How Much Cash Can I Get From Downsizing?

Four numbers that sound alike but aren't

• Market value: what a buyer might pay.
• Equity: market value minus what you owe.
• Net proceeds: equity minus selling costs, repairs and concessions.
• Cash remaining: net proceeds minus what you spend on the next home and the move.

Step-by-step example (hypothetical)

Value $1,000,000 − mortgage $150,000 = $850,000 equity.

Minus 6% selling costs ($60,000) and $15,000 in repairs = $775,000 net proceeds.

Buy a $600,000 townhome with 20% down ($120,000) plus ~$12,000 closing and $8,000 moving: about $635,000 stays in cash — but you'd now carry a $480,000 mortgage. Paying all cash would leave about $155,000 and no mortgage.

Ways people keep more cash

• Choosing a lower-priced next home or a different city.
• Financing part of the purchase instead of paying all cash.
• Limiting pre-sale repairs to the ones buyers actually pay for.
• Checking whether a Proposition 19 tax-base transfer could apply.