"Selling an $850,000 home carries transaction costs that most sellers underestimate until they see the closing statement. Realtor commissions, transfer taxes, attorney fees, and seller concessions typically run between 5% and 8% of the sale price."
"Buying the $475,000 retirement townhouse adds another layer of costs that are easy to overlook when the focus is on the purchase price itself. Closing costs typically run 2% to 3% of the purchase price, adding approximately $11,000 to the transition tab."
"Many 55-plus communities also charge an initiation fee at closing, typically between 2-3 months of HOA dues, which can add another $2,000 to $3,500, depending on the community's monthly assessment."
Downsizing from an $850,000 home to a $475,000 townhouse involves substantial transaction costs that many sellers underestimate. Selling costs can range from $42,500 to $68,000, while purchasing a new home adds additional expenses, including closing costs and initiation fees. Despite these costs, the financial outcome for a couple making this move can still be positive, but the misconception that downsizing is a straightforward financial win can lead to unexpected financial strain.
Read at 24/7 Wall St.
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