Q. What are the benefits of trading down to a smaller home?

A. Also known as ‘down-sizing’, trading down generally involves selling the family home and relocating to a more manageable alternative. It often involves shifting to a more affordable home to free up capital and is a popular strategy with older Australians approaching retirement and sea changers.

While freeing up some equity can be an attractive proposition, downsizing to a cheaper home could affect any Centrelink entitlements, as a home isn’t included in the means test for the age pension. However by shifting the additional funds into a Centrelink-compliant income stream, like a complying pension, it is possible to maintain social security benefits. It can be a little complicated, so I would advise a meeting with a financial consultant or accountant before making a move.

So, as long as you consider the possibilities, downsizing can help you free up some cash and into a more comfortable lifestyle. If trading down means moving to a new region, town or suburb, the trick is to do some preliminary research. This might involve taking a holiday to a new location – at which point you can investigate the local amenities such as hospitals, schools, transport and leisure activities. A local Raine & Horne real estate agent will be able to help with the features and benefits of locations under consideration.

Q. My agent wants to put a price range on my property rather than a fixed price. Why is this?

A. To ensure a home sells faster, it’s important to take price out of the equation. Auction is often the best method for doing this. However, where an auction isn’t an option, a price range strategy can be a useful alternative.

Choosing a range may increase buyer enquiries and then it is your agent’s job to negotiate the best possible price. Also, the fixed price method doesn’t allow vendors scope to negotiate – except down.

Also if a buyer offers a price, which is rejected, the price range must be adjusted by your agent. Failure here means running foul of the Office of Consumer and Business Affairs (OCBA).

This Newsletter Article was brought to you by Raine & Horne Glenelg – your Glenelg Real Estate Agent and Property Manager.

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