Opinion: Should this couple take advantage of a hot sellers’ market in real estate to cash in before retirement? The answer isn’t straightforward

I am hoping you can provide advice about the type of professional my wife and I should consult with over whether to sell our home. We’re in a hot sellers’ market and are considering downsizing to an apartment for three years until we move south or stay put.

I say sell, get a good price for the home and use some of the equity to cover a more expensive apartment than our current home’s monthly costs, while avoiding concessions commonly found in a buyers’ market. My wife is afraid it will cost more to live in an apartment, thinks the housing market might improve even more, and we simply won’t concede to concessions in a buyers’ market.

I feel like we are missing out big and this will be a costly mistake.

So who can I work with (for a fee) to collect and analyze the data to help us see the better decision on this?

Hot to Sell

Dear Hot to Sell:

This isn’t a simple real estate decision. This is a retirement question.

There is more at stake than the financial transaction as you navigate the next stage of life. This is the beginning of a big lifestyle change. You need to be on the same page.

Talking about options is productive. Understand your wife’s reasons for not wanting to sell, which may go beyond the financial. Create a plan that excites you both. Remember, sometimes keeping the home you know and are comfortable in, helps you navigate other changes.

Opinion: Want a better relationship? Talking about money will help

Taking on too many changes often backfired for clients I’ve worked with. There was too much upheaval. So even though there’s a sellers’ market, there are many more moving pieces. Plus, rental prices have skyrocketed.

Send your questions to Ms. MoneyPeace: [email protected]

One couple sold their home and purchased two others — a smaller home and a winter home — within a short period amid retirement. The problem was not financial. Their first year of retirement was overwhelming, so much so that she was drained emotionally, which led to medical problems.

Moving is a costly transition that people forget to plan for. Moving twice is doubly expensive. Without good planning, hidden costs may offset the savings of leaving the home.  

My advice to you and your wife is:

1. Explore places to retire. The suggestion in your second email to me — that it would either be South Carolina or Florida — is still too vague and not a plan at all. Try vacationing over the next year or two in towns you may want to retire in. Talk to your friends or others who have moved in retirement. 

Check out MarketWatch’s Retirement Tool:  Where should I retire?

2. Hire a financial professional who charges hourly to help you create a full retirement plan. All pre-retirees need to sit and plan out retirement years before retirement. This is not a one-and-done conversation. I recommend starting with a certified financial planner. He or she can recommend a certified public accountant (CPA) if you need specialized tax information.

3. Understand your financial needs in retirement. Are you truly prepared for retirement? Do you know what you need to spend? Part of that answer is in where you are going to live, but also based on the lifestyle you choose to live.

CD Moriarty, CFP, is a Vermont-based financial speaker, writer and coach who aims to create financial peace of mind for others. You can send her your financial questions at her website.