Selling the family home
The single biggest financial decision most people will make in their lifetime, is purchasing their home; the second is often selling it.
These choices are driven by a number of factors: work, family, weather, services and life stage; all play a role in our decision making process. Before the internet opened the doors to distance learning and mobile offices, we were either forced to go where the jobs were or change our career goals to reflect what was available in our chosen locale. Today, these are problems mostly solved with a quick internet connection. For people in retirement or starting to think about it, the decision making process becomes much more complex; it’s less about employment and more about proximity to family, friends and services.
It’s a given these days that the kids will grow-up, move out and often end up living somewhere far from the parents. Friends will make decisions about lifestyles: winters in Arizona or Florida, homes near their own kids; all of a sudden the social life that you once took for granted disappears. So what do you do, pull up stakes and move in next door to your own kids in a town where you know no-one? Or do you live your lives yearning for the old days, rattling around the house you hoped that your kids would bring the grand-kids back to but never seem to?
Maybe what we need to do is rethink what our social networks look like. If you were born before 1955, then face to face interaction is probably your most important comfortable form of communication, with a handwritten letter a distant second. Anything digital, while convenient, doesn’t take the place of personal interactions. If you were born after 1985, you’re usually hard pressed to understand why anyone would meet face to face if they could get it done on a phone or a tablet. That leaves a very large gap in expectations and all kinds of room for misunderstanding between family and friends.
The answer is perspective.
So you decide to move closer to the kids; you pack up a lifetime and put it all in the back of a 40’ trailer. It’s not only stressful, it’s expensive. Real estate fees, moving costs, property purchase tax, storage costs, connection fees, they all take a piece of the nest egg; not to mention that the end result may be quite different than you expected. Does everybody get along? Do you like where you’re living, do you miss your old home? Do you miss your friends? And that’s all before you realize that your kids' concept of getting together often means texts, emails and Skype conversations – even when you only live a few miles apart.
Neither generation is likely to convince the other their way is best. Of course, there are those who make the leap and they’re the grandmother or grandfather with a Facebook account and a Twitter handle. Most often though, the great technical abyss remains firmly in place; the answer lies in accepting the way things are and using those differences to your advantage.
Start thinking in terms of what’s best for you; maybe you really do want to stay in the place you’ve lived your whole life; you get a smaller house which frees up some capital. You can then use that capital to generate additional income, or use some of it each year to go and visit the kids or fund an annual family trip. There’s no limit on Skype calls, so you can stay connected when you’re not there: talk to the grand-kids every day and still show up for those important moments (birthdays, competitions, important recitals and graduations). You have a quick question or need an answer fast, try texting: trade in that old flip phone for a smart phone and you can get your emails too. If staying in the home town has become more of a weight than an inspiration, and moving near the kids isn’t in the cards or you don’t have kids, maybe you’re adventurous and moving to another country is a possibility. Think about what a dramatically reduced cost of living would do to your bottom line? It’s common now for people to do long term home swaps with people in other countries; with some getting used to, you could easily spend several months a year in different countries in the comfort of a home. Traveling to get there will have a cost; the rest of the costs you would have incurred anyway.
These alternatives may not make sense when specialized healthcare and assisted living needs are part of the package, but while you’re still healthy, why not think outside of the box?
The point of the exercise is to know that there are options out there for anyone to take advantage of. With a little flexibility and imagination you could create a whole new life, all the while staying connected to your old one. Most of the limits that we place upon ourselves are just that, self-imposed. Change is one of those things that require you to look on both sides because quite often, right behind the things we see as challenges, lie great new opportunities.
This is for information purposes only. It is recommended that individuals consult with their financial advisor before acting on any information contained in this article. The opinions stated are those of the author and not necessarily those of Scotia Capital Inc. or The Bank of Nova Scotia. ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.
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