Downsizing In Real Estate!


6 minute read

April 1, 2013

It’s so hotttt right now!  Everybody’s doing it!

But if you’ve been in your house for 28 years, maybe this is a decision you should take your sweet time with…

All clients are not created equal.

Well, I shouldn’t say it’s the clients that aren’t equal, but rather the business, and the experience it provides.

Like any other industry, mine offers a multitude of different products, people, and scenarios, and some are more interesting and fun to work on than others.

Some of my clients become good friends, some I miss dearly after they buy a house and we stop working together (it’s called “real estate separation anxiety” and don’t worry guys – I feel it just as bad as you do!), and some provide me with a new and different challenge.

Over the past two years, I’ve helped ten older couples downsize from a larger home, that they’d been in for a very long time, and into something smaller and less costly.

At the moment, this seems to be some of the most interesting business I’m working on, and not take anything away from other clientele, but there’s an even better feeling of satisfaction and a job well done, when you take a 60-something couple, re-introduce them to real estate, guide them through the process, and put them in a low-maintenance home with a whack of cash in their bank account.

Oh – and the clients like it too!

There are a lot of 60-plus-year-old couples that are still living in 4-bedroom and 5-bedroom houses, even though their kids flew the coop a decade ago.  Everybody moves at their own pace, and some of these couples never leave the matrimonial or family home.  But a lot of them do, and I really enjoy helping them through the process.

Not to over-simplify the process, but I’ve identified six key points for downsizing couples to go over, debatably in order of importance:

1) House or Condo?

This is, by far, the biggest point of contention with downsizers.

ALL the downsizers are coming from houses, so the natural first question becomes: “Do you want to move into a smaller house?  Or is a condo an option?”

The feedback is 50/50, with half of the downsizers saying, “I’ve looked after this goddam house for 31 years now, and I want something that’s maintenance free!  If I ever see a rake or snow shovel again in my life, I want you to hit me over the head with it!”

The other half say, “You couldn’t pay me enough to live in a shoebox in the sky!  I don’t want neighbours, partners, or some 24-year-old nit-wit playing God on the condo board.”

Hey, to each their own, right?

While this is the first point on the list, it’s something that affects, and is affected by, every other point to some extent.

Your price, size, style, location, timing – everything is affected by the decision to purchase a house or a condo.

2) Cashing Out!

This goes hand-in-hand with the “house versus condo” decision, and you might argue that these two points could be switched.

“How much do you want to cash out” is what I’m asking my downsizers, directly, or indirectly, and that affects everything else on this list.

House prices in Toronto aren’t cheap, we all know that.  So it becomes difficult for many people to downsize from a large house to a smaller house, without giving up on location.  There’s no point in selling your $1,200,000 house and buying a $975,000 house, as you’re not cashing out enough equity to make the move (and all the transfer costs) worthwhile.

There’s no magic number or formula, but I think most downsizers are looking to cash out at least 30% or more.

I took a couple last fall from a $1,000,000 house to a $500,000 house.

I had another set of clients who went from an $800,000 house to a $420,000 condo.

I’m currently working with a couple who have purchased a $750,000 house and are going to sell their $1,300,000 house next month.

There has to be a certain amount of money in your pocket to make the decision worthwhile, otherwise, why bother?

I guess you could argue that “downsizing” refers to the actual size of the house, and not the value, but I believe that people downsize so they can take that home-equity, turn it into cash, and use that money to travel, retire, and live lavishly as they get older.

Would somebody sell their $2,000,000 house and buy a $2,000,000 condo that’s half the size?  I suppose, but I think this is a rare case.

3) Logistics

Many downsizers haven’t transacted in real estate since the fax machine was a technological marvel.

It’s not about teaching old dogs new tricks, but rather guiding them through a process, and an industry, which has changed rapidly since their last purchase.

Some people think I’m crazy when I tell them, “Buy first, then sell your house.”  The old-school mentality is, “I need to sell my place first, see how much money I can get for it, then go purchase a home.”  But that thinking is totally backwards in today’s market, which is a strong market, and a seller’s market.  So the downsizer, who might take 6-8 months of searching to find a suitable house, needs to understand that selling is the easy part!  This isn’t 1992 when houses took nine months to sell.

All the while, when the downsizers are searching for a new home, they need to be working on their current house as well and getting it ready for sale.  Many people have 25 years worth of clutter in their basements, and they’re not taking it with them to their new 900 square foot condo!

And the sale process has changed drastically from 1987 as well!  Those were the days before the Internet, when Realtors had one Polariod of a home to show prospective buyers.  Today, I have to give my sellers an actual schedule that outlines the two weeks of preparation before the listing.  We have the stager, home inspector, floor plan engineers, photographers, videographer, cleaners – all of whom have to be in on a certain day so the next person can come through.

Lining up the closing date of the new home with the closing date of the current home also depends on the timing of the sale, and explaning to the sellers that owning TWO properties for a week or so isn’t the terrible death that they otherwise think it is.

4) Location

You could argue that this comes first; location, location, location after all.

But once you’ve determined when you want to move, how much you want to cash out, and whether you’re going to be in a house or condo, the locations are pretty-well spelled out for you.

Some downsizers start with location.  “I want to be in a Yorkville condo,” I was told recently by a lady looking to sell her large North Toronto home.  So it’s possible to work backwards from there, but you’re not going to be able to control your equity take-out quite as well.

The toughest thing for downsizers to do is often staying in the same area.  Some people are so attached to their neighbourhood that they don’t want to leave, but it’s hard to go out and buy within that same neighbourhood again, and expect to take out 50% of your equity.

5) Size & Style

This is a sticking point for many downsizers.

Every time I take a couple, who have lived in a large house all their live, in to see their very first condo, the reaction is always the same.  They look at each other, then me, then each other, and then go quiet.

We don’t all live in “shoeboxes in the sky,” but try telling that to a 66-year-old who has lived in six different houses since birth.

I often get, “I want to downsize, but not this much.”  Then I have to explain once again that Toronto is not a cheap place to live, and 1,800 square foot condos can’t be found for $300K.

I’ve seen many people go back to the drawing board, or take a break from the search, after having stepped inside their first 900 square foot condo.  It’s a massive change, and for many people, it can be daunting.

6) Downsize Even More!

You had a private driveway at your house where you could park four cars?  Well, now you get one underground parking space at your condo, and a second is $30,000.

You turned your son’s old bedroom into storage for your old record collection?  You had a whole unfinished basement that was filled with boxes?  Well, now you get one 4 x 6 x 6 locker, located in P1, where you can barely fit your winter tires.

Your kitchen had room for every gadget known to man?  You had three different kinds of blenders?  Well, now you get minimal cupboard space, and you have to downsize to two types of cereal, because there’s no longer room for nine boxes.

You love your couch?  So do I!  But it won’t fit in the living room of your new coach-house.  So get rid of it, and buy one that fits the new space.

“Downsizing” has a different meaning to everybody, and while some people immediately think of the number of bedrooms and bathrooms, very few consider the “small things,” like how many wine glasses you can store in the kitchen cupboard.  Every aspect of a downsizers lifestyle will be affected to some degree, and it takes hundreds of little compromises to get to the finish line.

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

Find Out More About David Read More Posts

Post a Comment

Your email address will not be published.


  1. Rene Brassard

    at 10:53 am

    David, please pay attention to the details… “…all their live…” It’s “all their lives”, man.

    Every time I take a couple, who have lived in a large house all their live, in to see their very first condo, the reaction is always the same.

    1. ABB

      at 11:19 am

      I think David uses a voice dictation software. The commentary usually sounds like it’s voice generated, a bit rambling at times. So the occasional error will be picked up and his quick reading misses it.

    2. phil

      at 10:21 pm

      yeah, I think too this Rene dude needs to be ignored:)

  2. Ashton

    at 11:42 am

    Rene, who the hell cares ‘all their live’ or ‘all their lives’. Correct me if I’m wrong but unless you’re a moron…you still understood David’s point, no?

    1. David Fleming

      at 1:05 pm

      @ Ashton

      Don’t mind Rene. He’s what you call an “Internet troll.” He comes on about once a week to point out minor grammatical errors, then he goes home to his basement apartment, covers his body in peanut-butter, and puts on his grandmother’s underwear…

      1. Ashton

        at 12:42 pm

        @david HAHAHAHA!!!

    2. ScottyP

      at 4:21 pm

      Rene Brassard is clearly insane. Ignore him.

  3. Paully

    at 2:41 pm

    David, you neglected to mention the other obvious option for equity take-out: sell the house, take out 100% of the net capital and rent something.

    Enjoy the same new home, with no huge extra Toronto Land Transfer Tax to pay, minimal legal fees, no property taxes, and no maintenance costs. In today’s market, most Toronto condos can be rented for less than they would cost to carry too. At the same time, your invested capital earns income to help pay the rent.

    Unfortunately, the potential commission for your local neighbourhood Realtor is also much less, so the rental option might not get much mention in most down-sizing discussions.

    1. David Fleming

      at 2:59 pm

      @ Paully

      You make it sound like I did that on purpose!

      True – I didn’t mention this, although I’ve come across it a few times.

      I currently have a set of downsizers who were thinking about renting, but the $3,000/month cost, over two years, was too tough for them to swallow. They’re old school, and thought that “throwing away” $72,000 made no sense. I highlighted the positives: they can take their time, find the right location/neighbourhood, and strike when the time is right.

      They were looking for a house, but I agree that a downsizer looking to rent a condo can benefit financially.

      1. Geoff

        at 12:30 am

        $3000 / month? What were they renting?

  4. Peace Maker

    at 3:00 pm

    Another fantastic and insightful article. Kudos !!!!

  5. Suburban

    at 3:26 pm

    My husband and I are only 39, but we just went through this ourselves. We have no kids and decided to downsize.

    This post is completely accurate, down to the cereal boxes. We actually put our house up for sale, moved into a rental apartment, and went property shopping. So we actually “tried out” downsizing. We liked it, and we managed just fine, but we got rid of So. Much. Stuff!

    I think the biggest adjustment was walking to the grocery store and carrying the groceries home, instead of driving out and loading up the car. And finding somewhere to put the cat’s litterbox…

    As for us, after six months our house didn’t sell (we are in the outer ‘burbs, we got bad advice and priced too high, and we hit the slow-down after last spring), and in the end we had to leave the apartment and move back into the house.

    We still want to do it, but we want a good location, a condo that will appreciate, AND we want to cash out on the house. So yeah. We’re still in the house, LOL!

Pick5 is a weekly series comparing and analyzing five residential properties based on price, style, location, and neighbourhood.

Search Posts