Retirees Who Sold the House Up North Before Moving South Say They Priced the Wrong Half of the Move

When retirees leave Connecticut or New Jersey for Sarasota or Greenville, they tend to weigh property taxes against hurricane season and assume their home equity travels south intact. It doesn’t. Selling costs carve a meaningful slice out of what actually lands in the bank account at closing. The half of the move that too often gets the least attention is what it really costs to get out.

Where Equity Leaks Before It Reaches the South

Commission is the first cost. The National Association of Realtors settlement uncoupled buyer and seller agent commissions, but the national average total commission still runs at 5.7% of the sale price, according to a February 2026 survey of 533 agents by Clever Real Estate. On a $900,000 house, that’s $51,300 gone before the seller touches a dollar.

Concessions are the next drain. Redfin found that 44.7% of U.S. home sales included a seller concession in August, the highest August share since at least 2020, up from 42.6% a year earlier. That trend only intensified through the spring: in May, sellers gave concessions in 46.2% of sales, a record for that month. The concentration is sharpest in the Sun Belt, where markets like Atlanta reached 72.8% and Charlotte hit 67.9%. A seller moving out of a strong northeastern market and into a buyer-friendly Florida or Carolina destination faces that concession pressure on the purchase side, too.

Transfer and recording taxes round out the exit costs, varying widely by state and municipality. Attorney fees apply in states that require a lawyer at closing. Repair bills surfacing after inspection get settled before the wire hits. Layered together, these costs can meaningfully shrink what feels like a large equity cushion. August and September 2026 both came in below a 4 million annualized sales pace, the two slowest months of the year according to NAR chief economist Lawrence Yun, giving buyers added leverage to negotiate every line of the deal.

How a Paid-Off House Still Triggers a Tax Bill

Federal law lets a seller exclude up to $250,000 of gain, or $500,000 for qualifying joint filers, when the home was owned and used as a principal residence for at least 2 years out of the 5 years before the sale. Congress set those limits in 1997 and they have never been adjusted for inflation. Long-time owners in appreciating markets can easily blow past the cap without realizing it.

The taxable gain is the sale price minus selling costs, minus adjusted basis. Adjusted basis is what the house originally cost plus the cost of capital improvements. The mortgage balance is irrelevant to that calculation. Owning the house free and clear tells the IRS nothing about what is taxable.

Consider a couple who bought for $180,000, made $60,000 in documented improvements such as a new roof and kitchen remodel, and sells for $900,000. After commission, their gain is $608,700. Subtract the $500,000 exclusion and $108,700 is taxable. Without receipts to prove those improvements, the taxable amount rises to $168,700. Contracts, permits, and invoices are worth keeping precisely because they turn remodeling history into a lower tax bill decades later.

Selling Into One Market and Buying in Another

Timing the two transactions creates costs regardless of which order they happen in. Selling first means covering short-term rental, storage, and two separate moves. Buying first means carrying two sets of property taxes, insurance, and utilities, plus a possible bridge loan at rates that can run between 8% and 15%.

The two markets move independently, and right now they are moving in opposite directions for many retirees. Cotality data found seven of the ten coolest housing markets in the country were in Florida, with Cape Coral posting a 7.1% year-over-year price decline and Naples down 6.7%. Meanwhile, Boston, New York, and Philadelphia remained strong sellers’ markets. A retiree counting on a specific equity number who watches the destination market weaken against them ends up with less purchasing power than the initial math suggested.

Insurance compounds the gap. Florida’s average homeowners premium reached $8,471 in 2026, nearly three times the national average of $2,872, according to Insurance.com data. Those are statewide averages and coastal properties routinely run higher. A quote on the specific address before signing a purchase contract is the only reliable figure. An estimate based on statewide averages can be off by thousands of dollars a year.

Getting the Real Number Before the Sign Goes Up

The calculation starts with a realistic estimate of net proceeds: sale price minus commission, likely concessions, transfer taxes, prep costs, and repair credits. Subtract the capital gains tax owed, figured on the documented adjusted basis. Then price the southern home on an equally net basis, factoring in an actual insurance quote for that address and a full year of property taxes for that county.

Renting in the destination for six to twelve months eliminates the pressure to close on a purchase before the sale is complete. That one decision can save a retiree from buying at an elevated price in a cooling market under deadline. Retirement income planning, including withdrawal rates and portfolio targets, should be built on that final net figure. The arithmetic is only as reliable as the number it starts from.

The document to request before listing is the agent’s net sheet. It converts a vague sense of equity into a line-by-line estimate of what the seller actually walks away with after every cost, and that number, not the Zillow estimate, is the one that finances a retirement plan.

Editor’s note: This article updates the Florida homeowners insurance figures to Insurance.com’s confirmed 2026 averages ($8,471 for Florida and $2,872 nationally) and refreshes the existing-home sales context to reflect that August and September 2026 were the two slowest months of the year per NAR data; seller concession figures have also been updated to include May 2026’s record 46.2% rate and Sun Belt metro breakdowns from Redfin.

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