions, “For these people to move and right-size, they have no place to go, so they’re staying in place.” By waiting to start your downsizing journey, you won’t be able to jump at options that pop up (especially if they’re on the waterfront), and you don’t know when the next home will become available.
So, my advice to boomers is this: don’t underestimate the time and effort it will take you to get the job done, and don’t sit on your plans to downsize. You’re only delaying your happiness!
I hope downsizing no longer seems like such a daunting task after learning these dos and don’ts. More than anything I want to save you the stress these seven mistakes have caused my clients in the past, so hopefully now you can avoid them in your own downsizing journeys.
So, what’s stopping you from making the leap? Take the plunge today!