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Friday, April 12th, 2024

Is it time to downsize your home, sweet home?

imageThe Globe and Mail Downsize Your Home Worksheet is designed to help people think through some of the financial considerations involved in selling the family home and moving to something smaller. Sure, there are lifestyle factors in deciding when to sell. But there’s also the state of the real estate market to consider. Should you lock in your gains, or wait and run the risk that the housing market could fall? To crunch the numbers, try the Downsize Your Home Worksheet.


Question: Should you wait to sell the family home, or should you take advantage of today’s high real estate prices and sell now?

Edit the values in the right column to reflect your scenario. The red values are calculated automatically.

I am hoping to have this much left over after I sell my house and move to something smaller 1) How much might my house grow in value if I stay? Estimated value of your house today. For illustration purposes, we’ve used a number close to the average national resale house price in summer 2014

Number of years until you sell Your expected annual house price gain (if you’re unsure, try using the long-term average inflation rate of 2.5%)

Bottom Line: Estimated value when you’re ready to sell 2) What if I stay and prices fall? Estimated value of your house today Your estimated percentage decline from current value Bottom Line: Projected value after decline Which scenario would you like to use to calculate the following questions? The current value of your house Estimate value when you’re ready to sell Projeced value after a decline 3) What will it cost me to move to a smaller house or condo? Value of your home or the bottom line home value from either parts one or two Percentage real estate commission for selling Real estate fees Legal fees + Reimbursements A default estimate of $2,500 could be used to cover a downsizer’s sale of the family home and purchase of a smaller dwelling.

Land transfer tax on purchase of your next home, if applicable Click here to calculate what you’ll owe, if anything

Mover Furnishings and upgrades for your new home Total 4) Net gain from selling The value of your home or the bottom line home value from either parts one or two Actual or anticipated balance owing on your line of credit (or remaining mortagage balance) Net gain after subtracting total moving costs in Part Three and LOC or mortgage balance Cost of new home (leave blank if you plan to rent)

Funds remaining after you buy your next home Surplus or shortfall compared to your targeted net gain after downsizing 5) What if I invest the gains from selling my house? Funds remaining after you buy your next home (from Part Four) Your expected annual investment return after fees (%) Your pre-tax annual gains Future plans: Part Two of the Downsize Your Home Worksheet will help you compare the month-to-month living costs at your family home against a condo, smaller house or rental.

Follow Rob Carrick on Twitter: @rcarrick


PORTFOLIO STRATEGY Downsizing? A plan to invest the proceeds carefully THE LONG VIEW A rental property for retirement income: Is it worth it? ROB CARRICK Downsizing to condoland? Why it’s best to rent, not own

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