The largest downside of downsizing (see what I did there?) is the process itself. Buying and selling, or selling and buying. Moving. It is all a difficult time. Hopefully I can provide some great tips for each step of the way.
When it comes to buying first or selling first, this one decision can have huge implications. Let's cover the basics. There are 4 possible scenarios:
1. Buying first without the contingency of selling your house.
2. Buying contingent on the sale of your house.
3. Selling without it being contingent on buying a home
4. Selling contingent on you finding a home.
This is the perhaps the best possible scenario of the four, although it puts stress on you, as the seller. Buy the house (Buying 101) independently of selling your house (Selling 101). This is what most buyers do, and in a seller's market, probably the only option. If you purchase without it being contingent on the sale of your house, be prepared to own two houses for a period of a month or two. What this does give you is leverage on the purchase since it is non-contingent, overlap so there is time to move, but some extra stress that comes with worrying about whether your house will sell or not.
Buying with the contingency of selling your home
Usually this scenario is because the mortgage company requires you to sell in order to buy. In a buyer's market this works out ok, but in a seller's market it doesn't work at all. This is because the sellers of the house you are trying to purchase probably won't accept a contingent offer because they have other offers they can accept instead. Why not choose an offer that is non-contingent. But with this scenario, we would make the closing dates of the purchase and the sale, the same date. The basic premise is that you will have to have everything out of the house and in a moving truck so that you can close on the sale of your existing house in the morning, and purchase the new house in the afternoon. This way you'll have the proceeds from the sale to purchase.
This is just a straight sale of a house. Some people choose this method as it is the simplest of both selling and buying. But there may be a few weeks where you'll need to find a place to stay, whether it is with family or friends, or a short-term rental. It's less complicated than any of the other scenarios, and sometimes we can time both closings to happen on the same day. But you can't count on it.
Selling contingent on you finding a home
Putting your house on the market with the phrase "subject to the seller finding a house of their choice" is sometimes done. In tight markets (i.e. seller's markets) where inventory is low, a buyer may not like the idea that they don't know when they can close on your house. This is because it may take a while for you to find a home. In this case, a buyer may make an offer, and while you are starting your search, they may still be looking at other homes as a backup plan.
Getting rid of household items
In downsizing, one important aspect to look at is that your furniture may not fit in the new house. Or it may be the wrong scale for the rooms in the new house. Whatever the case may be, you should consider how you would like to get rid of furniture or other personal artifacts. This may be a yard sale, garage sale, estate sale, or donations. Be sure to contact our stagers and have them help out with which items to keep and which items to let go of.