My spouse and I have been looking at downsizing our house, but the transaction costs are steep, and house value is a bit below where we bought (we paid $250k) . We currently have a home over 2500 sq ft, counting finished basement. We have lived in it for 8 years and have no mortgage. It has far more space than we need, and the lot is hard to maintain, but utility bills are low as we've made it more efficient since we moved in, and it has all the modern conveniences we could possibly want. It's a relatively newer house for our area, so it hasn't had any major issues since we bought it. If we put it on the market now (based on analysis by realtor with recent sales in our neighborhood), we might get $225-$240k, but we lose an additional 5% to realtor fees. We are looking at a couple of older, smaller houses on smaller lots at the $150k price point. Advantages would be that property taxes would be cut in half (this is a big deal since we pay $8300 in property taxes each year) and the smaller lot would be easier to maintain. In addition, as interest rates are very low, we have locked in a rate for a 15 year fixed loan (no points) at 2.625%, which would free up some money to invest after we sold our current home. Disadvantages would be that it's risky to get an older home, as the maintenance costs might end up being equal to or higher than at our current newer home. Also, we'd probably end up doing $25-30k worth of work on the home to upgrade old systems and do deferred maintenance on the property. So, is it worth the transaction costs, the hassle of moving, the time spent to fix up the new house, and the risk that our house might not sell quickly in order to have lower property taxes and a smaller house/lot in the long run? My best guess is that we'd end up with $225k after realtor fees on the sale of our current home, and spend $175k on the cost of the new home after upgrades.