May 08, 2026

How Much Money Will I Actually Get From Selling My Home?

Understanding Net Proceeds, Costs, and Strategic Financial Planning

One of the primary motivations for downsizing is financial: unlocking home equity, reducing expenses, and improving cash flow in retirement. But the financial reality is more nuanced than "sell high, buy low." Understanding the true financial picture of your downsize helps you make informed decisions and plan strategically.

Calculating Net Proceeds from Your Current Home Sale

Your net proceeds aren't simply your selling price. Here's what gets deducted: Realtor commission (typically 5-6%), closing costs (title, inspections, appraisal, usually 2-5%), and potentially capital gains taxes (if your profit exceeds exemption amounts). For many homeowners 55 and older, there's a $500,000 capital gains exclusion ($250,000 for single filers), which significantly reduces taxes. Work with a CPA to understand your specific tax situation.

Example Calculation

• Home sells for: $300,000

• Less: Realtor commission (6%): -$18,000

• Less: Closing costs (3%): -$9,000

• Less: Capital gains (after $250k exemption): $0

• Net proceeds: $273,000

The True Cost of Living Comparison

Downsizing typically saves money, but the savings depend on what you're moving into. A smaller single-family home might still have property taxes, insurance, and maintenance. A condo cuts maintenance but adds HOA fees. Rental saves ownership expenses but offers no equity building. Compare apples to apples: total monthly or annual costs, not just mortgage difference.

Using Proceeds Strategically for Retirement

The money you unlock from downsizing can fund: retirement income (placed in investments generating dividends), long-term care planning, healthcare expenses, legacy gifts to heirs, or travel and experiences. Many people use proceeds to pay off remaining mortgage debt, eliminating a monthly obligation and reducing financial stress.

Tax Deductions for Charitable Donations

Items donated in your downsize are tax-deductible. Document donations with photos, values (use IRS valuation guides), and receipts. If you itemize deductions, this can meaningfully reduce your tax liability. Work with a tax professional to maximize deductions.

Working with a Real Estate Professional Who Understands Finance

A good downsizing specialist understands not just real estate, but retirement planning, tax implications, and financial strategy. They can help you time your sale, price competitively, and understand the financial implications of your move.

Ready to explore your options?

I'm DeAnna Murphy, a senior transitions and downsizing specialist serving Hendricks County and central Indiana. I help families like yours navigate this major life decision with expertise, compassion, and a deep understanding of local housing options.

Let's talk about what's possible for you. Contact me today for a confidential, no-pressure conversation.