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Tips for Trading on Up

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | October 2nd, 2013

Americans have been on a home-improvement binge for years. But at some point, many homeowners realize their aspirations can't be met through remodeling alone. That's when they start thinking seriously about buying a better property.

What spurs move-up buyers to action? Often, it's a job promotion, a growing family or the quest for better schools. Lately, it could also be the belief that if they don't act soon, home values might rise to the point that they can no longer afford to move up.

"At some point, people just say, 'Let's go ahead and take the plunge,'" says Ashley Richardson, a long-time real estate agent affiliated with the Council of Residential Specialists (www.crs.com).

She tells the true story of a couple of 33-year-old buyers who, until recently, were living comfortably with their 2-year-old son in a tiny Cape Cod with a dining room so small it could barely fit a table. Word that the wife was pregnant with twins sent them house-hunting.

After much discussion, they sold the house they bought in 2006, accepting the reality that it had gained little value since then, and found a colonial triple its size in a nearby neighborhood.

And it's not just people with growing families who are moving up. Richardson also cites an older group she calls "house tweakers" who make a hobby of home improvement.

"As soon as they make one house absolutely perfect, they feel compelled to find another house they can remodel," she says.

One common denominator to all trade-up buyers is the quest for upward mobility that Richardson believes is embedded in American culture.

Here are pointers for move-up buyers:

-- Let go emotionally of your current property.

Surprisingly, many people who want to sell their property in favor of a better one have a tough time letting go of their current domain, says Sid Davis, the author of several real estate books.

"Subconsciously, many sellers think they're entitled to a higher-than-market price because they love their house and think it's better than any other place for miles around," says Davis, a veteran real estate broker.

"Get greedy and you'll hurt your plans for moving any time soon," Davis says.

How can you loosen emotional ties to your current property so as to sell it properly?

Davis recommends that before setting your list price, you do a brief tour of the properties available in your price range in the area where you wish to live.

"Looking around at other options can flip the switch in your brain and cause you to get excited about buying that better house. This should help you on the selling end," he says.

-- Never ignore resale potential when buying a home.

If you're trading up to a better property for the second or third time, you may assume your next buy will be your last -- what real estate people call a "forever house." But statistics show that many owners sell sooner than expected, says Dorcas Helfant, a former president of the National Association of Realtors (www.realtor.org).

Regardless of how long you stay, you'll want a place that not only holds its value but appreciates. That's why it's wise to look for features that will gain in value over time, such as those that help keep utility bills to a minimum.

Helfant says one good bet is to look for energy savers, including extra attic insulation, double-paned windows and high-efficiency appliances. In addition, look for an open floor plan that should retain its popularity over time.

"Buyers don't like chopped up floor plans with a lot of small, self-contained rooms. They like a kitchen that flows directly into a large 'great room,'" she says.

-- Don't rule out a brand-new home.

As always, real-estate markets vary in strength, fluctuating through the seasons and economic cycles. But Davis says one constant is that better deals, on a per- square-foot basis, are typically found in upper-range subdivisions.

"Some areas now have a shortage of new housing at all levels, while others have an excess of new properties at the top. Builders with big construction loans are always eager to sell so they can repay their debts," he says.

-- Consider the purchase of an "over-improved" property.

The recent surge in home-improvement activity prompted some homeowners to go to extremes, making their properties fancier than their neighbors'. For example, they might have added exotic wood kitchen cabinets in an area without upscale kitchens. Or perhaps they've built on a fifth or sixth bedroom in a community of three- or four-bedroom houses.

When they first set their list price, the owners of an over-improved home may ask too much, on the hope they'll recoup every dime they spent on remodeling. But if they've outdone the local market, their home will typically sit unsold for a lengthy period, says Michael Crowley, a broker and former president of the National Association of Exclusive Buyer Agents (www.naeba.org).

Once a major price cut is taken, however, the over-improved home can become a genuine bargain, Crowley says.

"The key here is to be sure your agent is tracking the home and can tell you the minute a big price reduction occurs. At that point you might catch a wonderful buying opportunity," he says.

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

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Searching for That Big Family Home

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 25th, 2013

They were a newly blended family with a grand total of seven kids, four from his first marriage and three from hers. After the wedding, they headed out to hunt for a house spacious enough to hold them all.

"They knew it would be really tough for everybody to learn to live together under the same roof. So they searched for as much space as they could afford while still insisting on a neighborhood with good schools," says Sid Davis, the family's real estate broker.

In most parts of the country, families are no bigger than a decade ago. But in some areas -- such as Utah, where Davis owns an independent real estate firm -- many families are larger than the national average.

Davis, author of "A Survival Guide for Buying a Home," says his clients often face challenging trade-offs when selecting a property to house all their kids.

"Very few big families can afford everything they need and want in a house," Davis says.

The parents in the seven-kid family talked for hours about their priorities. In the end, they agreed that having enough bathrooms was their top goal, followed closely by enough bedrooms.

"If absolutely necessary, kids can double-bunk in bedrooms. But having people wait in line for a bathroom causes lots of friction in a household," Davis says.

After a lengthy search, the family found a sprawling one-level house with 3,600 square feet of living space, three bathrooms and six bedrooms.

"To get that big a house, they had to give up plans for an extra-large yard, as well as a formal dining room. But they refused to give up a good school system," Davis says.

Are you a home-buying family with lots of kids? If so, these pointers could prove helpful:

-- Don't judge neighborhood schools solely on test scores.

Few large families have the means to pursue a private- school education for their offspring. That's why finding the best available public schools is a key element in housing selection.

"Schools are a very big deal for families," says Dorcas Helfant, a real estate broker and former president of the National Association of Realtors (www.realtor.org).

Though it's easy to compare schools on the basis of standardized test scores, which can typically be found online, Helfant urges parents to visit neighborhood schools before judging them.

"The quality of instruction and the atmosphere matter even more than test scores. To learn more about the intangibles, talk to teachers and administrators." She also suggests talking to local residents about the schools.

-- Consider reducing your expectations on yard size.

Helfant says some parents, nostalgic about the capacious yards of their childhoods, automatically think their kids need the same sort of setting to thrive. But she suggests they rethink that notion.

"Kids today have an awful lot of structured time. They go to sports, dance, judo and piano lessons. There's not a lot of time left over for free play in the backyard," Helfant says.

She believes neighborhoods where yards are relatively small can be friendlier than those with much bigger lots, especially if the houses have front porches and sidewalks that encourage interaction.

-- Select a floor plan that serves your family's lifestyle.

When homebuyers think of a formal dining room, they think of Thanksgiving and other rare times when relatives gather for a feast. But Davis says for most large families, it's more important to find a house with ample space for casual living.

"If you have to make trade-offs, and most people do, let go of both a formal dining room and living room. Instead, shop for that eat-in country kitchen that flows directly into a large family room," he says.

For time-starved families with working parents, the advantage of this combination space is that it encourages family members to spend time together, while the parents are cooking and the kids are doing homework or playing games on the computer.

-- Seek a property with as many bedrooms as you can afford.

Second only to plenty of bathrooms, current homebuyers with kids want as many bedrooms as they can afford, and builders are now acknowledging this wish in their floor plans, Helfant says.

Children naturally prefer their own bedrooms. But if necessary, Helfant says that most kids will either wedge themselves into a small room or agree to share a room. Still, it's wise to make sure that parents have a spacious suite of their own with a private bathroom.

"In big families, parents need a private retreat --particularly once their children become teenagers. It's only good design for parents to have their own space," Helfant says.

-- Don't rule out a house with two or more stories.

Many contemporary homebuyers seek a one-level home. Middle-aged buyers with increasingly arthritic knees dislike stairs. And many seniors have ailments that make it hard, if not impossible, to climb stairs.

Even so, Helfant says it's sensible for big families with young children to consider the advantages of living on two levels. That's because it's easier to contain the noise and mess generated by the kids if their bedrooms are separated from the family's common areas.

With a two-story house, parents can entertain guests on the first floor while the kids sleep on the second floor.

"The reality is that lots of folks like to send their kids to bed upstairs so they can enjoy a little solace at the end of a long day," Helfant says.

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

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Don't Let Your Home Languish on the Market

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 18th, 2013

It can happen in a cool real estate market or a boiling one. Curiously, a good-looking house in a nice neighborhood languishes unsold for what seems to its exasperated owners as an endless length of time.

What's wrong? Perhaps obvious repairs have gone undone or the decor needs updating. Maybe the sellers have failed to weed through their clutter, leaving the place unappealingly crowded. Or it could be that the list price is too high for the neighborhood, the most common explanation.

When should the owners start to worry that their home has become shopworn? As a rule of thumb, Brandi Pearl Thompson, a real estate broker affiliated with the Council of Residential Specialists (www.crs.com), says you should think seriously about a substantial price cut if you've had 10 showings but not a single offer.

She says sellers who enter the market with an overly high list price typically hurt themselves in the long run.

"If your house has been sitting and you take a price cut late in the game, buyers believe you're desperate. They think something is seriously wrong with your house," she says.

Thompson says some sellers operate on the mistaken belief that it's a good idea to "push" the opening list price to test the market. And she says some listing agents go along.

But as she notes, it's the market that determines property values; wishful thinking makes no difference.

Along with off-target pricing, other factors -- including poor photography -- can seriously affect selling time, according to Thompson. She says that many buyers will reject a property solely on the basis that it looks unappealing in the first four photos they see online.

"Pictures can make or break you," she says.

She says smart phones can take good photos but that those who use more advanced digital cameras can often take shots that look better in print and online advertising.

"Hiring a professional photographer for your home is worth every penny," Thompson says.

Here are a few other pointers for home sellers:

-- Seek out feedback from savvy real estate specialists.

Once a listing agreement expires, many home sellers decide to renew the agreement with the same agent, while others choose to switch agents.

"When a house isn't selling, some people blame the agent. But it makes no sense to blame the agent if you didn't follow their recommendations," says Eric Tyson, a personal finance expert and the co-author of "House Selling for Dummies."

Perhaps you want to change agents, if only to gain a fresh perspective. In that case, Tyson says it's wise to take advantage of the interviewing process to solicit feedback from the candidates.

This isn't the time to solicit compliments on your property. Besides seeking realistic pricing guidance, ask for recommendations on how to improve your home's condition. For example, do you still have peeling paint on the front door, or kitchen appliances that need replacing?

"If your house has been sitting unsold for a long time, you can't afford to ignore constructive comments made by agents who come by for a visit," Tyson says.

-- Lighten up a dark interior.

Nowadays, buyers are nearly unanimous in their preference for light, bright living spaces. That's why properties with high ceilings and large windows are so popular. That's also why dark-colored walls and heavy draperies are so unpopular.

"If you have dark paneling anywhere in your house, seriously consider painting over it in a light, neutral color," he says.

-- Rethink your clutter situation.

Before their home hits the market, most sellers have had their agents tell them about the importance of dispensing with clutter. By then, many sellers have managed to de-clutter a number of areas, including closets bulging with shoes and kitchen countertops loaded with gadgets.

Even so, if your home has been sitting unsold for a lengthy period, Tyson urges you to reconsider your clutter situation and see whether there's more to do. Also, think about whether you've lowered your standards of cleanliness and order.

"Clutter removal is a major issue. That's because rooms look a lot smaller when they're overfilled. Remember that the eyes of buyers will be naturally drawn to all that stuff rather than the good qualities of your house," Tyson says.

He says many sellers can make their homes much more appealing by removing at least a quarter to a half of all their furniture, including oversized recliners, clunky coffee tables and heavy bedroom furnishings.

-- Reduce your asking price to help rekindle buyer interest.

Thompson says homebuyers are acutely aware of home values and resent sellers they suspect of trying to price- gouge.

"It's not about how much money you want to get out of the house. It's about what the market believes your home is worth," she says.

Though it's far preferable to price correctly from the first day your place hits the market, Thompson says those who asked too much at the outset should try to rectify the situation as quickly as possible with a price reduction.

"If your neighborhood has shifted up or down -- for example, because mortgage rates have changed -- you have to take that into account," she says.

The good news is that sellers who agree to a belated price reduction can often capture a second round of buyer interest and perhaps even a couple offers at that late stage.

"It's inexplicable as to why. But sometimes one offer leads immediately to another, even though the two buyers never spoke to each other," Thompson says.

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

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