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9 Things Almost Every Retiree Gets Wrong When Selling Their Home

A Zillow estimate isn't necessarily a payday.

By Heather Bien , Edited by Calista Headrick

Updated June 8, 2026

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You've been responsibly saving and investing, hoping to fund a comfortable retirement. But you're relying heavily on the largest asset in your portfolio — your home. For many would-be retirees, they've lived in their home for decades, and, as they've watched the Zillow estimate tick upwards year after year, their dreams for their golden years have gotten increasingly luxe.

But the reality is that an estimate is only an estimate. Going in with a clearer picture about your potential earnings from selling your home can help you avoid money mistakes and start planning realistically for retirement. Here are things that too many retirees do in the process, and what you need to know before you put your home on the market.

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Trusting Zillow estimates too much

You've already started searching for your dream beach house thanks to a hefty Zillow estimate. You're feeling confident that the home you bought for $100,000 in 2005 is now worth upwards of $700,000, and that pretty profit is going to serve you well in retirement. Or will it?

It's easy to get carried away looking at the numbers, but off-market home estimates actually have a margin of error of 7.49% on Zillow.

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Forgetting that agent commissions can run up to 6%

While commissions are negotiable, there are numbers that tend to be standard across the industry. Historically, sellers have paid around a 6% commission. That may go down to 4% or 5%, depending on how the deal is negotiated, but if you have a $300,000 home, you should plan on paying up to $18,000 for a 6% commission. Anything less is a bonus.

Overlooking transaction costs

Selling a home doesn't mean taking the money and depositing it straight into your bank account. There are transaction costs involved in the home sale that could chip away at your profit.

On the seller's side, this could include closing costs such as transfer taxes, attorney fees, and any property taxes or utilities that accrued while the home was still in their name. This can have a major impact on your actual net proceeds.

Forgetting that buyers may ask for seller concessions

Looking at the bottom line on your closing costs is bad enough, but the buyer may ask that you pay even more. Depending on what was revealed during the inspection or how the buyer perceives the desirability of the property, they may ask for seller concessions to help cover some of their closing costs.

Selling too close to 63

If you sell to close to age 63, you could trigger a Medicare Income-Related Monthly Adjustment Amount (IRMAA) spike when you hit 65. That's because Medicare looks back two years on tax returns, and that large capital gain from when you were 63 could end up costing you thousands of dollars per year by increasing your premiums.

Assuming a cheaper home means lower monthly costs

A cheaper home in a retirement-focused neighborhood might look like a deal. But it isn't necessarily. You could end up selling your larger, more expensive home, only to find yourself bound to a cheaper home with an unexpectedly high monthly HOA and unexpected special assessments. The tradeoff isn't worth it if your monthly costs actually end up higher.

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Downsizing too aggressively

The idea of downsizing feels invigorating in the moment. You're shedding years of accumulation and starting your next chapter. But retirees can underestimate how much space they actually need and end up realizing that their new place is actually too small.

Maybe you realize you can't have your kids or grandkids visit at the same time or you're confronted with a lack of space for hobbies and activities. Within a few years, you may find yourself looking to sell and buy again, this time for something larger.

Underestimating ongoing storage costs

As you look at your next move, you might think that you can go without the storage you had in your previous home. A basement seems unnecessary. Why would you need an attic? You're getting rid of things, not accumulating them!

But, often, retirees end up finding themselves renting out a storage unit sooner rather than later, and that monthly cost adds to the drain on their fixed income, all for the purpose of keeping some holiday decor or inherited furniture.

Ignoring capital gains thresholds

When you sell your home, you'll pay tax on that profit. But for eligible single filers, you can exclude up to $250,000 in profit, while married filers can exclude up to $500,000. The issue is, for many people, their homes may have appreciated so much over the years that they've far exceeded these numbers (a lucky, but expensive, problem to have).

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Bottom line

If your house is part of your retirement plan, make sure you also have an idea of where you go when you sell the house that's been one of your largest appreciating assets. In an ideal world, you'll probably retire somewhere with a lower cost of living, whether that's on the beach in Florida or in a small town in the mountains.

But carefully consider the cost of living in the place you decide to retire and think about whether it's close to family, friends, and easy access to health care. The best retirement destination blends the practical considerations with the location you've dreamt of.

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