Moving to a smaller home isn’t always cheaper but it still may be the right move for you.

Does a smaller home mean you’ll save money? It might but there are one-time and on-going expenses that catch many people off guard. If you’re wondering if it’s time to downsize, consider these hidden costs that may come with a move.

Getting your existing home ready to sell

To prepare your home to go on the market, you may need to correct cosmetic issues and catch up with any maintenance that’s been put off. It’s worth investing in paint and minor updates to help attract buyers and faster offers. Depending on what needs to be done, out-of-pocket costs could be a few hundred dollars or more than a thousand.

You may also want to hire a professional who can stage your home at the cost of $600 to $800. If you need to rent furniture for staging, add around $500 per room per month.

Fees related to buying and selling

When buying and selling real estate, account for transaction costs. When selling, the biggest cost is commission for the real estate agent(s). When buying your new, smaller home you need to pay for inspections and closing costs for your home loan. In many cases, you can roll closing costs into the loan.

Costs of moving

If you have minimal belongings and are moving locally you may be able to keep moving expenses to less than $2,000. If you have items that require specialized handling, for example fine art or antiques, the cost will go up. Local movers charge by the hour, so take the word downsizing literally. Purge your belongings before you move to help keep moving costs down.

Making a long distance move? Depending on how far you’re going, the moving bill can easily reach $10,000, $15,000, even $20,000 or more.

Long-distance movers charge by distance and weight. Only move what’s necessary. Sell or give away heavy items.

Also, consider if the furnishings you have now will really suit your new home. Lots of people move to Florida with their rich brown leather sofas and heavy wood furniture only to find it doesn’t suit the mood. In some cases, people find that their existing furniture simply doesn’t fit in their new space. It’s more cost effective to sell your existing furniture and start fresh at your new home than it is to move the old furniture, find it no longer fits your lifestyle or space and then buy new.

Downsizing services and sales

If you like selling things through Facebook Marketplace and holding garage sales, DIY downsizing of your possessions will save you a lot of money. However, if you need to hire professionals to help sort and organize goods, as well as sell them, expect to pay a setup fee of at least $500 and about 30% in commission on the sales.

The new home’s finishing touches

When moving to a new space, there will be things you want to add for comfort, privacy and style. Rugs, window coverings, appliances and modifications for safety (like grab bars in the shower) can quickly add up.

Higher cost of living in the new location

Downsizing doesn’t mean expenses will automatically go down. Before committing to a move, research all the costs related to day-to-day living. This includes HOA and condo dues, the cost of utilities, property taxes, homeowners insurance, sales tax, restaurant meals and groceries.

Take time to consider all expenses associated with a smaller place and how they will affect your finances. Even though there are hidden costs to downsizing, it still may be the right move if it allows you to do the things you want and live safely.

 

All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications, and collateral conditions.”