As your kids grow up and move on to their adult lives, you realize you'll soon have a much larger house than you and your spouse need.

Do you sell the property and walk away from what you consider an idyllic suburban setting -- letting go of neighborhood friends and happy memories? And if you sell, what sort of place do you buy and how much do you spend?

These questions are extremely difficult for parents who've spent years absorbed in raising their offspring -- with very little thought to their own future housing plans, says Eric Tyson, author of "Personal Finance for Dummies" and several real estate books.

"It's tough to transplant yourself," says Tyson, a former financial adviser.

He says pre-retirement years are a good time for empty nesters to take stock of their housing needs and overall financial situation, though many people fail to seize that opportunity.

Cary Carbonaro, a financial planner since 1990, says it's rare for those in her profession to help clients assess their housing choices.

"Whether to sell your family home or stay is a very personal decision. As advisers, we can't tell clients what to do. But we can help them sort out the financial implications of their alternatives," says Carbonaro, who's affiliated with the National Association of Personal Financial Advisors.

Here are a few pointers for empty nesters:

-- Look at both the pros and cons of selling your present property.

As Carbonaro notes, some parents of grown children look forward to downscaling to a smaller place with fewer maintenance demands.

"The idea of a less complicated lifestyle can be appealing," she says.

Yet others yearn to take over their kids' old rooms in ways that would be enjoyable to them.

"They transform the extra bedrooms into hobby rooms, for crafts, exercise or home offices," she says.

Others count on hosting frequent family gatherings. But many will find the expense of keeping such a large house unjustified.

"Do you really want to pay for all that space, including your taxes and utility costs, just so you can entertain your kids for a week or two each year? Probably, it would be less expensive to put them up in a nearby hotel for those few days," Tyson says.

-- Ask for professional advice to help make a solid decision.

By going through a professional group, such as NAPFA (www.napfa.org), you should be able to locate a planner to hire for just the few hours it takes to talk through your housing options.

Another course that Tyson recommends involves seeking advice from a certified public accountant trained as a "personal financial specialist" (PFS). The American Institute of CPAs awards this designation. You can locate a PFS in your area by visiting the organization's website: www.aicpa.org.

-- Include retirement planning in your housing analysis.

If you lack funds for retirement but have substantial equity in your property, selling the big family home could open the way for investments that are potentially more lucrative.

Tyson says "many people romanticize about living somewhere cheaper and simpler." But he cautions there can be many hidden costs associated with selling one home and moving to a distant state to buy another smaller place.

"There are always financial trade-offs involved. Maybe you'll spend less to buy a house in the new area and your taxes will be lower. But remember there are likely to be many expenses to fix up your house for sale, to move and to buy the new place," he says.

Also, he recommends you factor in how living in a remote area -- away from a major airline hub -- might increase your travel costs and those of grown offspring who wish to visit.

-- Research your college financing options.

It's not an ideal time to reformulate your college financing plans after your children have already started classes or are about to do so. But Tyson says it's still not too late to try to make up for lost time.

Unfortunately, most people don't plan ahead for college financing, according to Tyson.

"They view college costs in isolation rather than as part of a holistic financial plan that integrates all the parts," he says.

Have you promised to contribute toward your children's college expenses with proceeds from the sale of your home? If so, Tyson cautions that doing this could put in jeopardy any need-based scholarship or grant money for which your offspring are eligible.

"While that equity is still in your house, many college financial aid offices won't expect you to tap it for tuition and fees. But if you sell the house and free up capital while your kids are in school, all that could change," he says.

Maybe you'll want to meet with financial aid officers at your children's colleges to discuss whether your kids might bear some of the expense through student loans or by enrolling in work-study programs.

"It sounds selfish, but as you approach retirement, you've got to think about yourself and your own financial needs going forward," Tyson says.

-- Give yourself ample time to make the right housing choices.

"Having your kids grow up and move away raises all sorts of emotional issues for a lot of people. So they avoid making hard choices about what to do next," Tyson says.

He advocates that empty nesters try to conceive their post-retirement housing plans at least five to 10 years before they stop working.

"Most people don't think very much about whether to stay or sell their big family house before taking action. But you need plenty of lead time and loads of information to make the right decisions," Tyson says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

It's a scenario that still happens, despite the sobering realities of the real estate market in recent years. A lender tells homebuyers they're entitled to borrow more than they expected. Good news? Not necessarily.

Keith Gumbinger, a vice president with HSH Associates, a mortgage-publishing firm, says that even now, with stringent lending standards, some homebuyers can borrow more than is prudent.

Sean Sebold, a veteran financial planner, says, "There are lots of reasons to be conservative on how much you spend for a house. One factor is that if you overbuy and can't afford it, you'll be hit with major transaction costs to sell your home and buy a smaller one."

Among the homebuyers who should be especially careful not to overspend are people who are single and couples supporting a household on just one income, he says.

How is it possible to borrow more than you should for a home purchase?

The explanation is that lenders don't know everything about their borrowers' living costs. For example, homebuyers seeking a mortgage needn't disclose that they face high costs for their toddlers' day care or that they're helping cover a mother's nursing home bills.

"The lender is blind to everything but the income and liabilities on your record," says Sebold, who's affiliated with the National Association of Personal Financial Advisors.

"The problem is most people don't actually reduce their spending the way they expected to after moving to their new house. They keep spending as much as ever on restaurant meals, travel and expensive hobbies," he says.

Why do homebuyers continue to spend more than planned -- even after taking on a big mortgage? Sebold believes most Americans are inherently optimistic about their finances.

"Despite the current economy, the majority of people think they'll be making more money in the future," he says.

Here are a few pointers for homebuyers:

-- Watch out for mortgage brokers who push hard for business.

In the aftermath of the country's mortgage debacle, the home-loan industry has gone through a major restructuring process. One result has been tighter regulation of mortgage-lending practices. Another has been a dramatic decline in the number of mortgage brokers --intermediaries who originate loans for banks and other lending institutions.

Although there are fewer people working in mortgage lending, those still in the field are now competing as aggressively as ever for loans, Gumbinger says, and many work on commission, meaning they don't get paid unless their deals go through.

Do lenders want homebuyers to borrow more than they should relative to their financial situation? Generally not, says Gumbinger, but neither are they driven to dissuade borrowers from doing so.

"It's not the mortgage lender's responsibility to protect you from you," he says.

-- Get a grip on your finances prior to taking out a mortgage.

Sebold suggests that before looking at property, you do a careful analysis of your income and expenses to ensure you'll have adequate funds to cover your housing and lifestyle costs.

Because reducing your expenses could be even harder than reducing your weight, Sebold advises that the best way to determine how much you can afford for housing is to analyze your spending over a recent three-month period. Then assume you'll spend as much or more after you buy a home, adding in extra costs for the property, such as hardware and lawn supplies.

In fact, Sebold encourages renters to simulate what they would confront if they faced higher housing costs each month.

"Suppose you're now paying $1,500 a month for rent but plan to spend $2,500 for a house payment. While still living in your apartment, put an extra $1,000 a month in a savings account and see if you can live on the rest of your income," he says.

-- Set an upper limit on how much you'll spend for a home.

Are you working in a field with high levels of unemployment? If so, Sebold says you should keep regular contributions to savings in mind when calculating how much you can afford to put into housing.

"If you're working in an insecure job, you'd better have a year's worth of living costs set aside if you're in a one-income household," he says.

Even if you have two incomes, and believe your jobs are secure, Sebold says you'll want to add in a financial buffer when calculating what you can afford for housing.

After gaining mortgage pre-approval, he urges you to set a firm upper limit on how much you'll spend before heading out to look at property. Put this number on an index card and carry it in your pocket when you're searching for the right home, he says.

"You should always know that number before going out to buy," he says.

-- Don't let the vision of the perfect property for your kids sway you.

Sebold says many parents of young children fantasize about the ideal place for them to grow up -- with many bedrooms, a huge family room and a large, fenced yard where the kids can frolic along with the family pets. This is a fine vision if you can afford it. But he cautions that such an ideal has the potential to cause some parents to overspend, with good intentions but unfortunate results.

Sebold says that staying within your budgetary limits is ultimately in the best interest of everyone in the family, including the kids.

"You don't want your children to have the perfect house when they're very young only to have it taken away before they reach their teens," he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Each year, home values are increasingly subject to neighborhood-by-neighborhood variations, says Richard M. Betts, an expert on real estate economics.

"Some neighborhoods are now hotter than hell and some are still dead," says Betts, who has followed real estate pricing trends for 45 years.

In many communities with excellent public schools, multiple bids over the asking price have become a reality lately. That's because school quality now varies more widely than in the past, and prospective buyers are acutely aware of distinctions due to the ease of obtaining test scores online or through newspaper coverage.

Meanwhile some neighborhoods in remote suburban areas continue to suffer valuation declines. That's because the public is increasingly fearful that gas prices could spike at the pump.

"People worry their commuting costs might soar if they live too far out," Betts says.

Even within the same neighborhood, there are now striking variations in home values based on the relative location and characteristics of properties. For instance, a house on a quiet cul-de-sac could be worth considerably more than a similar one on a busy road in the same community.

Of course, home values have always varied in accord with the specific location and attributes of properties. But Betts says that in the present period those disparities are even more pronounced.

"Since the 2007-2008 economic downturn, value influences have become more intensely local," he says.

Fred Meyer, a veteran real estate broker who's also an appraiser, says the increasingly fine distinctions in property values are due in large measure to the painstaking approach most homebuyers are taking to property selection.

"During the boom times, people were less picky. They figured they could buy any house or condo and its value would automatically rise. Now they're aware this is no longer true, so they're much more cautious," Meyer says.

The increasing variability of home valuations makes it all the more difficult for owners to decide how to mark their properties for sale, especially if they're trying to sell a home in a neighborhood of custom houses.

"Every home is unique -- it's just a matter of how unique," says Betts, who heads his own real estate appraisal firm.

Here are a few pointers for home sellers:

-- Search for a listing agent with a deep knowledge of your area.

When searching for listing agents capable of recommending an accurate price for your property, stick to those who specialize your neighborhood, Betts says.

"Drive the streets and look for for-sale signs. That's one way to find out who's actively working the area within your same zip code," Betts says.

He says you should disabuse yourself of the notion that someone one who scores a high volume of sales in your area will necessarily devote enough time and energy to evaluating your property to make the best possible pricing recommendation.

"Those so-called 'top producers' usually have a lot of assistants working for them. This often means they're spreading themselves thin over a large area. You could wind up working with an assistant who isn't so knowledgeable," Betts says.

-- Seek a minimum of three opinions on the worth of your home.

Much is at stake for homeowners when they decide to place a price tag on their property, Betts says.

A price that's even 10 percent more than what the market will bear is usually a big mistake, he says -- a home that's overpriced from the get-go will be shunned by buyers. In the end, this almost inevitably leads to a later sale and less money for the sellers.

In seeking the correct price for your property, Betts recommends you consult at least three potential listing agents before selecting the ideal one to assist you.

"Don't necessarily choose the agent who recommends the highest price. Remember it's the market, not the agent, that decides the true value of your home," he says.

Betts says home sellers should be aware that some agents will seek to flatter you by recommending a higher list price.

"Some agents use this as a strategy to get more listings ... knowing (the price) will have to be cut later to move the property. This isn't in keeping with your interest as a seller," Betts says.

-- Review the data used by agents to come up with their pricing proposals.

Before making a pricing recommendation, a conscientious listing agent will consider data on recent home sales for comparable properties.

"Which 'comps' the agent picks is critical. You don't want the agent to just use any three properties from your general area. Now that values are so variable neighborhood by neighborhood, the agent should choose comps in your immediate vicinity that are truly very similar," Betts says.

He says it's always wise for agents to examine more information than they will use to produce their opinion of value about a property, known within the real estate profession as a "Comparative Market Analysis," or CMA.

"An agent should examine six or eight comps before choosing the three right ones and then adjusting them for fine distinctions," Betts says.

-- Raise your antenna on how rivals in your market have priced.

Sellers tend to be biased in the belief that their place is better others, and therefore deserves a loftier price. Their emotional attachment to their home fogs their vision.

To better assess the relative value of your property before pricing, Meyer recommends you visit your competition -- homes already on the market in your immediate neighborhood. You can do this by attending public open houses or asking your agent to bring you through.

"It's imperative you become familiar with the other choices buyers have available to them and for what price. If you've been unrealistic in your thinking, this could be a sobering experience. You might find that other houses are much better kept than your house and that your neighbors have made a lot more improvements," he says.

In the course of checking out your rivals, you could discover that a very similar house has been marked down to what your agent considers a sacrificial price in order to get it sold quickly, perhaps due to a divorce or a threatened foreclosure.

After making such a discovery, Meyer says many sellers are tempted to match the underpriced property so as to remain competitive. But he says the better option -- if you're not on a tight moving schedule -- is to simply delay.

"Assuming you and your agent have done your homework and know for sure that the other house is priced below market, I recommend you just wait until the other property goes before you try to sell," Meyer says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)