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What are the potential downsides to downsizing to a cheaper home and investing the remaining profit?

Selling your current home can take an average of 60-90 days, which can lead to temporary financial instability while you're waiting to purchase a new property.

You may face significant taxes on the equity extracted from your old home, which can eat into your profit margins.

Closing costs, agent commissions, and home improvement expenses can cost up to 10% of your home's sale price, reducing the amount you can invest.

Selling a home "as-is" can result in significantly lower offers from investors or iBuyers, potentially losing tens of thousands of dollars.

When you sell your home, the IRS allows a home sale exclusion, which can help minimize or avoid capital gains taxes.

Using the "like-kind" exchange process, you can lower your tax burden when selling an investment property.

Self-sabotaging behaviors, such as leaving pets at home during showings, can reduce the chances of selling your home quickly.

For Sale By Owner (FSBO) listings can save you 5-6% of the home sale price on agent commissions, but you'll need to handle all the paperwork and negotiations yourself.

Calculating your home equity involves subtracting the amount you still owe on your mortgage from the current value of your home.

You may not pocket the full amount of your home equity after selling, as you'll need to pay agent commissions, closing costs, and other expenses.

Negotiating the timeline of your home sale and purchase can be crucial in avoiding costly overlaps or gaps in your living arrangements.

Selling your home first gives you the luxury of time to find the right buyer and negotiate the best price without the pressure of already having bought a new home.

Making a stronger purchase offer can be achieved by selling your home first and eliminating contingencies.

You can expect to spend 5-6% of your home's sale price on agent commissions, and an additional 2-4% on seller fees.

If you decide to buy a house with cash, consolidating your funds into a centralized place can help facilitate a smoother transaction.

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