10 Most Attractive Places for Older Americans to Sell Their Homes, Maximize Profits and Retire Elsewhere

It definitely pays to own a home before you reach your golden years. About 80% of Americans age 60 and older are homeowners, with home equity accounting for about 48% of their average total wealth, according to a paper published in February 2023. by Vanguard. And tapping into your home equity can provide an attractive path to retirement (Check out the best HELOC rates you can get here) – especially if you go somewhere less expensive. About 60% of expatriate retirees are moving to less expensive places—and typically shedding $100,000 in home equity in the process.

Where you bought your home matters a lot. Retirees who move out of their primary residence on the West Coast (Washington, Oregon and California) are often able to maximize the home equity they have built up, and then retire and relocate. Likewise, retirees in the Northeast (New York, Massachusetts, New Jersey, Maryland and Washington DC) are also in a better position to come out of a home sale with cash in hand, the Vanguard report reveals.

This data shows that if you’re planning to rely on home equity to help fund retirement, where you live now matters. In fact, selling a home and living off the profit is “very viable for coastal residents moving inland in the Midwest,” while it may not be for others, says certified financial planner Derrick Hodges.

The most attractive states for older Americans to sell their home	The average ratio of the home equity withdrawn and the value of the destination home
Washington DC	174%
the air	116%
California	77%
Colorado	73%
Massachusetts	59%
Washington	41%
New Jersey	33%
New York	33%
Oregon	33%
Maryland	30%

Adds Hodges: “Since the pandemic, rents have increased and the cost of buying homes has also increased so many homeowners are downsizing but not saving as much money fundamentally by paying moving expenses and closing costs on selling their home.”

Less attractive states for older Americans to sell their homes to	The average ratio of the home equity withdrawn and the value of the destination home
West Virginia	-48%
Oklahoma	-36%
North Dakota	-33%
South Dakota	-33%
Mississippi	-32%
Arkansas	-31%
Iowa	-29%
Alabama	-27%
Kentucky	-26%
Nebraska	-25%

How to get the maximum value from your home when you sell it

“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 shape when they sell it,” says Jacob Channell, senior economist at LendingTree. For those who have lived in their home for a long time without making any significant changes, it is not uncommon to find yourself in a situation where your home is dated or run down. “You don’t have to renovate your home, but modernizing your kitchen, replacing worn carpet in a high-traffic area of ​​the home, or painting and fixing extreme doors can make a big difference to potential buyers and not only help you. Sell your home fast, but also get a great offer.” ,” says the channel.

Plus, says Holden Lewis, home and mortgage expert at NerdWallet, when you’ve lived in a home for several years, you tend to miss things that bother a buyer, like things that need to be cracked on baseboards or toilet handles. “Ask a neutral person … to walk through the home and identify all the little things that could turn off buyers. Make sure the home’s major systems are working and not in need of replacement. This includes plumbing, roofing, heating and air conditioning, electrical systems and water heaters. “Yes,” says Lewis.

For her part, Claire Trapasso, executive news editor of Realtor.com, says this year’s home buyers are really looking for move-in ready homes with curb appeal that are well located. “Those homes are still selling with multiple offers, sometimes below asking price depending on the market,” says Trapasso.

Essentially, it is important for sellers to put themselves in the buyer’s shoes. “When buyers walk through a home, their first inclination is to start discounting items that the home needs to repair or upgrade. I’m not a believer in replacing items that are ultimately going to replace their own taste, but I encourage my clients to freshen up items that are easily visible to the buyer’s eye. And I advise making sure they’re in. The work order,” says Morgan Trent, a real estate agent with the Aaron Kirman Group at Christie’s International Real Estate.

Before selling their home, experts say retirees should focus on the real estate market for 24 to 36 months before pulling the trigger. “If the market has taught us all one thing over the past few years, it’s that it can be very volatile and the value of many Americans’ most valuable assets can fluctuate dramatically in a matter of months. There are many variables that go into determining overall demand in any one housing market, but sellers You have to understand what you’re doing and the market you’re in,” says Trent.

If you’re set on selling, Lewis says it’s important to consult with tax experts to gain access to accumulated equity because capital gains taxes can be deducted from the sale. “A reverse mortgage is a way to get equity out without selling the home and making monthly payments. A reverse mortgage requires financial counseling and should not be entered into lightly,” Lewis says.

Other options for retirees who want to tap into their home equity include applying for home equity loans or home equity lines of credit (HELOCs), provided they have a good credit score and are not burdened with debt. “Before you rush into one of these, make sure you understand what you’re getting into. Defaulting on a home equity loan can result in losing 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,” Channel says. Check out the best HELOC rates you can get here.