Home Downsizing Consulting Blog by Michael Ivankovich

How Do I Know What My Things Are Worth?

We hear this question all the time. In our book, Home Downsizing in Four Easy Steps, we provide readers with 10 FREE ways (price guides, trade papers, eBay completed prices, Internet web sites, appraisal fairs, etc.) to investigate the value of their items, and 6 FREE ways to help them identify what their things are worth. These ideas are a great way to start learning the value of your personal property assets in today's rapidly changing market.

But this takes considerable time and, unless you know exactly what you are doing, you still run the risk of making a major mistake. And beware of "free appraisals" provided by well-meaning but un-knowledgeable friends.

The #1 way to learn the value of your antiques, collectibles, collections, household items, and yes, even the junk, is to seek the help of a personal property professional. It could be a Home Downsizing Consultant, an Appraiser, an Auctioneer, or an Antique Dealer. But here is the key: DO NOT bring in anyone for advice who has a vested interest in purchasing any of your items. It is all too tempting for them to offer a low-ball number in order to buy your better items at less than fair market value.

Basically you have two primary options. You may want to consider having a formal, written USPAP Appraisal completed by a qualified appraiser who specializes in the type of merchandise that you have. USPAP means "Uniform Standards, Professional Appraisal Practice", and this means that the appraiser has followed the guideline and regulations promulgated by both the Appraisal Institute, and the Appraisal Foundation. However, a comprehensive USPAP appraisal can take considerable time, it can be quite expensive, and is often un-necessary at this point of the home downsizing process. USPAP appraisals are generally used for estate, divorce, insurance, or other legal appraisal work.

An alternative approach would be to have an "In-Home Personal Property Valuation" done by a qualified individual. With this type of valuation you will generally receive a verbal, ballpark valuation. It is not in writing, it is not as thorough as a USPAP appraisal, but because it takes much less time to complete, the cost is considerably lower. For most, in our opinion this is generally the best approach at the start of the downsizing process.

You will have to decide which valuation approach is best for you. But in summary…you should NEVER sell a thing until you know what it is worth.

Home Downsizing Strategy #1: You should never sell anything until you understand its value in today's market.

Home Downsizing Strategy #2: You should generally not sell your merchandise to the individual who tells you what it is worth.

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How Long Does It Take to Downsize the Typical Home?

You've probably been thinking about downsizing your home for a while but the simple thought of it is almost overwhelming. You've been in your home for longer than you can remember, and it's filled to the rafters with quality merchandise, general household items, family memories, and more junk that you would like. But at some point you will have little choice. It will be time to downsize and shed much of the excess items sitting around your home, basement, garage, attic, and outbuildings that you no longer want or need.

Even if you're not yet ready to begin the downsizing process, it's not too early to begin "planning" for it today. Because it takes time to do it right. For the typical home, 6 months - 1 year is not uncommon. It's not that you can't cleanout a home in a much shorter time, you can. But if you want to sell your excess personal property assets for maximum value, it takes time to get everything ready.

You must get yourself mentally prepared and organized.
You must sort your items into one of the 8 standard sorting categories (keeping, giving to family, selling, donating, dumping, etc.).
You must prepare your items for sale (cleaning, repairing, etc.).
It takes time to locate a suitable buyer (advertising, research, etc.). The more potential buyers you line up, the better off you will be.
It takes time to negotiate a favorable price. If you find yourself in a rush to sell, you will find yourself at the short end of the bargaining table.
It takes time to close a sale. If your first buyer backs out, unless you have cultivated multiple potential buyers, you may have to start all over again. And it takes even longer if you are seeking multiple buyers for multiple collections or assets.

Remember, anyone can "clean out" a home in only a matter of days. But if you want to exchange your lifetime's accumulation for the maximum value possible, don't wait until the last minute to begin.

Home Downsizing Strategy: It generally takes 6 months - 1 year to downsize the typical home.

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Naturally Occurring Retirement Communities

The coming explosion in America's 65+ age demographic will most likely lead a shortage in senior retirement housing. This senior housing shortage will force a larger percentage of older Americans to remain in their homes longer than by today's standards. One likely result of this will be an increase in in-law apartments and shared housing. And a second likely result will be the phenomenon called "Naturally Occurring Retirement Communities", or NORC's.

Naturally Occurring Retirement Communities will occur for several reasons.

Older people typically like to live among people their own age.
A shortage in senior housing in the coming years will force people to remain in their homes longer than by today's standards.

As a result we will most likely see an increasing number of neighborhoods dominated by residents 65+. And this will place an added demand on local municipalities to provide such senior services as localized health care, smaller housing, elder-friendly indoor and outdoor design, food and shopping services, and local transportation to these aging communities. We are seeing it already today in certain communities.

Home Downsizing Tip: In the coming years the shortage in retirement home space will result in Naturally Occurring Retirement Communities in many U.S. cities.

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The Aging of America

Here are two very interesting statistics that should have a direct bearing on Home Downsizing in the coming years. According to the Delaware Valley (PA) Regional Planning Council:

Between 2010-2030 the number of Americans age 65+ will double to more than 70,000,000.
In Philadelphia alone, 1-in-5 Philadelphians will be age 65+ by 2025.

These two statistics suggest several important implications.

With the growing number of Americans reaching age 65+ in the coming years, there should be a growing number of Americans seeking to downsize their homes.
As the number of Americans reaching age 65+ increases, it is questionable whether there will be enough retirement home space to accommodate all of these older Americans. This would suggest that many may have to remain in their homes longer than they do in today's world.

As a result over the next 20 years many senior citizens will be "over-housed"…i.e., forced to live in homes larger than they would like. Most likely even those who may not be moving will be forced to downsize, just to make their homes more manageable as they age.

Home Downsizing Tip: As the number of Americans age 65+ continues to grow over the next 20 years, more will be downsizing but remaining in their homes, because there may not be enough retirement home space available for all who need it.

Key Words: home downsizing, over-housing, home downsizing tip

Why Should I Pay Someone
To Tell Me About What I Already Own?

We've heard this question on multiple occasions from people who didn't want to invest in a Personal Property Valuation prior to downsizing. Our standard response: You need a Personal Property Valuation in order to save yourself potentially thousands of dollars as you downsize.

Many people simply don't realize that next to their home and real estate investment, the Personal Property Assets they have accumulated over the years often represent one of their largest financial investments. Most American homes have some type of hidden treasures. Your job is to identify your hidden treasures…before you un-knowingly sell them too cheaply.

Here are just a few examples of things we have seen over the years:

A 1939 Ford Woodys Wagon, which sat rusting away in a farm field for more than 20 years, sold for $47,300 after someone identified it as a very collectible car. Tens-of-thousands of people had driven past it over the years before one individual finally recognized its true worth.
More than 30 hand-carved duck decoys, which sat on a family's shelves for more than 40 years, sold for nearly $38,000 at Auction. The owners would have been happy to sell them for a few thousand dollars, had someone made them such an offer. Fortunately, no one ever did.
A large unframed tapestry, purchased in a box lot for a few dollars, sold for more than $22,000 at Auction. The owner thought so little of the piece prior to its sale that he had left it at the back door of the Auction Center, outdoors and un-protected, for an entire weekend before the Auction Company found it on the following Monday and placed it in a subsequent Catalog Auction.
Four framed 20th century oriental ceramic panels, which had been estimated in an Auction Catalog for $200-$400…sold for a strong $47,150….to a bidder in China.

Don't underestimate the value of your antiques, collectibles, household items and yes, sometimes your junk. Most homes have some type of hidden treasures. Your job is to identify those treasures…before you give them away for less than they are worth. And if you can't identify them yourself, then maybe its time to bring in a Personal Property Professional to help you determine exactly what you already own.

Key Words: Home Downsizing, Downsizing, Personal Property Valuation, Personal Property Assets, Hidden Treasures

Don't Throw It Away.
FreeCycle It.

When downsizing your home certain things have considerable financial value, most things have moderate financial value, and other items have little or no financial value, although they may still have some useful life remaining.

Instead of trashing these low value items, perhaps a better alternative is to "FreeCycle" them, or find them a new home by giving them away for free. According to its www.FreeCycle.org web site, The FreeCycle Network™ is made up of 4,664 groups with 6,365,000 members across the globe. It's a grassroots and entirely nonprofit movement of people who are giving (& getting) stuff for free in their own towns. It's all about reuse and keeping good stuff out of landfills. Each local group is moderated by a local volunteer...".

To avoid having to incur shipping costs, which would make FreeCycle un-workable, listings are broken down by regions within each state. When I keyed in my home town of "Doylestown PA", I was taken to a page for "Central Bucks County/Doylestown", and learned that there were 3742 registered FreeCycle members in my area alone.

Membership is free, and everything posted on FreeCycle must be FREE, legal and appropriate for all ages. To view the items being given away or sought in a given location, you must become a member of the local group. Registration on the web site is free, quick and easy and you can begin posting your free items immediately.

The biggest positive of this concept is that you can get rid of items that you no longer want or need, while helping someone in the process. The greatest negative of the FreeCycle concept is that you may have to allow strangers into your home.

Only you can decide if this concept works for you. Either way, FreeCycle is a great idea and is something that you should at least consider as part of your home downsizing.

Key Words: FreeCycle, Downsizing, Home Downsizing