6 Ways Retirees Can Make Money From Downsizing Their Homes
Written by
Cynthia Measom
Edited by
Amber Barkley
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Whether it’s maximizing your home’s sale price, selling unwanted furniture or renting out your property, making efforts to downsize for retirement can put you in a better financial position.
Here are some expert-recommended approaches to help you make the most of your assets while letting go of what you no longer need.
Consider Selling Your Home on Facebook Marketplace
Joanne Cleaver, president at Wilson-Taylor Associates, is a baby boomer who made money by downsizing from a 3,500-square-foot suburban home to a 2,400-square-foot retirement community townhouse.
Cleaver said she sold their $725,000 home via Facebook Marketplace, which she estimated saved $25,000 in agent commissions. To learn more about how it works, check out Cleaver’s playbook.
Invest Time in Selling Things That People Want
Cleaver said she first focused on selling furniture that she thought unlikely to fit in their smaller place and next on what was most likely to appeal to today’s young homeowners.
“I put this furniture on the market via home furnishings-specific Facebook Marketplace groups for our metro — in this case, Charlotte,” she said. “The more specific the Marketplace group, the more likely you are to sell your things quickly and for decent money.
“In 2019, when we moved into the Charlotte house, I splurged on a $7,000 Restoration Hardware wall unit — 10 feet long, 8.5 feet high — perfectly scaled for the high ceilings of the house — like most southern houses. In August 2023, in just 36 hours, I sold it via Marketplace for $3,800 — not bad. But we also had some Ikea-type furniture that honestly wasn’t worth the bother. We donated it and took the write-off.”
Cleaver explained that the lesson here is to understand what will actually sell and put your efforts into selling it. She said not to bother trying to sell stuff that won’t appeal to younger homeowners.
Weed Out Stuff That Won’t Sell Well
Cleaver said she weeded through stuff that their kids didn’t want but that they thought their young grandchildren might eventually be interested in. She explained that the wedding silver they received in 1980 is out of favor now, but she has hopes that in 15 years or so, when their eldest granddaughter gets married, it will be back in style.
“Instead of just dumping it, I packed it for long-term storage,” she said. “This saved time by streamlining the number of things I sold.”
This strategy could save you money down the road, too. If you have nice things to gift to your grandchildren — or others — on hand already, you won’t need to buy anything, and the gift will have greater sentimental value.
Choose Wisely When Working With a Real Estate Agent
Cleaver advised steering clear of agents who insist that nothing has changed when it comes to their compensation.
“They are trying to gaslight you and pretend that they are still entitled to the traditional commission,” she explained. “Analyze the cost of handling some of the work of selling yourself and how much time your effort would save a listing agent. With that information, you are equipped to negotiate a lower listing commission, if you decide not to try selling via Marketplace first and keep the entire commission.”
Cleaver said if the listing agent claims that the buyers’ agents won’t consider your home if you don’t offer the traditional commission amount, you should not heed their warning.
“It is unethical, per the rules of the National Association of Realtors, to refuse to show a house to a qualified buyer because the seller doesn’t offer the full traditional commission,” she explained. She recommended reviewing No. 58 of the NAR’s FAQ on the new rules to find out more.
“Fully research the implications of the new house-selling rules, and consider your expanded options carefully,” she explained. “You have a rare chance to save tens of thousands of dollars.”
Rent Out Your Home
Erika Kullberg, founder of Erika.com, attorney and personal finance expert, said just because a retiree decides to downsize, does not mean they have to sell their home.
“By renting out their house instead, while they move into a smaller home, retirees can generate a consistent income that can help supplement their retirement savings or pension or Social Security payments,” she explained.
Open a High-Yield Savings Account
Kullberg said that many retirees are understandably wary about investing their money, because they don’t have as much time to recover from potential losses like younger investors do.
“If they want to grow their cash after selling their home, they can consider keeping it in a high-yield savings account,” she suggested. “These accounts give savers the chance to earn more interest on deposits than a traditional savings account while keeping their cash safe and secure.”
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