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Downsizing your home - Part II: Buying

Date posted:  5/5/16 09:00:00 AM

As life goes on, your needs change, and this can greatly impact what you need in your housing situation. If you find you no longer need the same amount of space for your lifestyle, consider living a little simpler and downsizing.

According to Becoming Minimalist, there are a plethora of benefits associated with trading in a larger home with unnecessary space for a more quaint property. From fewer maintenance needs to more affordable homeowner expenses, you can enjoy a simpler and less expensive lifestyle when downsizing. 

The first part of this series explored how to best market your current home and sell it quickly. This installment will provide tips for finding a new and smaller place to call home. 

Create a checklist
Make a small list of features you need in your new home. Organize them in order of most to least important. When viewing different properties, bring along this list to help you evaluate and rank the homes. 

Consider factors such as: 

  • Commute time to work 
  • Proximity to restaurants and entertainment 
  • Number of bedrooms and bathrooms 

Walk around the neighborhood 
When you invest in a new home, you are purchasing more than just the house. The neighborhood is also a major factor you should consider. Whenever you attend an open house or showing, ask the neighbors, sellers or representing agent about the neighborhood and see if anyone has a recommendation for a good restaurant nearby to try. 

Take your time and walk around the area to get a feel for the community. This is a great opportunity to really examine whether the listing is right for you and whether you should make an offer on the home. If you love the neighborhood, the house becomes more desirable because it fits both your wants and needs. 

Work with a professional 
Just like when you sell your home, hiring a real estate agent who specializes in finding the right home can help expedite this part of the process. Professionals not only have experience they can offer, but also a deep understanding of current market conditions and available inventory. By partnering with an agent you can better ensure you will secure the best price for a smaller home. 

Consider all types of homes 
Branch out a bit more when searching for a smaller home. Remember, you don't have the same priorities you did when you purchased your first home, so reconsider properties you may have initially eliminated when circumstances were different.

For example, when you had young children, a yard and proximity to a great school may have been top priorities. After your children move away, those might no longer be important. Consider replacing the yard with a pool or check out a small urban condo in the middle of your favorite city.  

Get your credit score in shape 
As a repeat homebuyer, you may feel confident you understand the importance of having a good credit score. However, you may still need to improve your current score, reported Bankrate. 

"It's a brave, new world with respect to credit requirements for mortgages," said John Ulzheimer, credit expert and contributor at CreditSesame, according to Bankrate.

It's important to remember, the higher your credit score, the more likely it will be that you are eligible for better terms when it comes to applying for a home mortgage. 

The first step to improving your score is evaluating your credit report. You are entitled to a free copy once a year, so take advantage of this opportunity and request your credit report from each of the credit bureaus. Ensure there are no inaccurate items impacting your current score. If there are, you may want to partner with a credit repair company and develop an appropriate plan of action to ensure you wind up with an appropriate and accurate score. 

A year before you apply for your home loan, Bankrate suggested that you should cease applying for any new credit. In addition, you should continue paying off current debt and eliminating as much of it as possible. 

Downsizing is a great way to simplify your life and save a little money. Make sure you know what you want out of a new home and remember to have a little fun while browsing available properties.