How to Save When Downsizing Your Home

An In-Depth Guide to the Upsides of Downsizing!

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So you’re considering downsizing your home.

Your home is your biggest asset. If you’re looking to downsize, then you’re probably looking to leverage your equity to plan for your or your family’s future, cashing in on the work you’ve put into your home up to this point.

There are plenty of upsides to downsizing: saving time, freeing up equity that is tied down, drastically lowering your mortgage payments, building a nest egg, and peace of mind.

We’ve created out an in-depth guide on downsizing your home that includes where to start, best practices, how to save the most money when you downsize, and tricks and tips make the process a breeze.

Where to Start

Let’s start with the two outcomes that need to be front of mind when considering downsizing:

Outcome #1: You need to get the most value from selling your current home.
Outcome #2: You need to buy a home that meets all of your needs.

While these outcomes may seem self-explanatory, there are quite a few factors to consider.

You’ve spent years building equity in your current home so it makes sense that you would want to preserve that equity moving forward.

There are multiple ways to list your home, but not all of them are in line with the outcomes above.

If you list with a traditional agent, you’ll have to give up 5-6% of your home’s value in real estate commission fees: 3% to the agent who lists your home and 3% to the agent who brings a buyer.

Using a discount or flat-fee real estate agent means you’ll avoid a large portion of traditional commissions costs, paying as little as $3,000 to list and sell your home.

In addition, Clever Partner Agents offer rebates for those looking to downsize by offering up to a 1% rebate when you buy your home.

Sell or Buy a Home with Clever and Save Thousands!

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When to Consider Downsizing

If you’re not sure whether downsizing makes sense for you, let’s first explore different situations and stages of life where downsizing helps solve financial, lifestyle, and other homeowner-related problems.


You’ve made it to retirement. Enjoy it! It’s common to downsize after retiring. You’re ready to spend more time with friends and family. You’re ready to do some extended vacationing. Most importantly, you’re ready to save on property taxes and monthly homeowner expenses. Owning a large home is a lot of work, and the extra expenses can make it difficult to travel in style.

Maintenance Costs

Usually unforeseen, rarely planned for, and inevitably a nuisance, maintenance costs and expenses with a larger home are, well, larger. You can usually estimate maintenance costs of a typical home will be 1% of the purchase price. Downsizing into a smaller home will drastically lower your maintenance costs, as well as the labor it takes to take care of your home. This gives you more time and funds to do the things you really want to do.


If you’ve found yourself feeling stressed over mortgage payments, property taxes, or cost of living expenses, downsizing may be the answer. Downsizing can significantly reduce the burden of the costs above, allowing you to focus on what’s important to you and your family. You can take the equity you’ve built in your current home to buy a smaller home without a mortgage or with a drastically lower mortgage. The monthly expenses saved from a smaller mortgage can be life changing when you’re in retirement on a fixed income.

Empty Nest

If your children have recently (or not-so-recently!) moved out, downsizing may make a whole lot of sense. Downsizing during the period between sending your kids off to college and retirement can be financially rewarding, allowing you to plan and save for your retirement simultaneously. It’s also very practical to downsize into a smaller house when your kids go to college. Paying for utilities on a large empty house can be expensive, but the savings you’ll get from downsizing can help you reach an early retirement.

The Financial Benefits of Downsizing

Lower Mortgage Payments

The biggest expense for homeowners is typically the mortgage payment. Downsizing your home could help you save considerably month to month, allowing for an increase in savings for retirements or just more monthly cash flow with which to enjoy your retirement. Depending on the home you’re selling and the home you end up buying, you might be able to purchase your new home in cash, eradicating your mortgage payments altogether.

Lower Property Taxes

Property taxes are calculated based on your home’s assessed value and state and local tax rates. In most cases, downsizing your home will result in significantly lower taxes. It’s important to check the tax rate for the neighborhood you’re purchasing your new home to avoid any expensive surprises.

Lower Utility Costs

Utility costs can be expensive, and no one likes paying high utility bills to heat and cool a large house that’s mostly empty. The utility costs of heating and cooling a larger home won’t be an issue when you downsize. Much like with those lower property taxes, a reduction in monthly expenses creates opportunities to save and create wealth.

Lower Maintenance Costs

Barring an unforeseen catastrophe or a streak of bad luck, downsizing lowers maintenance costs considerably. Appliances, HVAC systems, heaters, new carpeting—you name it—cost less to replace in smaller homes. These are certainly not costs you can plan for as easily as mortgage payments, but typically, smaller homes require smaller replacements.

The Power of Compound interest

A $600 reduction in your mortgage payment, utilities, and maintenance costs invested in the stock market at 6% interest would result in $1,790 in 10 years. Those savings might seem small viewed on a monthly basis, but over time, the money you save by downsizing can compound into a nest egg that can drastically change when you can retire or the lifestyle you can live in retirement.

The Best Way to Downsize

If you’re downsizing your home, every dollar that you save can be used to lower your mortgage payment or to build your nest egg for retirement. Selling your current home with Clever is one of the best ways to save when you downsize.

Clever will connect you with a top-rated agent experienced with downsizing who will list your home for a flat fee of $3,000 if it’s less than $350,000 (and just 1% if it’s more expensive). Clever works with agents from every major real estate company.

Your Clever Partner Agent will provide the exact same services they offer their other customers. That includes:

  • Professional home valuation
  • Professional photos
  • Showings
  • Open houses
  • Negotiations
  • Help with inspections
  • Advice on downsizing
  • All of the paperwork needed to get to closing

Fill in your zip code below to get connected to a top-rated agent in your area!

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Downsizing Tips

Understand your budget.

Before you start looking at houses, you should do a deep dive on your financials and speak to a lender if you’re going to be getting a mortgage for your new house. Understanding how the price of your new house will impact your expenses can make it a lot easier to set a target price range that will provide the most benefits to make your downsizing a huge financial success.

Remove clutter.

Before you begin looking for a new house, it’s best to remove all of the clutter in your current house. This will make it easy to figure out what you actually want to keep and what you should give away. It will also give a good indication of how much you can comfortably downsize, given what needs to fit in your new house. There’s no right answer on what’s the best size house to buy when downsizing. It’s just important to buy the best house that fits your needs.

Minimize duplicate items.

If you’re moving into a smaller house, it’s important to remove any unnecessary items that take up space. It’s common to remove extra chairs, tables, rugs, extra dinner sets, and other items that you may have needed in your larger house. It’s always a good idea to start thinking of which duplicate items you are comfortable giving away, so you can plan the best use of your new items.

Host a garage sale.

Once you know which items you don’t want to keep, the best way to get rid of them is to host a garage sale. A garage sale is a fun way to get your house ready for downsizing, all while putting some extra cash in your pocket in the process. It’s best to host a garage sale on Saturday or Sunday morning. Be sure to put signs on the corner of any highly trafficked intersections near your home.

Keep storage space in mind.

As you evaluate potential houses to purchase, keep an eye on how much storage space is available. Can you fit everything you’ll need in the basement, attic, or garage?

Measure your furniture.

While this might not seem important when you’re house-hunting, nothing is worse than hiring movers only to find that your old furniture is too big for your new house. It’s a good idea to measure your couches and tables so you can better visualize them in your new house, without having to physically move them.

Plan ahead.

Downsizing is a big decision, so it’s important to plan the timing of your purchase so you can make sure you’re ready to downsize to avoid any unnecessary stress. The more things you can line up and take care of ahead of time, the more enjoyable the entire process can be.

Make sure you’re comfortable with your new neighborhood.

Before you purchase your new home, take time to walk around your neighborhood during the day and at night. A neighborhood that seems great during the day can be vastly different at night. It’s important that you’re completely comfortable with your new area of town!

Look for multipurpose furniture.

One of the best ways to save space when downsizing is to purchase multipurpose furniture. Your new house might not have as many extra bedrooms as your current house, but by buying a fold-out couch for your living room, you can still have a an extra bedroom when you need it. You can also purchase chairs that work for both indoor and outdoor events. There are plenty of ways to get creative when you downsize!

Don’t be afraid to ask for help.

Downsizing can be a scary process, and sometimes it’s a good idea to talk with an expert who has experience helping hundreds of other homeowners just like you with the process. Working with a top-rated agent who has experience with the downsizing process can be a great way to put your mind at ease when you downsize your home.

Saving with Clever

If you’ve come to the conclusion that downsizing is the right move, we’re here to help!

Check out our calculator to find out exactly how much you’ll save listing with a top-rated, full-service Clever Partner Agent over a traditional real estate agent.

Sell or Buy a Home with Clever and Save Thousands!

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Downsizing Case Studies

The Situation

Mike and Marsha are baby boomers in their 60s. Their children have long been out of the house, they were on the verge of retirement, and they wanted get a small home somewhere warm so they could spend their time playing golf and soaking up the rays.

They had always been conscious of putting money away for retirement, and their home was just another asset they planned to cash-in on once they were ready to retire. However, spending 6% of their hard earned equity and retirement savings on real estate commissions was hard to swallow

The couple wanted to be sure they could live out the retirement of their dreams without the stress of over-spending.

The Solution

Mike and Marsha contacted Clever and got connected to a local agent who helped them list their home for a flat fee of just $3,000.

Their home sold for $350,000. Instead of paying 6% ($21,000) in real estate commissions, the couple paid $3,000 to their agent + 3% to the other agent ($13,500), saving $7,500 in real estate agent commissions.

During this process, Clever connected Mike and Marsha with another Partner Agent on the coast. This agent helped the couple look for properties, gave them numerous virtual tours of houses, and helped them find the home of their dreams.

Because they bought with a Clever Partner Agent, they were able to get a 1% commission rebate on the cost of their new home.


The Result

  • Mike and Marsha retained their equity by using a Clever Partner Agent.
  • They saved on their new home with a home buyer rebate.
  • They increased their retirement savings in the process!

Additional Resources

Looking for more information about the decision to downsize?

We’ve got you covered! Check out these related resources to become an expert in all things downsizing!

a complete guide to helping your aging parents downsizeshould i consider downsizing my home
a complete guide to helping your aging parents downsizeshould i consider downsizing my home
a complete guide to helping your aging parents downsizeshould i consider downsizing my home