Downsizing and Real Estate

5/23/2024 | By Laura Vecsey

Downsizing in retirement? In addition to deciding where to go, most retirees also need to sell an existing home – perhaps one they have lived in for decades. Here are tips for selling your home.

Know what your home is worth.

Homeowners can get a basic understanding of what their home is worth by tooling around on Zillow, and other online sites that have estimator tools. But it’s also wise to consult with at least two or three local real estate agents.

Negotiate the commission rate.

Real estate commissions have always been negotiable, but sellers rarely had much opportunity to haggle with an agent. That’s changing. In October the realtors’ association and several brokerages were hit with a $1.8 billion judgment in a class-action antitrust suit that said commissions were artificially high. Then, in March, the association reached a nationwide, $418 million settlement of claims that the industry conspired to keep commissions high. The settlement, which is pending approval, promises to change the way real estate commissions are paid. Realtors agreed, for example, to stop requiring sellers to pay buyers agents’ commissions. The changes are expected to go into effect in July.

Understand the housing market.

Senior woman holding a little model of a home in her hand.

Demand for properties is high. Mortgage rates are down from their October 2023 peak. But low inventory and higher prices are putting Baby Boomers on a collision course with their desire to move to something smaller, cheaper or easier to manage. In February, Federal Reserve Chairman Jerome Powell said he believes the U.S. housing market is undersupplied and will remain so for years. That should concern downsizers who are hoping to trade what they have for something better, only to find market conditions discouraging.

“With the current situation of the real estate market, the downsized property may be significantly more expensive in not only price, but also in taxes, HOA fees, interest rate, etc.,” says Andrew Petersen, an agent in Pompano Beach, Florida.

Declutter, donate, throw away.

Stop asking your kids if they want Aunt Emma’s old China. (They don’t.) Specialists can help manage all aspects of decluttering and downsizing, starting with the National Association of Senior & Specialty Move Managers ( ).

Related: Ideas for decluttering valuable possessions with love and grace

Stage your home.

Sellers need to maximize all the assets of their homes and minimize any feature that will cause buyers to balk. In a time when most sellers have amassed equity in their homes, spending a little to wow buyers is a smart investment in your quest to successfully downsize. “Staging helps the purchaser visually see the potential of the home and leads to an emotional buy,” says Manhattan interior designer Ronnie Rosenberg. “It also usually brings in a higher price and a quicker sale.”

Know your home’s cost basis.

Homeowners sitting on a lot of equity may feel like they’ve hit the lottery. But records and invoices for all the repairs and upgrades tell a different story about what your home cost. For tax purposes, a home improvement is any expense that materially adds to the value of your home, significantly prolongs its useful life or adapts it to new uses. Documenting these items can reduce your capital gains exposure and, for buyers, demonstrate the investment you’ve made in the home, helping to justify the list price.

Laura Vecsey is a contributing writer at Kiplinger’s Retirement Report. For more on this and similar money topics, visit

©2024 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.

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Laura Vecsey