Instead of moving out to "downsize" why not simply "de-model" your existing home to reduce its square footage?

Home owners typically downsize, or buy a smaller home, when they age, retire, send the kids off to college and a life of their own and when they choose a vacation or retirement home.

Yet significant studies show a large demographic group would prefer to retire in place, remaining in their own, perhaps too large home when they retire.

AARP's "Home Sweet Home" study says two in three of older Americans are quite satisfied with their current home and they like the neighborhood. A "sizable majority" of them own a traditional single-family house, have lived in their home for many years, and plan to remain there for the rest of their lives.

Chances are, however, the current home may not be a good fit for the lifestyle of someone who wants to spend less time on maintenance, upkeep and just getting around.

For them a "subtraction" to reduce space could be the answer, just as others complete an "addition" when they need more space.

"It is not cheap to sell and buy a new home," says Linnea Halverson a home mortgage consultant with Wells Fargo.

The reasons supporting a decision to tear down instead of moving down, however, are few. Unique circumstances typically compel a home owner to downsize in place.

"I know of a recent situation where they did that very thing. They had a big, four-level home and had to 'move down' or move into a one-level house due to a recent accident. They decided against (the move) because it was the only house their kids knew, and it was in one of the nicest locations in the area. Financially it was wiser so they 'downsized' it," says Sandra K. Holte, a real estate agent with Park Company/GMAC in Fargo, ND.

"They ripped out the fireplace, converted the family room to accommodate a small bedroom and a bathroom and put in a lift from the kitchen to this lower level. They are still pondering some other options to the home, but financially, they said, it was wiser since 'downsizing' was cost prohibitive," she added.

Palo Alto, CA architect Judith Wasserman says in most cases subtractions are only very small jobs typically performed to correct poor workmanship, rather than to actually downsize.

"I only did one, and it was very tiny -- cut off a corner of a previous bad addition to make it a tiny porch. In all seriousness, I think that making your house smaller -- unless "location location location" is the key ingredient -- is not so smart financially. The big house sells better. Sometimes it might be a good idea to remove a previous bad addition, especially if the house has historic value, to restore it to its original condition, or to do a better addition," she said.

It may also be a good idea to rip out a piece of your home when that "addition" was constructed illegally.

"If you are simply taking off an old sun room that is no longer attractive, fine. Or perhaps your kids are gone and that addition, that did not have permits, is no longer needed and you know the city has taken an interest in it for tax reasons. Or the addition has no value and is just plan ugly," said Halverson.

Where zoning permits it, a better idea could be a conversion -- say transforming one home into two. Given today's NIMBYism (Not-In-My-Back-Yard -- a sentiment often from single-family home owners who want to maintain the status quo in home types), however, obtaining a zoning variance will likely prove difficult.

"...60 to 65 years ago...the homes in the neighborhood where I grew up were a little larger than usual. It wasn't a rich neighborhood, but more like upper middle class. The doctor who lived across the alley from us got older and they remodeled their two story home into flats, one up and one down. It reduced the size of their quarters, since the kids were gone, and provided an income for them in their old age, and for her when she was widowed," said a Sunnyvale, CA certified public accountant Leonard W. Williams.

"Another couple in our block did the same thing," he added.

Tearing out perfectly legal and structurally sound rooms or ripping off whole floors, however, likely would become too cost prohibitive. That's not just because of the demolition and rubble removal costs, but also because of the expense associated with obtaining the necessary permits and performing required finishing work.

"Mostly it is the removal a flat roof and cheap-o additions when the cost of upgrading existing structures would exceed the budget and not have the desired effect on appreciated value. Construction work is a hassle to live with. It takes less time to tear off the box at the back of the house than to hire an architect to try to integrate it," said Mike Sterling of Sterling Inspection Services in San Anselmo, CA.

Another benefit in some areas could be smaller property taxes for a smaller home. A smaller tax bill would, however, come at the expense of a less valuable home.

"It makes no sense whatsoever. You'd be devaluing your home. In California when you move some people get to keep their same property tax. (When you tear down part of your home, you are taking down the value of your home and it's penny wise and pound foolish," said Ray Brown a San Francisco real estate broker and co-author of "Home Buying For Dummies" ($21.99) and "House Selling For Dummies" ($16.99).

For those who simply must downsize, and financially can't do so by moving out of their too-large home, it probably makes more economical and common sense to take in a border or simply seal off the unused portion of a home. For a more energy efficient approach, you also can upgrade to an area heating and cooling system that allows the home owner to heat or cool only those portions of a home actually used.

"It would be cheaper to just close off part of the house. Nothing fancy. Just closing heater vents, closing interior doors. The cost to maintain extra square footage is insignificant other than heat. Better yet, contact Project Match (or similar roommate services) and share your home with someone else." says Richard Calhoun, a San Jose broker with Creekside Realty.

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