How Do You Downsize Your Home in New Jersey? A Step-by-Step Plan

Downsizing in New Jersey comes down to five decisions made in the right order: what your home will sell for, what the next home needs, whether you sell or buy first, what the move does to your taxes and property tax relief, and what comes with you. Settle those before anything goes on the market, and the two closings can line up so you move once.

I'm Dennis Mark Interdonato with The Dennis Mark Group. The first thing I usually hear from a homeowner who's ready for a smaller place is "We haven't done this in a while." That's fine. That's my job. Here's the plan I walk people through across Monmouth and Ocean County, with a link to the deeper article for each step.

Where do you start when you're ready for a smaller home?

With the number. Your budget for the next home starts with what this one will sell for, minus what it costs to sell. A website estimate or a neighbor's sale from three years ago isn't a plan. Start with a free home value, and then I walk the house and give you a market evaluation backed by data before you sign anything.

If you've owned the home for a long time, start pulling the paperwork together now: the deed, the latest property tax bill, the mortgage payoff if there is one, permits for past work, and receipts for major improvements. Those receipts matter more than most people expect, and the reason is in the tax section below.

What should the next home have, and what can it do without?

Downsizing means different things to different people. For one homeowner it's everything on one floor. For another it's a smaller lot, a garage instead of a shed, no pool to open every May, or an association that handles the exterior and the snow. Write down what the next home needs and what it doesn't. That list does more for your search than a price range does.

Across Monmouth and Ocean County, the right-sized options include ranch and other single-level homes, condos, townhouses, co-ops, and homes in 55+ communities. Each one is owned and run differently, so read up before you fall for a floor plan:

• Single-level homes: ranch, raised ranch or first-floor primary suite?
• Moving from a house to a condo or townhouse: what changes
• What a 55+ community is and how the rules work

Then I search for it and send you the right homes as they come up. As a former New Jersey home builder and residential remodeler, I'm also reading the roof, the mechanicals and the renovation work on every one, so the upkeep you're leaving behind doesn't follow you.

Should you sell first or buy first?

There's no single right answer. It depends on your equity, your income and how much overlap you're comfortable carrying. Selling first means you know your number and you're never carrying two homes, but you may need a place to stay in between. Buying first means you move once, but you may own two homes for a while, and your lender decides whether that works.

The middle path is lining the sale and the purchase up so they close within days of each other. That's where a plan earns its keep. If you're thinking about an offer that depends on your sale, read how a home sale contingency works in New Jersey.

What does the move mean for your taxes and property tax relief?

Check three things before you choose closing dates:

• Capital gains. If you owned the home and lived in it as your main home for at least 24 months of the 5 years before the sale, you may be able to exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly (IRS Publication 523). New Jersey figures the gain the same way the IRS does. On a home owned for decades, the gain can run past the exclusion, which is why those receipts matter. More in capital gains on a home you've owned for decades.
• The realty transfer fee. New Jersey charges the seller a realty transfer fee when the deed is recorded, with partial exemptions for some sellers (NJ Division of Taxation). See who qualifies and how it's claimed.
• ANCHOR, Senior Freeze and Stay NJ. Each program looks at where you lived and when. ANCHOR, for example, applies only to the qualifying home you owned or rented and lived in on October 1 (NJ Division of Taxation). Here's what happens to each program when you move.

Leaving New Jersey altogether? Read what happens at closing when you sell and move out of state before you sign a listing agreement.

What happens to everything that won't fit?

Measure the next home before you decide what to keep. A sofa that fills a family room can swallow a condo living room. Then sort by room: keep, give, sell, donate or dispose, and put anything promised to a relative in writing. Decide early so moving day isn't a sorting day.

I got a guy for everything, from estate sale companies to clean-out crews, and I'll help you time it around the move. Read what to do with your furniture and belongings for the county drop-off rules.

How do you get the most for the home you're leaving?

You get two game plans from me: sell as-is, or make a few strategic updates first, with what each one should bring. A couple in Beachwood was selling and buying at the same time and chose the updates. They spent under $15,000, the list price came in $30,000 higher than the as-is plan, and they had an offer $45,000 over list on day one: $75,000 more in total. That's one sale, and every home is different, which is why you see both plans before you decide.

Then comes the launch. The first two weeks on the market set the price, so the home goes up ready, at the right number, with the marketing working from day one. On one of my sales in Howell, that meant an accepted offer in 7 days with 6 offers over asking. See how I sell homes and home staging.

How do you line up two closings?

A few dates in New Jersey are fixed. A sales contract prepared by a real estate licensee carries a three-day attorney review period that doesn't count Saturdays, Sundays or legal holidays, and an attorney for either side can disapprove the contract during it (N.J.A.C. 11:5-6.2). If you're financing the next home, your lender has to give you the Closing Disclosure at least three business days before you close (CFPB).

When a closing fell through on the seller's side for clients of mine, I set them up with temporary lodging near their new house. You'll know where you're sleeping on moving day.

Frequently Asked Questions

How long does downsizing take?

It depends on the home, the market and whether you sell or buy first. The fixed pieces are attorney review and the three business days before a financed closing. Everything else we plan together, starting with your number.

Is a 55+ community the only way to downsize?

No. It's one home type among several, alongside ranch homes, condos, townhouses, co-ops and homes on smaller lots. You can browse the adult communities across Ocean and Monmouth County on this site if that's a fit.

Will I owe capital gains tax when I downsize?

Not necessarily. Many sellers who meet the IRS ownership and use tests exclude all of their gain. Long-owned homes are the ones to check, and your tax professional runs the numbers.

What should I do first?

Get your number. Request a free home value, then read the Downsizing Guide.

This is general information, not legal, tax or lending advice. Tax and fee rules come from the IRS, the NJ Division of Taxation, the New Jersey Administrative Code and the CFPB pages linked above, checked October 10, 2026. Talk with your attorney, tax professional and lender about your own situation.

About the author

Dennis Mark Interdonato is a REALTOR® and Master CDRE® who leads The Dennis Mark Group at Keller Williams Realty Ocean Living in Point Pleasant, NJ, helping buyers and sellers throughout New Jersey make their next move, with Monmouth and Ocean County as home base. Read more about Dennis Mark.

Keep reading

• How Dennis Mark plans a downsizing move and the Downsizing Guide
• Selling your home and buying a new one in New Jersey
• Which upgrades add value in New Jersey
• Is downsizing worth it? How to run the numbers
• Have a question this didn't answer? Send it to Dennis Mark and it may become the next article.