Key takeaways:
- Downsizing in Old Town means selling a property type — rowhouse, greystone, single-family — that draws a specific buyer pool, so pricing and preparation strategy matter more than most sellers expect.
- The capital gains exclusion for a primary residence can significantly reduce your tax exposure, but the rules have conditions your accountant needs to confirm for your specific situation.
- Old Town's condo inventory gives downsizers strong options, but you should ask about reserve balances and any upcoming special assessments before writing an offer on your next place.
- Sequencing the sale and the purchase correctly — and knowing which to do first — is the single biggest logistical decision in a downsizing move.
Downsizing from a family home in Old Town involves three distinct decisions happening at the same time: what your current property is worth and how to position it, what your next home needs to look like, and how to sequence the two transactions so you are not caught owning two properties or none. Getting clear on all three before you list is what separates a smooth transition from a stressful one.
Old Town is a neighborhood where the inventory is layered — vintage greystones, coach houses, rowhouses, and larger single-family homes sit alongside a deep supply of condos and smaller two-flats. That mix works in your favor as a downsizer, because the property you are selling often appeals to a specific buyer profile (families, buyers who want outdoor space, investors), while your next purchase can draw from a wide range of right-sized options close by or in an adjacent Chicago neighborhood.
What follows is a practical roadmap built for Old Town sellers who are ready to make this move.
Understand What You Actually Own Before You List
The first step is getting an accurate, current picture of what your home is worth — not what it sold for ten years ago, and not what a neighbor sold for last spring. Old Town values vary sharply by block, building type, and condition. A greystone with original detail and a finished lower level is a different conversation than a newer construction rowhouse, even if they are the same size on paper.
A comparative market analysis from an agent who actively sells in Old Town will give you a realistic price range based on current comparable sales. Avoid the temptation to back into a number by calculating what you need to net — that approach leads to overpricing, which leads to a listing that sits, which eventually sells for less than it would have with the right price from day one. If you have seen this happen to a neighbor, that article on why listings expire and what needs to change before you relist explains the dynamic clearly.
Beyond market value, you need to know your mortgage payoff (if any), your rough equity position, and how you plan to use those proceeds. That calculation feeds directly into what you can afford on your next purchase.
The Capital Gains Question Every Downsizer Should Ask
If you have owned your Old Town home for a long time and it has appreciated meaningfully, capital gains tax is a real consideration. The federal tax code provides an exclusion for primary residence sellers — a threshold of gain that may be excluded from taxable income for sellers who meet the ownership and use requirements. Whether you qualify, and for how much, depends on your specific filing status, how long you have lived in the home, and other factors your accountant needs to evaluate.
The key things to understand at the planning stage:
- There is a primary residence exclusion available to qualifying sellers, but it has conditions and limits. Do not assume your full gain is excluded without confirming with a tax professional.
- If you have made capital improvements over the years — a kitchen remodel, an addition, a new roof — those costs may increase your cost basis and reduce your taxable gain. Keep documentation of major improvements.
- Illinois also has a state income tax that applies to capital gains. Your accountant should run both federal and state scenarios.
- The timing of your sale within a tax year can matter. If a sale in late December versus early January affects your tax picture, that is worth discussing with your accountant before you list.
Riley Hextell is not a tax advisor, but these are the questions he will flag early in a downsizing conversation so you can get the right answers before you commit to a timeline.
How to Sequence the Sale and the Purchase
This is the question downsizers get wrong most often. The two main approaches each carry real tradeoffs.
- Approach: Sell first, then buy; What it means: You know your exact net proceeds and buy with full clarity on budget; The risk: You may need temporary housing between closing dates
- Approach: Buy first, then sell; What it means: You move once and avoid interim housing; The risk: You carry two properties simultaneously until the old home closes
- Approach: Negotiate a rent-back; What it means: You sell and close, then rent your home from the buyer for a defined period; The risk: Depends on buyer willingness; terms must be negotiated carefully
- Approach: Contingent offer; What it means: You make an offer on your next home contingent on selling this one; The risk: Sellers in competitive situations may not accept a contingency
In Old Town's market, where well-priced properties move quickly, the sell-first approach often makes the most sense for downsizers — especially if you have flexibility on where you land next or are willing to use short-term housing as a bridge. If you are buying in a building or price tier where inventory is steadier, a contingency may be workable.
The right answer depends on your financial position, your timeline, and how the market looks at the moment you are ready to move. This is a conversation worth having with your agent before you make any commitments.
Preparing Your Old Town Home to Sell
Downsizing sellers sometimes underinvest in preparation because they are focused on moving out and moving on. That tendency is worth resisting. Buyers at every price point respond to a home that feels clean, maintained, and move-in ready — and Old Town buyers in particular are often comparing your home against newer construction and well-staged condos.
A preparation checklist for Old Town family homes:
- Declutter aggressively. Years of accumulated furniture, storage, and personal items make rooms look smaller. Removing excess is often the single highest-return preparation step.
- Address deferred maintenance. Old Town's older housing stock sometimes carries small issues — a leaky faucet, a dated HVAC system, older windows — that buyers will flag in inspection. Fixing the obvious items reduces negotiation friction later.
- Consider professional staging. An occupied home that is well-staged photographs and shows better than a lived-in space. The cost is typically modest relative to its impact on perceived value.
- Update your landscaping and front presentation. Old Town buyers walk the neighborhood before they schedule a showing. First impressions at the sidewalk matter.
- Have a pre-listing inspection done if the home is older. Knowing what an inspector will find lets you decide what to repair versus disclose rather than reacting under contract.
Evaluating Your Next Property: Old Town Condos and Smaller Homes
Old Town has a genuine range of right-sized options — one- and two-bedroom condos in vintage buildings, newer construction units with lower maintenance requirements, and smaller attached homes. Each has a different set of considerations.
For condo buyers (and many downsizers land here), there are a few things to clarify before you write an offer:
- Ask the listing agent about the reserve fund balance. A well-funded reserve means the building is prepared for major repairs without special assessments.
- Ask whether there are any upcoming special assessments.
- Ask whether there have been any significant past special assessments, and what they were for.
- Ask whether the listing agent is aware of any known major issues with the building.
Everything else — meeting minutes, bylaws, the 22.1 disclosure, HOA financials — is reviewed after you go under contract, during attorney review. That is the right time to dig into the building's details, not before you make an offer.
If the condo is part of a larger high-rise or association, the monthly assessment amount and what it covers (heat, water, parking, amenities) affects your true cost of ownership. Factor that into your budget comparison alongside property taxes.
Old Town also sits close to Lincoln Park and the Gold Coast, which gives downsizers a broader search radius if inventory in the neighborhood itself is limited at the time they are buying. Knowing what you need versus what would be nice allows you to move quickly when the right unit comes up.
Working with the Right Agent for This Move
A downsizing transaction in Old Town is not a simple sale. It involves selling a more complex property type, navigating a capital gains conversation, sequencing two transactions, and evaluating condo buildings you may not have looked at in years. The agent you work with needs to be capable on both sides of that — as a listing agent and as a buyer's agent — and experienced enough in the Old Town and broader Chicago market to give you real guidance, not just access to the MLS.
For a fuller picture of what separates a strong Chicago agent from an average one, the guide on how to choose the right REALTOR in Chicago covers the questions worth asking.
Riley Hextell ranked #1 at eXp Realty Illinois for total transactions in 2025, placing in the top 50 of more than 80,000 agents companywide. He earned the 2024 Chicago Association of Realtors Rookie of the Year award and has more than 141 five-star Google reviews from clients across Chicago neighborhoods, including Old Town. His background as a U.S. Navy veteran shapes how he approaches client conversations — straightforwardly, with a plan, and without noise.
If you are ready to think through this move, reach out directly: 815-545-7476, [email protected], or rileyhextell.com.
Frequently Asked Questions
Do I have to pay capital gains when I sell my primary home in Chicago?
Potentially, but not necessarily in full. Federal tax law provides a primary residence exclusion that may allow qualifying sellers to exclude a portion of their gain from taxable income. Whether you qualify, and for how much, depends on how long you have owned and lived in the home and your filing status. Illinois also taxes capital gains at the state level. A CPA or tax advisor who handles real estate transactions should run your specific numbers before you commit to a sale timeline.
Should I sell my Old Town home before buying my next place, or buy first?
For most downsizers, selling first is the lower-risk approach because it gives you a clear, confirmed net proceed figure before committing to a purchase. The tradeoff is that you may need a short-term rental or temporary housing as a bridge. Whether selling first makes sense for you depends on your financial cushion, your flexibility on the next purchase, and how the market looks when you are ready. Your agent should walk through both scenarios with you before you decide.
What should I ask about a condo building before making an offer in Old Town?
Before writing an offer, ask the listing agent four things: what is the reserve fund balance, are there any upcoming special assessments, were there significant past special assessments and what were they for, and are there any known major building issues. Everything else — bylaws, meeting minutes, the 22.1 association disclosure, and HOA financials — is reviewed after you are under contract during attorney review.
How do I know if my Old Town home is priced right for today's market?
The only reliable answer comes from a current comparative market analysis based on recently closed sales of similar properties in the same area. Online estimates use algorithms that do not account for condition, recent upgrades, or block-level variation — all of which matter significantly in Old Town. An agent who actively lists and sells in the neighborhood can give you a defensible price range tied to real data.