Comparing house and condo values before you downsize

Homeowners planning to trade a house for a condo often get one valuation, on the property they are selling, and treat the purchase side as a fixed number. A better approach values both transactions together, because the gap between them is what actually funds your next years.

Start with a realistic number on the house

A house valuation needs to reflect current condition, not the price a neighbour got two years ago. Lot size, renovations, and deferred maintenance all move the number meaningfully, and an outdated estimate leads to budgeting mistakes on the condo side.

Condo valuations work differently

Where a house is valued largely on land and structure, a condo's value is driven by building-specific factors: reserve fund health, maintenance fee trends, floor, exposure, and recent sales within the same building rather than the wider neighbourhood. Two units with identical square footage can carry very different values if one building has upcoming special assessments.

• Ask for recent comparable sales in the same building first
• Review the status certificate for reserve fund adequacy
• Factor the monthly fee into your ongoing cost, not just the purchase price
• Check whether the unit has parking and locker, since these carry separate value

The net figure is what matters

Subtract selling costs from your house's appraised value, then add the purchase price and closing costs for the condo. What is left is your real liquidity for retirement, travel, or helping family. Many downsizers are surprised that the net gap is smaller than expected once fees, land transfer tax, and legal costs on both ends are included.

Order of transactions affects the numbers too

If you buy before selling, you may need interim financing, which has its own carrying cost that eats into your net proceeds. If you sell first, you have a firmer valuation to work from but may face a temporary move. Neither choice is free, and both should be priced out before you commit.

Get both valuations before you decide

A single number on your current home tells you what you are giving up. Pairing it with a realistic valuation of the condo you are considering tells you what you are actually gaining, which is the number that should drive the decision.