Should I Stay or Should I Go?

You’re getting close to retirement.  But do you know if you will stay or go?  How’s your planning going?  You’re in good shape if you’ve:

• chosen your retirement date
• calculated your retirement benefits and know you can live comfortably
• compiled your bucket list and know how you will pay for each item
• decided where you want to live after retirement

Feeling pretty sure of yourself, aren’t you?

Not so fast!

Before you put the For Sale sign in the front yard and call the movers, we need to talk about your decision to sell your house and move someplace else.  It sounds like a great idea, right?  It’s January, the snow is up to your knees – maybe higher, and you just can’t stand another winter like this one.  To make matters worse, your best friend moved to Florida last year and keeps sending pictures of herself in the pool in January, saying, “Wish you were here.”  Just can’t take it any more – you’re calling the realtor today.

But hold on.  Let’s just make sure you have all the information you need to make a decision like this.  Okay?  Stick with me here.

Do you have a clear picture of what your home is worth right now?  Not what you “think” it’s worth, but what it’s REALLY worth.

Find A Good Realtor

Talk to some of your friends and get names of realtors they recommend.  Just because Tammy Sue Smith-Jones sends you a postcard every month, telling you how many houses she’s sold and providing a recipe that has 22 ingredients (that you will NEVER, EVER make) doesn’t mean she’s a great realtor. You know what?  You’re trusting you most expensive possession to a realtor.   Make sure you get a good one.

Interview two or three realtors and pick one that you get along with and trust.  Get an estimate of what your house is worth from each one you interview.  It will probably be a rough estimate, based on questions about the size, age and condition of your home and then comparing it to others in your neighborhood that have sold recently. Usually they will do a walk-through with you, pointing out things they see on the surface that you need to do before selling.  You must look at your home objectively.  That is SO hard to do if you have lived there 30+ years, raised your kids there and watched little Natalie learn to walk there.  It’s a business decision, not a heart decision to sell your house.  Just keep telling yourself that.

Do NOT force the realtor to list your house for more than it’s worth.  You will be disappointed when your house is still on the market six months after it was listed and you will be dropping the price every month (a sign of desperation that many buyers look for).  Remember, not matter how big, small, old, new or how many memories it holds, it’s only worth what someone will pay for it.  Period.  You must be able to trust the realtor.

Do the Math

So you got the estimate you were hoping for.  If your home is completely mortgage-free, you just have to subtract the realtor fees from the sales price to get a fairly good idea of your walking-away amount.  (Cue a little happy dance!)

If you still have a mortgage on your house, the calculation is not much worse but there’s one extra step.  Besides subtracting the realtor fees from the sales price, you must also subtract the outstanding balance on the house.  Why?  Really?  I’m not even going to answer that question – you know why.

Now you know your best-case scenario – your walk-away amount if the house sells for the listing price.  I don’t want to burst your bubble or anything, but just remember your sales price was just a starting point as far as buyers are concerned.  Some are gutsy – if your house is listed for $300k, they will offer you $150K and fully expect you to bargain with them.  “This ain’t no swap meet,” you may be thinking, but we have home-improvement TV shows to thank for this.  All I’m saying is you may have to do some back-and-forth with the potential buyers before you come to an agreement.  On the flip side, if you happen to be in a “seller’s market”, meaning there are more buyers than there are homes for sale, you may get into a bidding war and receive an offer OVER the asking price.  Honestly, I WISH that would happen to me, as a seller . . . it hasn’t so far!

What’s next?

Figure Out Where You Want to Move

Same area?

If you’re looking to downsize and stay in the same area where you currently live, you just need to look at homes for sale in the price range you can afford.  (There are all types of calculators available to tell you what you can afford based on your income, your down-payment, etc.)  Don’t forget to add the taxes and insurance when calculating the new payment.  You may think the best-case scenario is to pay cash for the new home if you had that much equity in your old home.  My strong suggestion is that you talk to a financial advisor before you make any decisions about large sums of money.  He will ask you questions you probably haven’t considered, but should.

New state?

How much research have you done?  Have you read the “10 Best Places to Retire” articles?  Do you know how the cost of living in your current area compares to the new area(s) you are considering?

• Cost of homes – more or less expensive than your current home?
• Taxes – state and local
• Cost of food and services
• Good medical services available – hospital(s) and doctors
• Entertainment
• Learning opportunities
• Restaurants
• Sports
• And my favorite – golf courses

So much to think about!!

Out of the country?

Moving out of the country is a big topic and will be covered in another article or even a series of articles.  There is SO much more to think about if you’re even considering moving to another country.  All of the items listed above, plus

• Potential language barriers
• Currency differences
• Safety
• Transportation
• Pets
• Travel back to see family
• Rules for purchasing a home

The list is much more extensive for moving out of the country.  Remember this is a BIG decision.

Stay tuned.  I will update this article with a link to the “Moving Out of the Country” article(s) once written.

What are your thoughts?  Retire in your current home, downsize, or move to a warmer climate?  Leave me a comment below.