By: Vivien Sharon
It was my pleasure to host an exclusive event at Sotheby’s International Realty Canada in Toronto recently.
The subject was: THE BIG QUESTION: IS NOW THE RIGHT TIME TO DOWNSIZE?
Special guests included Ted Rechtshaffen, who discussed income & tax planning for Boomers and Ismail Barmania, a lawyer specializing in estate planning for Boomers. I discussed the real estate choices facing Empty Nesters planning to Downsize.
From a real estate perspective, here are 5 key concerns that Downsizers face:
- What to do with all our stuff?
- How do we prepare our home for sale?
- Where to move to and when should we sell?
- Will your next move be by choice or circumstance?
- What is our house worth and can we afford to move?
What to do with all our Stuff?
That is one of the biggest concerns. If you are like most people, you’ve accumulated a lot of “stuff” over the course of a lifetime.
Quite often, with the exception of a few family heirlooms, neither adult children nor grandchildren will be interested in these items.
Here are a few ideas that will make the downsizing process easier:
- Make a list of your furniture and household possessions. Decide what things you want to take with you to your next home.
- What does your family want? The best way to handle any potential disagreements is to have family members work it out themselves.
- What to do with valuable items that neither family nor friends want? Depending on the value, an auctioneer may be your best bet. There are auctioneers, appraisers, valuators and other experts who are knowledgeable.
- What can I donate? There are many charities that are interested in donated items that can be picked up or dropped off, usually for a tax receipt.
- Who can help? Fortunately, there is a network of specialists such as transition specialists, (downsizers), movers, packers, home stagers, decorators, contractors, etc., who can simplify the process.
I understand your concerns first-hand. I downsized myself, 15 years ago from a large North York home to a city condo.
Specialized Real Estate Agents for the Boomer/Senior Market
In the past 20 years the idea of specialization by real estate agents has become very popular. There are agents who only work with Buyers, some only with Sellers. Then there are agents like myself, who have chosen to make Boomers and the Seniors market a speciality. I have specialized training in working with Boomers, Seniors and their families as a Master-ASA (Master-Accredited Senior Agent).
I have been trained in what is important to this demographic and the extra time that is required when contemplating a late-in-life move.
What has changed in real estate?
If you are like most Boomers and Seniors, you haven’t bought or sold real estate in many years. The basics of the business hasn’t changed, it’s still all about helping make your move (or your family’s move) as easy as possible.
Prior to 1995 in Ontario and 1994 in British Columbia, all real estate agents were representing the interests of Sellers. This was confusing to Buyers, who thought the agent helping them buy a home was working for them, when in fact, they were working for the Seller. Since the mid-90’s, Buyers are typically represented by an agent they have “hired”, so there is no confusion as to whose best interests the agent is protecting. In all jurisdictions of Canada, a real estate professional is required to present you with a written explanation of how representation works, at the beginning of a working relationship.
Different Commission Models
Sellers pay the Commission to the Listing Brokerage (for Sellers) and also to the Co-operating Brokerage (for Buyers) upon closing.
When dealing with such a large investment as your home, which is also a huge nest egg, it would be penny-wise and pound-foolish to base your decision solely on the fee. As with professionals in all areas of life, you really do get what you pay for.
Who Pays Land Transfer Tax?
Buyers of houses and condos pay Land Transfer Tax when they purchase a property. Each province has its own set of rules when it comes to Land Transfer Tax. Sellers never pay. Your lawyer will arrange for land transfer taxes to be paid when the deed to the new home is transferred in your name on closing day. The cost of your land transfer tax is a percentage of your home’s value.
There is a significant amount of paperwork when you embark on a real estate transaction, whether buying, selling or both. A real estate agent will orient you on all the required paperwork. The forms are standard on a provincial basis, so real estate lawyers will be very familiar with them.
Please contact me if you have any real estate questions or concerns. I am happy to help.
Vivien Sharon, BA, Master-ASA, Seniors Real Estate
Real Estate Broker
Sotheby’s International Realty Canada