How to master the downsizing conversation with clients

When the cacophony of rushed mornings and teenage rebellion settles into empty bedrooms and a house 30 minutes from anything culturally intriguing, a great location entices many arriving in their third act of life — despite the size sacrifices that were once impossible to make.

Matt Parker

And as baby boomers look for a smaller space that frees them up to enjoy their leisure days, that conversation with established clients about selling the family home is a great opportunity for agents who can master it.

This is one of the topics that Matt Parker, a Keller Williams Realty Puget Sound broker, discusses in his latest book, “Real Estate Smart: The New Home Buying Guide” — and Parker says there’s no reason it shouldn’t be a positive discussion.

Driven by his interest in relationships and real estate, he has some suggestions for agents helping clients through the sometimes difficult downsizing transition.

Parker, who is planning on starting a family with his wife soon, currently lives in a 567-square-foot condo.

He argues in the book: “If more space meant more happiness, people would upsize later when they had more money. We do the opposite after learning the lesson over two to three decades.”

Create a ‘lifestyle spreadsheet’

As a broker who has sold more than $75 million in homes, Parker became a top producer in his market during the real estate collapse in 2008 — all before he was 30.

With his latest self-published book, he was not necessarily telling agents how to do their job or positioning himself as a real estate guru (he has also written a book for new agents: “The Real Estate Agent Talks“) but saw himself more as an advocate for buyers and sellers.

He suggests asking clients to draw up a “lifestyle spreadsheet” that walks them through a work day and an “off” day. That shows the buyer whether space or location has more value.

“When people do a spreadsheet on how much time they spend at home, they can be shocked: ‘We don’t spend that much time there. We go to coffee shops to work and study; we eat in restaurants, spend time in gyms,'” Parker explained.

If you really like reading in your attic, enjoy gardening and love playing catch with your daughter in the yard — then you are getting high value from your house and outdoor space.

But a lot of families spend less time at home than ever, said Parker, with some rooms just collecting dust.

An older couple thinking of downsizing from a 4,000-square-foot home, for example, might not go into half the rooms on a weekly basis, he said.

And for those whose children have left the nest, it can be good for their relationships to bring themselves back to living in a smaller home after years of living in separate spaces favored by families with teenage kids.

That separation can also put a strain on couples who are always retreating to their respective “bat caves,” Parker added.

“In a smaller space, you have to share; you have to discuss things. You do things together.”

A good agent can show clients the other side of giving up space.

With downsizing, people often focus on how they’ll function without that extra square footage — but they fail to see what that decision leaves room to add.

“So that people are not completely shocked from giving up X, Y and Z, clients could look at buying close to a park they love to walk in, or close to a coffee shop, or find a place where they can get a better view,” he suggests.

“The focus should not be on the smaller square footage but on gains that don’t buy the same house, but improve the rest of your life.

“They may be going down in size but going up in happiness.”

Make up for lost space with savvy design

Still, you won’t get back the space you give up when downsizing. So how can agents help clients make a smart choice for their needs, while mitigating the feeling of being cramped?

A well-designed floor plan is key, said Parker.

“A 1,000-square-foot apartment with an open floor plan can feel like 2,000 square feet, while a bad floor plan with 2,000 square feet can feel like 500 square feet,” he explained.

Some agents might think that downsizing clients are not worth the bother, especially compared to an expanding millennial customer base — but don’t underestimate what your downsizing clients are willing to spend, said Parker.

“From my perspective, most deals are worth agents doing. Particularly if you have worked for a customer before because your communication is grooved, so-to-speak, and you don’t have to work at building that customer social capital and trust.”

He added: “I’m not saying get less out of real estate; I am saying get more, with better location, cooler finishes, better floor plans, more custom work, better relationships and, most importantly, more time — our only truly priceless resource.”

Parker also advocates looking for “swaths of green” — finding locations near parks, recreation areas and places that boast a good Walk Score, which takes into account sidewalk safety, connections to local amenities and distance from happenings downtown.

The worldwide smaller housing trend

Need another reason to become an expert in downsizing? Smaller is cooler these days, Parker says.

“This is because in New York, Los Angeles, and Chicago (all large, cool cities) and in Portland, Minneapolis and Denver (all mid-size cities) — and even in small, cool cities — the closer you get to the center, housing size decreases the closer you get to ‘cool’ or the center of town,” he said. “This is true all over the world.”

A recent story on CNBC reported that houses were shrinking by 73 square feet, according the National Association of Homebuilders.

Builders are listening to consumers who would rather live in a smaller house in the right location than a bigger home further out, said the report.

Moreover, this is part of an international trend, said Parker.

Population stress, including bad traffic and strain on resources, does not allow for endless large lots and suburbia into the reaches of infinity, he argues.

Smaller is not only what will happen but what needs to happen for our cities, socialization and world, said the broker.

“If we continue to not spend time at home, there is no reason to be devoting a lot of resources maintaining and heating them,” he added. “It’s wasteful.”

Changing role of the agent

With 15 years in real estate under his belt, Parker also predicts there will be more stratification in the role of the real estate agent in the years ahead.

Within that stratification, the emphasis will move to high-income agents and low-income agents, he added, whereas now there is a bell curve.

“I think the job has stratified [out], so that there are different layers, different practitioners,” Parker said. “The way I run my business, I’m more seen as a CPA, more someone you go to for expert advice, but you don’t count on them to drive you around, to do the minutiae.”

He calls on some of his staff to do real estate’s more everyday tasks, such as putting out signs, organizing inspections and so on.

Agents should not take their role for granted, added the broker: “The business is there because the customers need it, not because we want it. We are serving people; some people start to forget that.

“When a customer hires me, or any other agent, it is a huge statement of trust that you will provide the value they are looking for. Said clearly: they need something, and we provide it.”

Email Gill South.