The dish on downsizing

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METRO DETROIT – The decision to downsize comes with a number of benefits, including clearing out, lower mortgage payments, less maintenance, and more money to save or invest.

Given the seething sellers’ market and the dizzying amount of decisions that come with dismantling, experts and a local resident as you go through the process advise being patient and allowing plenty of time to relax and pack.

Debbie Robbins, a real estate agent at ReMax who has worked in the tri-county area for 20 years, said many of her clients are empty nests in colonial homes looking to move to a ranch.

“It doesn’t have to be a smaller ranch,” said Robbins. “(People) want a home that is big enough for their family to come and stay with, and they want a little more space for themselves.”

Instead of using the term “downsizing”, Robbins prefers to use “right-sizing”.

Wrap up

“People may want to get rid of a lot of things – children’s soccer trophies and Little League prizes,” she said. “I usually recommend going to the new place just to see what it looks like, to see the size of the place and to record things with multiple purposes.”

For example, a chest of drawers can serve as a TV stand and as a shelf for items such as photo albums or bills. Most people no longer need table service for 12 – Robbins recommends keeping service for four and donating the rest.

“We only wear 20% of the clothes we have in our closet,” she added. “You want to take things with you that you can wear at different times of the year. Layering is always good. And you don’t need the Costco storage room. “

With the advent of digitization, homeowners can shrink space-consuming photo albums to a small flash drive that can be attached to a digital picture frame or stored on a hard drive, Robbins said.

Giving away sentimental items to family members can help pave the way to a smaller space, as well as donating furniture to charities or books to libraries.

“One of the tips I give my clients is to work 20 minutes at a time. Everyone can take 20 minutes. Set a timer and if you want to keep going, set the timer for another 20 minutes, ”said Robbins. “Another idea is to put a plastic bag or a couple of boxes either next to your closet or in front of your front door. If I keep something that I haven’t used in five years, I’ll put it in the box right away. “

Warren Agee, owner of Troy-based Warren Agee Designs, recommends starting the packing process at least three months in advance.

“The earlier you start, the less stressful it is for you,” Agee said. “Start in small sections. Do not try to cover a whole room or a whole room in one day. “

He advised that possessions should be sorted into four categories: keep, donate, sell and throw away or recycle. When it comes to sentimental items, he recommended taking photos of things that don’t fit in the new room to remember.

When it comes to a large collection of t-shirts, he adds, it’s a great way to shrink it, crop it, and turn it into a quilt – both sentimental and useful.

“Being able to break into the new room to measure it before you actually get to it will also help you determine how much stuff you are taking with you and how much space you have instead of taking it all to stuff it in and take some out of it, ”Agee said.

When packing, he also recommended using smaller boxes instead of large ones, which can be heavy and difficult to move quickly.

“Label, label, label, label, label, label,” he emphasized. “Try to be as specific as you can so that you know exactly what is in each box, not guess what. When you have a room that is not being used, it’s great to have boxes neatly and neatly stacked so you can move everything out of a room in due course. “

In deciding what to leave and what to do, Agee said removing all duplicates, as well as any items not regularly used.

“I find that a lot of people hang jeans for closets on hangers, which takes up a lot of space,” he said. “You save so much space when you take them off the hangers, fold them up and put them on a shelf. The same goes for T-shirts. “

He added that he likes to organize wardrobes by color, which makes clothes appear tidier and easier to find.

“When you downsize a pantry, put a can of soup or beans out, preferably one about to decay, and the rest on the floor in a trash can,” Agee said.

Financial considerations

Dewey Steffen, CEO of Great Lakes Wealth in Northville, recommended hiring a financial advisor when they started the wind-down process.

From a financial perspective, he recommended selling items on the Facebook marketplace, a flea market, or eBay, and looking into tax credits for donations to charities like the Salvation Army or Habitat for Humanity.

Steffen also recommended taking photos and videos to document the new home from inside and outside for insurance reasons in the event of a fire or theft.

“It is also a perfect time to review retirement plans,” he said. “As you downsize, you have to make new assumptions about your cash flow and monthly costs. Hopefully your monthly costs will be lower so that you have more money to invest or just to have a better life. “

Consulting a financial planner can help homeowners determine how much of the sale of the old home to use and how much to invest.

“One of the things before even thinking about reducing it is to make sure you know how to pay for the space. Pensioners cannot take out mortgages because they need an income, ”said Steffen. “We can calculate how much mortgage you can afford.”

He recommended estimating the value of the new home, including fees and interest, and paying a minimum of 20% down payment to avoid private mortgage insurance.

“The house is usually the biggest cost factor for everyone,” said Steffen. “According to the US Census Bureau, home equity makes up about 70% of a person’s net worth.”

According to a 2018 report by the US Bureau of Labor Statistics, housing costs are, on average, the largest item in the family budget – about 30 to 35% of Americans’ spending.

“Housing is the greatest expense and potential wealth,” he said. “People have to understand both sides.”

First hand experience

Nancy Padilla, a Bloomfield Township resident, and her husband Bob are among those downsizing to a smaller house. They started looking for a new place in January and found it in May.

The couple bought their 4,000-square-foot colonial building on Stoneleigh Road in 1990 and raised three children. They are now empty nests and will move approximately five miles to a 2,100 square foot ranch on a corner lot in Bloomfield Township in early August.

Padilla said they started thinking about downsizing about three years ago when they started building a house up north in Mackinaw City.

“We knew we had two big houses and we would look for a smaller one in the backcountry,” she said. “We raised our family there and had several empty bedrooms and bathrooms. It’s a lot of maintenance for both of us.

“It’s a house to be filled with kids and a family,” she continued. “For two it feels very empty and there is more space than we need. It was wonderful when it was filled with our children and their friends, but now it’s empty. “

With the new build now completed, Padilla said the question of what to do with her many possessions accumulated over 31 years has been partially resolved by moving them north to furnish the new home.

However, they still had to find ways to get some of it off.

“We donated quite a bit to local charities and some things had to be taken over the curb,” she said. “We also had the three children come and claim things.”

Padilla said the couple knew they wanted to stay in the same area because their children all live within 45 minutes, and they wanted to keep seeing their doctors and friends and visiting their favorite stores.

“We were definitely looking for a ranch, and we were looking for a slightly smaller and less well-kept farm,” she said. “We just wanted a few cosmetic changes to make it our own; We didn’t want a place that needed a major renovation. “

She advised those looking to downsize to be patient and find something they want because there is a good chance it will serve as their home for the rest of their days.

“We have a lot of nice neighbors. A neighbor we have known for a long time moved out of our neighborhood five years ago and has downsized. … Now we live across the street, ”said Padilla. “This is a new phase and we look forward to it.”