You’re at your wit’s end. You’re working overtime to support kids in a home you don’t have time to maintain and can’t afford. You’ve thought about downsizing but that seems an impossible task – just one more thing you don’t have time for. Luckily, it’s easier to downsize your home with kids than you may think.
All you need is a clear plan of action that gets you into a new home you can afford. Our guide below should help you figure out whether downsizing is the right move and just how you can prepare your family for the process.
For additional insight, we spoke to Keith Yonick who regularly deals with clients that are downsizing. Yonick ranks in the top 1% of Dallas real estate agents for townhomes, condos, and single-family homes, so he definitely knows his way around a variety of price points.
Is Now a Good Time to Downsize with Kids?
Before you start down the road to downsizing your home and lifestyle you need to figure out whether or not downsizing is the right choice for you right now.
There are myriad reasons to downsize your home as a parent:
- Your mortgage has become a major financial burden.
- You’re spending more time at work to afford your home than with your kids.
- Your home has unused rooms you can’t afford furniture for.
- Your yard is too big and requires too much maintenance.
Just one of these may be reason enough for you to consider a move to a cheaper home. But here are a few more questions to ask first:
How much equity is in the home?
If you are only a year or so away from owning your home, it may make sense to find other ways to save while you finish paying off the mortgage.
How old are your kids?
Say you’re holding off on downsizing until you’re an empty nester. Why wait? If one kid is heading off to college soon, bunk your kids together and downsize now – they’ll need to get used to dorm life sooner or later.
Is your home going to net you a lot of cash?
If you’ve added a significant amount of equity into the home, you could be subject to a capital gains tax that could make a sale less than ideal. Any gain over $250,000 ($500,000 for couples) could be taxed anywhere from 15-28%.
Can you make time to get your house ready to sell and find a new one?
The answer to this one may feel like “no” but it’s almost certainly “yes.” If you’re strapped for time, finding a top real estate agent is crucial. A qualified agent will understand your time restraints and work around them to get you into a house you can afford. This may include help with staging, hiring cleaners, and scheduling showings around your availability.
In most cases, if downsizing your home feels necessary it probably is. There are very few situations in which staying in a mortgage that you can’t afford is the right decision.
Yonick notes that there are important considerations to be made when downsizing with a family. Buying on the contingency of selling your home can present problems, which means you’ll want to hire an agent experienced in home sale contingencies.
Moving while kids are in school can be another headache. “If the parents have their children in school,” Yonick says, “I always say it’s a little more peaceful for kids to sell during summer, spring, or winter break.”
In general, you want to downsize when your kids’ lives are least disrupted.
How to Prepare Kids for Home Downsizing
Downsizing is different than just moving and for kids it can be a lot to process. Not only will they potentially be moving away from their friends, there’s a good chance you’ll need to downsize their belongings as well.
Before you list your home you can get kids prepared for the changes. Turn downsizing your house into a game – help them list and sell toys online and let them put the money toward another, better toy. Scout out potential future areas you’re interested in, attend community events, and get to know your future neighbors.
Still, no matter what you do to prepare, you should expect difficulties and fights. Be patient and realize that (especially if this is their first time), moving can be a big shock for kids. Keep your kids involved in the move – take them to scout out new neighborhoods and keep them abreast of important dates.
How to Choose Your Next Home
You’ve decided to downsize, you’ve started the process of listing your home, and now it’s time to figure out where you’re headed next. Put simply, you want a home that suits your family while addressing the reasons why you’re downsizing, be it a pricey mortgage or an oversized home.
For Yonick, it’s essential that you know where you’re headed beforehand.
“I want to make sure they know where they’re going,” he says. “If they say they’re going to rent for a year I tell them about the family I’ve got that’s been renting for two years.” He explains, “In Dallas, the market’s never going to soften into affordable prices.”
This means that in choosing your new home, you need to consider the market where your home is and where you’d like to buy. Otherwise you could find yourself stuck in temporary housing or renting while you wait for an affordable property to hit the market.
One of quickest and easiest ways to assess the local real estate market is by sitting down with a top local real estate agent. Don’t be afraid to speak with multiple agents, especially if they have experience in the areas you’re selling or looking to buy.
4 Things to Prioritize in a New Neighborhood
Yonick tells his clients to prioritize these four things when downsizing with kids into a new neighborhood.
- The school district – Niche.com ranks school districts by city or state and is a great place to start your search.
- The neighborhood – “You can change a house, but you can’t change a neighborhood,” Yonick says.
- The neighbors on either side of the house and the three across the street – “Meet with them and if you don’t feel right about it, don’t buy the house.”
- Crime statistics – Neighborhood Scout and AreaVibes are two great resources.
Your future home needs to be affordable first and foremost, but this doesn’t necessitate a downgrade. Ask your agent about new construction or up and coming areas where you may have fewer shops and amenities, but a great home that fits your family.
Know What to Expect When Downsizing Your Home With Kids
Sure, downsizing will be difficult – getting rid of your home and a chunk of your belongings is never easy. But downsizing also comes with a heap of benefits. Not only can you count on a lower mortgage payment, but if you end up in a smaller house, you’ll have lower utility bills and less yard maintenance. This does come with tradeoffs and you may have to give up certain features like a garage or basement.
Downsizing doesn’t have to be scary or hard. With a knowledgeable local real estate agent at your side and a clear plan of action, even the most slammed parents will be able to find a house they love.