What am I Forgetting?
Buying and selling real estate can have lots of unforeseen costs. If you close the deal on your new place but have trouble selling your house, you could up in the awkward position of paying two mortgages until you get a buyer. That can put a serious dent in your downsizing profits.
There's also the option of renting your house out until it sells. In that case, you'll have maintenance expenses along with any hassle that comes with being a landlord. (But at least you won't have two mortgages.)
Other surprise expenses can include a decorator for your new, smaller space; any repairs or updates to make your new house suitable for you; homeowners' association fees; any expenses related to selling or giving away the stuff you don't have room for; and a storage unit for the pieces you couldn't part with.
If it turns out that downsizing will in fact be profitable for you, both financially and lifestyle-wise, the next consideration is what you'll do with the money you save so you can achieve your long-term downsizing goals.