Downsizing… Is it right for you?

As we get older, many of us consider downsizing, a common-sense adjustment to life’s changes. Children move away and a house becomes too big. Or it becomes difficult to maintain the house because of physical and/or financial limitations. Here are some questions to ask yourself:

• Is it a good idea for you to downsize? List the pros and cons.

• What is the best way to make it as easy as possible?

• How can I make this benefit me the most financially?

Read on to answer all these questions and more!


Reasons not to downsize

• The amount of time and effort involved. A lifetime of possessions to sort through.

• The need to find a new living situation.

• Emotional attachment to your house and the items in your home.

• If the move is distant, loosening ties with friends and relatives.

• Possible need to establish new health care resources and other resources.

• The details involved in selling and possibly buying property.

Reasons to Downsize

• The present house is simply too expensive to maintain. Consider your mortgage payments, heating and cooling bills, general upkeep, yard maintenance, roof repairs, need to update systems, taxes, cost of assistance, etc.

• Many rooms are unused and the house feels lonely.

• Downsizing could greatly increase your retirement nest egg and income.

• Physical limitations make cleaning, stair-climbing, and maintaining the house difficult.

• The possibility to rejoin friends and relatives who have already relocated.

• Your health is still good enough to manage the downsizing process, but you anticipate that this may not be the case in the future.

• You are still young enough to adapt to a new living situation and would like to enjoy the benefits of a lower-stress lifestyle.

• You want to spare your children/heirs from having to sort through a house full of your accumulated possessions.

• In some cases, you may want to move to a senior living community or an assisted care facility to make your life easier.

All these things need to be considered in your decision to downsize. Fortunately there are many resources available to you to make downsizing relatively pain-free. There are people and agencies to work with you throughout the entire process.


What’s involved in downsizing

Here are some steps to take:

Talk about the possibility with people you know and trust: your children and friends, professionals such as your doctor and clergyman. Talk to your financial planner. Get a number of opinions.

Make a list of the advantages and the disadvantages to you.

Investigate various options. There are many senior living communities which offer low-stress lifestyles with social and leisure activities. Their amenities may include hiking trails, tennis courts, golf courses, swimming pools, fitness centers, community centers, restaurants, clubhouses and group activities.

If you plan to move to another area or state, visit there long enough to find out what it is really like. Do some research on the new area for yourself, don’t just rely on what’s in the brochures. Talk to people who live there. Make sure that you visit when the weather is extreme to find out what it is really like.

Make a list of all the things you will have to do in order to make the change. Try to minimize the number of surprises that you will encounter.


Pare down the items in your home

Go through the items in your home and divide them into three categories:

Must Have (Financial records, heirlooms, irreplaceable items, jewelry etc.)

Would like to keep but not really essential and can be replaced if necessary (Furniture, tools, spare towels, etc.).

Definitely discard (receipts over seven years old and all the things you thought you could use some day which never comes.)  Shred anything with personal information on it.

Photos and memorabilia are difficult for many people to discard because they recall fond memories and important times. Save your favorite photos in one or two albums and make digital copies of the rest. (There are services that do this.) Once digital copies are made you can pass on your collected photos and memorabilia to friends and family members.

Start thinning out your belongings at least three months before the move. Take some time each day, or one morning each week, to go through that jammed coat closet or overflowing filing cabinet. Paper is often the most difficult, so tackle it one box at a time. The same goes for photos, which require a lot of attention.

Giving away some possessions that are difficult to part with can bring you happiness. It can bring you joy to see loved ones enjoying your belongings. Invite family over and show them what you’re planning to let go of and ask them what they would like. You may be surprised at what they want. If that’s not practical, post photos of them on a family FaceBook page, and send the items to the relatives who want them.

Get help if possible! It is surprisingly hard work to load things into boxes and/or prepare them for shipping. There are people who will do this for a small hourly rate. You may find some younger family members who are happy to help you.


Furniture

Get a feel for the size of your new rooms by comparing them to rooms of similar dimensions in your present home. For instance, your new living room may well be smaller than your current bedroom. You may think you can squeeze in two sofas, but a reality check could help you realize that only one will fit comfortably.

It may be both easier and less expensive to buy new furniture for your relocation. Consider this option.

Using floor plans to prearrange your furniture before the move can be helpful. There are also some amazing computer programs that give you realistic predictions of what everything will look like in your new home.  One example is https://www.roomsketcher.com, which is easy to use. Five free designs and then only $50 a year.  Here’s an example: 

How to sensibly eliminate things you don’t need

Try not to throw anything in the garbage. Recycle, reuse, sell and donate instead. As tempting and easy as it is to throw away wire hangers, musty clothes and shabby furnishings, be environmentally responsible and try to find a home for everything. A can of Comet with a few shakes of powder left could make someone else's sink sparkle if you don't want it; consider giving supplies to a shelter, a neighbor or a cleaning service. Or donate to a charity. The unhoused greatly appreciate donations of clothing, especially socks.

You may be pleasantly surprised at how much money you can get for some of your items. There are services in every neighborhood that will organize a yard sale for a share of the profit. There are also people who will help you sell things on Ebay and Craigslist. If you are so inclined, you can sell them yourself on the OfferUp App and other similar apps.

Another alternative is an auction house for high-end items. Sothebys is one. You could also look for reputable antique and secondhand dealers. They can buy your wares, sell them on consignment, or put you in touch with booksellers and other specialty dealers. Some dealers will come to your home, take what you don't want and even drop off the items for charity. If you can't sell an item, donate it to a charity for a tax write-off.


Emotional Considerations

The most difficult aspect of downsizing is the emotional impact. All of us have some sort of attachment to our belongings and to our homes. Attachments can involve memories, the belongings’ usefulness to us, or even just a love of their attractiveness. This can be a long and involved subject, too long for this pamphlet. If attachment stands in your way, you might want the workbook version of a book called “Downsizing The Family Home” by Marni Jameson. Published by AARP, it’s available on Amazon. 110 pages of a clear, step-by-step downsizing process dedicated to how to select items to keep, store temporarily, donate or give away. 

Remember to take your time and to get help when you go through your belongings. Be prepared for some surprises, especially how hard it can be to let go of memorabilia. You have probably been in your home for a long time, and it is a huge part of your life.


Selling Your Property

Once you decide to move, you must then decide what to do with your present house. It’s likely that you will want to either sell it or rent it out. That depends on your financial needs. Remember that you may have to pay a capital gains tax if you sell, but there may also be negative tax consequences if you convert your primary residence to rental property.

If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income if your file as a single person, or up to $500,000 of that gain if you file a joint return with your spouse. IRS publication 523, Selling Your Home, provides rules and worksheets. Topic No. 409 covers general capital gain and loss information.

You have several choices in selling your home. You can sell it yourself, which takes great courage and a tremendous amount of effort. You can do a quick sale to a company that makes a business of flipping homes. You will make much less than you otherwise could by doing this, but you will get a fast transaction. Or, if you wish the best possible arrangement in terms of convenience and the highest return possible, hire a good realtor, particularly one who is trained to be a Senior Real Estate Specialist.

While using a realtor involves a small commission, you most likely will net more money in the long run while saving yourself a ton of work. Your realtor will guide you through the process, do most of the work for you, and negotiate the best possible price and arrangements. Realtors with the Senior Real Estate Designation are specially trained to help people with downsizing. They understand the difficulties seniors face in downsizing and have networks of professionals to help with each step of the process. To find a specially trained realtor in your area, go to the SRES website at SRES.Realtor. Scroll down the homepage and click on “Find a Designee”.


Renting Out Your House

Being a landlord is not for the faint of heart, especially if you have never owned a rental property. At its best, renting provides a steady source of income that grows with the cost of living. At its worst, it can be a nightmare. You will want to familiarize yourself with local laws concerning rent control, landlord responsibility, the eviction process and required insurance. Do some research. Talk to other people who have experience with rental property. Another important consideration is that you may lose your IRS tax exemption. Talk to your accountant before converting your primary residence into income property.

Extra important: find a good property manager. They will expect around 10% of the gross rent for their fee. They will relieve you of most of the potential headaches. Do you really want a midnight call to tell you about an overflowing toilet?


In Conclusion

If you take the steps outlined here and decide that downsizing is right for you, remember that the downsizing process usually gets easier once you get started, especially if you keep your final goal in mind. You will be glad that you have taken this most important step. A sense of freedom can be gained by releasing yourself from stress and unnecessary burdens. It’s easier to enjoy retirement when you can focus on living!

What You Can Do to Speed Up the Sale of Your Home

Putting your home on the market is not for the faint-hearted! As many people discover along the way, the road to selling a home can be rather bumpy -- especially if you attempt to sell it on your own.

Fortunately, there are several things you can do, right away, to make the journey shorter, smoother, and more rewarding. Here are three strategies that will greatly increase your chances of success.

Find a seasoned real estate agent. An experienced real estate agent will not only help you navigate state and federal regulations, negotiate with buyers, and get a handle on paperwork, but they'll also schedule showings of your home and provide continuous marketing help.

Enhance your curb appeal: When it comes to finding prospective buyers and setting up appointments, your real estate agent will do the lion's share of the work. However, it's mostly up to you to make sure your house looks its best and that the appearance of your property catches the eye of house hunters.

Once your home is listed online and a "for sale" sign is planted in your front yard, potential buyers are going to immediately take notice of how your house looks from the outside. Sometimes people browse listed houses from their cars, so it can really pay to make a great first impression from the street.

Some of the things that matter the most are a meticulous-looking yard, a clutter-free property, and a house that looks like it's well maintained. Adding a fresh coat of paint, displaying some colorful potted flowers, and taking care of unsightly weeds and overgrown bushes are a few things you can do to make your property look a lot more inviting.

Stage your home's interior: Once you've cleared the first big hurdle (curb appeal), your next priority -- or perhaps a simultaneous priority -- is to make the interior of your home look inviting and appealing. As is the case with boosting curb appeal, your real estate agent can provide you with cost-effective advice on how to get the most mileage from your efforts.

Some of the tried-and-proven methods of staging a home include reducing clutter, arranging living room furniture in "conversational groups" to depict a cozy, intimate environment, and letting plenty of natural light stream in to make your home appear as cheerful and bright as possible.

Fresh coats of neutral-colored paint should be applied to walls and ceilings on an as-needed basis, and all floors, tables, and counter tops should be kept immaculate. Home staging consultants often recommend removing (or toning down) certain decorating themes -- such as sports, religion, or even too many family photographs -- which may alienate some potential buyers.

The overall objective is to make it easy for house hunters to imagine themselves owning and living in your home. If there's anything about the appearance, decor, or smell of your home that makes people feel in any way uncomfortable, that could make it more difficult to find a committed buyer -- which, of course, is your ultimate goal!

Home Staging on a Budget

When you show your home’s best features by staging it effectively, you help increase your final selling price without breaking the bank; in fact, on average, sellers receive $2 in increased sale price for every $1 they put into staging a home. As our infographic below shows, the following five golden rules of home staging will help you show off its best assets:

The five golden rules are:

De-personalize: While your family photos are beautiful and your kids’ drawings on the fridge are adorable, buyers want to be able to picture themselves in the house- and that means putting away your photos, clearing your closets from unnecessary clutter, and using matching hangers to give your closet more visual impact.

Maximize: Declutter and maximize the area in your home. Stuffed closets make your closet space look insufficient, so consider storing excess belongings offsite. You can also quickly improve your bedroom’s aesthetic by using gender neutral colors when accessorizing so that the color scheme appeals to more people. A headboard, a cohesive color scheme, and a few decorative items also improve the look of a bedroom, while removing extra clutter (office furniture, power strips, televisions, etc) will make the room feel more relaxing.

Sanitize: No one wants to move into a dirty home, so clean your home to make it much more appealing to prospective buyers. Clear your countertops to make the space look larger, and enhance the open feel with white bath and hand towels on display. Clean dirty shower doors with a solution of one part muriatic acid and ten parts water. Bathrooms and kitchens are the two essential areas of the home, and they can make or break a deal.

Modernize: A dated-looking home means a lower offer, so modernize your home wherever possible. Small changes, like replacing gold fixtures or brass and wooden cabinet hardware with nickel, chrome, brushed silver, or stainless steel, will go a long way towards updating your home. You can quickly update the look of flat appliances such as dishwashers and refrigerators by using stainless steel stick-on coverings or specialty appliance paints. While you’re in the kitchen, go ahead and declutter your cabinets, drawers, and oven- buyers will look inside every nook and cranny. Also, you can make your kitchen space look larger by removing rugs.

Neutralize: Keeping a neutral color scheme can help your buyers envision themselves in your home, especially in a statement-making area like the dining room. Set the table simply to create visual interest, and add a vase with fresh flowers for a beautiful focal point. Add lighting and emphasize any natural light your home gets using a mirror and subtle lamps. Don’t forget to adjust your window treatments to maximize your staging. Keep your curtains neutral or choose ones with subtle designs; sheer curtains also let in more light so that your home looks more appealing. Set the rods as high as possible and use thin rods to maximize the space.

A few simple tweaks can increase your home’s selling price by hundreds, or even thousands, of dollars. Use these guidelines to stage your home effectively so that you get the best possible price on your house.

Post courtesy of Moshells.com

5 DIY Improvements to Make Your Home Classier

Updating your home to be more chic - without looking cheap - is completely doable on a budget.

If you're looking to add more class to your home, taking on a DIY project can give your house that extra sense of style while saving you money. No need to cringe at those three little words: "do it yourself." There really are fast, easy and affordable projects you can do on your own. Here are five relatively easy ways to enhance your home.

1. Replace Your Light Fixtures
Switching out an old or basic light fixture for a more elegant one is an easy way to shift the ambiance of a room. By adding a sophisticated light fixture, you can control the intensity of the light and character of your room. And you don't need to pay a pretty penny for expensive new fixtures - you can buy used fixtures online.

2. Add Floating Shelves
Installing floating shelves in your home combines the functionality of extra storage space with a bit of style and personal flair. Floating shelves can be mounted on walls in many different patterns, and they come in various materials to give your rooms a unique touch. For a small room choose shallow shelves to display framed photos; for a larger room you can afford to use deeper shelves to hold vases, books and unique trinkets.

3. Paint an Accent Wall
Painting an accent wall can add a pop of color and showcase your personality. Usually a low-risk project, a homeowner of any skill level can tackle this project in a day. You just need some painter's tape, a brush and the color that suits you! Just make sure the color you choose is complementary with the other colors in the room. Stay consistent between warm and cool tones.

4. Install Decorative Molding
Adding decorative molding around your home can add an extra touch of elegance. Install molding to the ceiling by capping walls, columns and cabinets, or add chair molding lower to the ground. With detailed molding you can add character to your rooms while also making them feel taller and more finished.

5. Build a Stone Fire Pit

Take your sophisticated style outside by building a stone fire pit in your backyard. Completed in only a few hours, take uniquely shaped rocks or large stones and put them together to create a functional and stylish fire pit. Before starting the project, be sure to check your local fire codes or homeowners association to ensure you are safe and allowed to start building.

Adding a touch of class to your home doesn't have to break the bank! Just be sure to start with one project at a time, allowing yourself to complete one before starting the next. Otherwise, you'll fall victim to chronic project incompleteness syndrome - not a good look!

Now that you know about these five inexpensive DIY projects, which will you try?

Top 4 Deal Killers for Homebuyers

Falling in love is exhilarating. It can also be a bit scary, especially when a home has captured your heart. What if something goes wrong and you end up not spending the rest of your life with this stack of brick and mortar you're lusting after?

No matter how careful you are, some deal killers are unavoidable. Others, however, are preventable, so pay heed if you hope to keep your deal alive.

1. Don't Mess with Your Mortgage Preapproval
A common reason for a real estate deal to fall apart is that many homebuyers don't fully understand the mortgage process. Sure, you may get a loan preapproval, but don't think for one minute that this guarantees you will get the loan. It doesn't.

Here's what happens after you receive your preapproval letter and decide to move forward with the purchase. The lender will start your file, give you a list of paperwork required, order an appraisal and credit reports, verify your employment and income, and more.

The file is then sent to the processor who will review all of your information as well as the appraisal. He or she will then put together a package of all pertinent information to be sent to the underwriter.

The underwriter is the person who ultimately determines whether or not you are an acceptable credit risk. He or she will assess your ability to repay the loan, your credit, and the collateral used to secure the mortgage - in this case the collateral is the home. Then, just before funding the loan, the underwriter will perform what is known as a "soft pull" of your credit information to see if anything has changed.

This is the point where many borrowers run afoul. If you hope to keep your purchase alive, don't do anything - from application to closing - that might change your financial picture and sabotage your final approval. This means no shopping on credit for appliances, furniture or anything else. Don't switch jobs, fall behind on your bills, co-sign a loan for anyone, or in any way reduce the income stated on your application.

2. Read Homeowners Association Documents Carefully
When you purchase a home in a managed community governed by a homeowners association (HOA), you'll be given a mountain of paperwork to read and approve. Because there may be deal killers included in the fine print, it's important to get to this task immediately upon receipt of the documents.

Look for any information about liens against the property; current litigation against the HOA, the builder, or the developer; and any red flags in the HOA budget. Since these documents aren't easy to read and understand, it is worth the money you'll spend to have your attorney look them over and advise you of any potential deal killers lurking within.

While the aforementioned HOA problems could potentially derail the deal, it's better to have it happen upfront rather than when you're further along in the process.

3. Home Inspection Problems
All homes - even newly constructed ones - may have problems. Going into the process not fully understanding this can set you up for a failed real estate deal. Sure, you ideally want to find a home that was owned by Mr. or Mrs. Clean who conscientiously took care of it during their entire ownership, but those are few and far between, and seeking them out is unrealistic.

Set your sites on finding a home that has small, easy-to-fix problems, and don't freak out if some are worse than others. In other words, when considering making an offer, laugh at the loose doorknob but negotiate when it comes to water damage or worse.

The nitpicky homebuyer, who plans on nickel and diming the homeowner into replacing missing switch plates and dripping faucets, is the picture of a deal-breaker-in-the-making. Sure, in a buyer's market you may get away with minor demands. In a seller's market, however, there is always a cleaner offer right behind yours.

4. Budgeting Blunders
The real estate industry does a bang-up job of reminding homebuyers that they'll need a down payment - typically from 3 percent to 20 percent of the total loan amount - when they purchase a home. What they often fail to inform real estate consumers about are the loan's closing costs - the money you will be required to pay before the house is yours. This is most likely because closing costs are a little harder to pin down. They vary wildly and depend on the type of loan, the amount of the down payment, and a host of other factors.

Unfortunately, this lack of information frequently causes real estate deals to disintegrate. To avoid this particular problem, pay attention to all communications from your lender.

First, you will receive a form called a Loan Estimate. Look this over carefully to ensure that everything your lender agreed to is included. Pay close attention to the "Calculating Cash to Close" section, which concludes with an estimated cost to close the loan. Remember, this is an estimate and the amount may go higher or lower in the end. Speak with the lender if you find any problems here, especially if it will be impossible for you to come up with this money.

Just before closing you will receive the "Closing Disclosure," which is quite similar to the estimate, but these figures are final. Again, review the "Cash to Close" figure.

By and large, real estate deals conclude successfully. Typically, it all comes down to the experience of your agent. Choose wisely and you'll avoid the common pitfalls that can derail transactions. For a smooth, low-stress real estate transaction, slow down, keep your expectations realistic and heed the advice of your real estate agent or attorney.

3 Tips for a Higher Home Appraisal

It may seem that homebuyers and sellers don't agree on much, but they share one important concern: that the transaction is successful. This comradery is never more evident than during the appraisal process. It's only natural, since the results of the appraisal can send the deal spiraling out of control.

Appraisers take into account many factors when determining the worth of a home. While some of these, such as location, can't be helped, there are things a homeowner can do to ensure that the home is appraised for maximum value.

1. Information is King
Appraisers don't spend a lot of time in the home. In fact, Brian Coester, chief executive of appraisal firm CoesterVMS, tells CNBC that the interior inspection typically takes 30 minutes or less.

"After inspecting thousands of homes, it does become quite easy to quickly assess the amenities in a home," reiterates Ryan Lundquist on Sacramento Appraisal Blog. That isn't much time to make a good first impression, so line up those ducks in advance of the appraiser's visit. The first one should be a packet of information that you can hand the appraiser as he or she speeds out the door after the inspection. This packet should contain not only the basics about your home but anything that will help back up the buyer's offer.

Include a fact sheet about the home with the address, the year the home was built, the square footage, number of bedrooms and bathrooms, and the size of the lot. Also include a listing of recent sales in the area, especially if you know of any for-sale-by-owner homes that have sold or homes that sold for less than they should have for any reason. For example, a home may have been sold to a relative, or the owners may have sold quickly to take a job out of town. Yes, the appraiser has access to recent home sales, but there's always a chance he or she may miss something.

Create a list of any improvements you've made to the home. List them by date and include contact information for the contractor who did the work.

2. If It's Broken, Fix It
The appraiser will assign the home with what is known in the business as an "effective age."

It's largely based on the condition of the home and how well it has been maintained. This age may be older or younger than its actual age. "Say you have a cracked window, thread-bare carpet, some tiles falling off the shower surround, vinyl torn in the laundry room, and the dog ate the corner of the fireplace hearth, these items could still add up to an overall average condition rating as the home is still habitable, however your effective age will be higher resulting in comparables being utilized which will have the same effective age and resulting lower value," Doreen Zimmerman, an appraiser in Paradise, California, tells the Wall Street Journal.

Fix anything that will age the home in the eyes of the appraiser.

3. Give the Home a Quick Cleaning
Most appraisers will tell you that it doesn't matter if your home is clean or dirty - it has no bearing on its value. We, on the other hand, know how illusions can sell, and if a clean house gives the illusion that the home has been well-maintained, what harm can it do to clean it before the appraiser's arrival? I don't know about you, but before I trade in a car at the dealership, I give it a good cleaning.

"Things like overgrown landscaping, soiled carpeting, marks on walls - those do affect value and are part of the property's overall condition rating," Dean Zibas, of Zibas Appraisal in San Clemente, California, tells the Wall Street Journal.

While some things impact a home's value more than others, the bottom line is that the process can vary by appraiser. Anything you can do in the three areas listed above has the potential to streamline the appraisal process and increase the value of your home. Plus, going through these steps prior to listing your home will only help increase the number of potential buyers. And ultimately, selling your home is what it's all about.