Sam Del Rowe at Financial Advisor IQ covered a problem I am seeing more often: clients planning to downsize in retirement discover, at the inspection, that the home they have owned for 30 years needs expensive work before it can sell. The median owner-occupied home is now 42 years old, and repair costs rose 16.7% between 2022 and 2024, well above inflation, with structural repairs up 21.3%.
Most people think selling a home in retirement is straightforward. List it, accept an offer, move somewhere smaller. The reality is that a 40-year-old house carries deferred maintenance the owner stopped noticing years ago, and a buyer's lender will notice. Clients who have not sold in a long time often do not know what repairs might be required before closing.
The number that matters is the net. A plan built on a $350,000 sale can unravel when an inspection turns up $40,000 in structural repairs, a roof at end of life and a furnace that will not pass. The commissions and taxes come out of the same number.
What I told Financial Advisor IQ is that the planning work is simple and has to happen before the listing, not after the inspection. Run the real math on what the client will net. Build in a buffer for repairs based on the age of the home and its major systems. Make sure the retirement plan still holds if the proceeds come in lower than expected. A client who has stress-tested the home sale math can downsize with confidence. A client who has not is one inspection report away from a very different retirement.
Read the full article at Financial Advisor IQ →
