10 Most Profitable Places Where Older Americans Can Sell Their Homes, Maximize Profit, and Retire Elsewhere

It certainly pays to own a home before you reach your golden years. About 80% of Americans age 60 and older are homeowners, with real estate wealth accounting for approximately 48% of their average net worth, according to a February 2023 article published by Vanguard. And tapping into your home’s equity could provide a lucrative path to retirement (see the best HELOC rates you can get right now here) — especially if you move to a less expensive location. About 60% of migrant retirees are moving to less expensive places — and typically extracting $100,000 of equity in the process.

Where you bought your home matters a lot. Retirees moving out of their primary residence on the West Coast (Washington, Oregon, and California) are more likely to maximize the home value they have accumulated and then retire and move out. Likewise, retirees in the Northeast (New York, Massachusetts, New Jersey, Maryland and Washington DC) are also well positioned to walk away from a home sale with cash in hand, reveals the Vanguard report.

This data shows that if you plan on relying on equity to help fund retirement, where you live now matters. Indeed, selling a home and living off the proceeds “is very doable for coastal dwellers moving inland to the Midwest,” though it may not be for others, says certified financial planner Derieck Hodges.

Hodges adds: “Since the pandemic, rents have gone up and home values ​​to buy have gone up too, so many homeowners end up downsizing their space but not radically saving as much money after paying moving expenses and closing costs on sale. from your home. ”

How to get the most value out of your home on sale

“One of the best things a retiree can do to get the most value out of their home is to make sure it’s in good condition when they sell it,” says Jacob Channel, senior economist at LendingTree. For those who have lived in their home for a long time without making any significant changes, it’s not uncommon to find themselves in a situation where their home looks dated or run down. “You don’t need to renovate your home, but upgrading your kitchen, replacing worn out carpet in a high-traffic part of the house, or even painting and fixing squeaky doors can make a big difference to potential buyers and not just help you. sell your home faster, but also get a higher offer,” says Channel.

Plus, Holden Lewis, real estate and mortgage expert at NerdWallet, says that when you’ve lived in a home for many years, you stop noticing the things that would annoy a buyer, like scratches on baseboards or bathroom handles that have to be shaken. “Ask a neutral person … to go through the house and identify all the little things that might put buyers off. Make sure the main systems in the house are working and don’t need to be replaced. This includes plumbing, roofing, heating and air conditioning, electrical and water heater,” says Lewis.

For her part, Clare Trapasso, executive news editor for Realtor.com, says this year’s homebuyers are really looking for move-in ready homes with curb appeal and well located. “These homes are still being sold with multiple offers, sometimes above the asking price, depending on the market,” says Trapasso.

Essentially, it’s important for sellers to put themselves in the buyer’s shoes. “When buyers pass by a home, their first inclination is to start discounting the home for items that need repair or updating. I don’t believe in replacing items to sell them to someone who will replace them at their own discretion, but I advise my clients to ensure that items that are readily apparent to the buyer are new and in good condition. working perfectly,” says real estate agent Morgan Trent of the Aaron Kirman Group of Christie’s International Real Estate.

Before selling their home, experts say retirees should keep an eye on the housing market for up to 24 to 36 months before pulling the trigger. “If the market has taught us anything over the last couple of years, it’s that it can be very volatile and the value of many Americans’ most valuable asset can fluctuate wildly in a matter of months. While there are a number of variables that make up overall demand in any real estate market, it is imperative that sellers do their homework and understand the market they are located in,” says Trent.

If you’re set on selling, Lewis says it’s imperative to consult tax experts to gain access to accumulated equity, because capital gains taxes can hurt the sale. “A reverse mortgage is a way to extract equity without selling the house and without making monthly payments. Reverse mortgages require financial advice and should not be taken lightly,” says Lewis.

Other options for retirees looking to leverage their net worth include applying for home equity loans or home equity lines of credit (HELOCs), assuming they have good credit scores and aren’t saddled with debt. “Before you rush into one of these, make sure you understand what you’re getting into. Defaulting on a home loan can result in the loss of your home, and a reverse mortgage can make it extremely difficult for you to pass your home on to your children or other members of your family,” says Channel. See the best HELOC rates you can get here.