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Tips on Buying a Mega-House

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | July 29th, 2015

A widow in her late 70s recently fulfilled a long-held fantasy. She bought a 5,500-square-foot mega-house on two acres, complete with a basketball court and swimming pool.

Her goal? To create a magnet for family visits.

"The woman is incredibly happy she bought the house because all three of her grown daughters bring the grandkids over constantly," says John Rygiol, the real estate broker who helped her find the right place.

Rygiol, who's affiliated with the National Association of Exclusive Buyer Agents (naeba.org), detects a rebound in the sale of oversized houses, which began in many markets about two years ago.

"Many huge-house buyers are successful professionals with school-age kids. But a surprising number are over 55 and are checking a major item off their bucket list," Rygiol says.

James W. Hughes, a housing analyst and dean at Rutgers University, says that the desire for ownership of a large house is a constant for many in this country.

"There's something beguiling about big houses. Bigger is always better in this America -- at least for people who can afford it," Hughes says.

Rygiol says those with the ability and aspiration to own a mega-house should take into account the resale potential of the property. Otherwise, he says they could be stuck with a white elephant that might one day prove a costly mistake.

Here are a few pointers for buyers:

-- Select the most desirable neighborhood you can afford.

It's inevitable that real estate values change over time. However, Hughes says values always stay strongest in areas he calls "winners' circles." These are communities that retain their desirability during all phases of the economic cycle.

"Affluent communities with strong amenities are usually on the leading edge of any recovery," Hughes says.

Distressed properties are now rare in popular communities. And Rygiol cautions against the temptation of some buyers to go to a lesser neighborhood to capture a "steal."

Rygiol says that a smaller house in a stronger neighborhood is better than the reverse.

-- Choose an area with a reasonable commute.

In past years, more people who wanted a large house willingly accepted a lengthy commute as part of the package.

But Rygiol says more homebuyers are now fearful of taking on a long commute due to their increasingly harried schedules.

Rygiol says even "road warriors" -- who subsist on satellite radio and believe they'll always be comfortable with a long commute -- often find it tiring over time. After a few years, they conclude that the time-stealing trade-off wasn't worth the sacrifice to obtain a lower-cost-per-square-foot house.

"Frankly, buying a house that's poorly located for commuting can expose you to both financial and health risks, if you spend long hours trapped in your car," he says.

-- Seek out an area served by top-rated schools.

It's widely believed that prime neighborhood schools help keep property values strong over time. Indeed, Rygiol contends that school quality is gaining importance due to intensifying global competition.

"Everyone wants their kids to get the best possible education so they won't fall behind the pack," he says.

What's the best way to check out school quality? Real estate agents typically decline to characterize schools in terms of quality, out of concern that their comments could be construed as discriminatory. Even so, your agent should be willing to provide you a large volume of statistics that compare schools on test scores, high school graduation rates and other quantitative factors.

Also, you can make an appointment to visit schools to see how they fare on intangible factors, like the attitudes toward students conveyed by school administrators.

If you're expecting to buy a house in a high-income area, Rygiol advises you to look beyond the local public schools.

"In these areas, proximity to private schools may also influence your home values over time," he says.

-- Consider carefully the realistic needs of your household.

It's common for the parents of adolescent children to seek a large house with a master suite that's separated from the bedrooms their kids occupy. This is especially likely if their offspring like loud music or noisy video games.

But adults without children can also have solid reasons for acquiring large housing. Nowadays, they often seek extra rooms to use for dual home offices, especially if one or both wish to run a home-based business.

What's more, Rygiol says more big house buyers currently covet space for novel uses -- including a private massage room or a yoga studio.

"It's OK to buy a big house for non-traditional purposes -- if you'll enjoy it and you're absolutely sure it won't put you in a financial bind," he says.

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

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How to Live and Deal With Boomerang Kids

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | July 22nd, 2015

In the aftermath of the recession, many more young adults have found employment. But even for those working, the economy remains challenging. That's because wage gains have lagged, student loan debts are formidable and the cost of renting an apartment has risen dramatically.

All this means that many young adults are moving back into the family homes where they were raised. This can complicate things for their parents.

Take the true story of a 25-year-old graphic designer from Virginia who couldn't make ends meet on the job she snagged in Washington, D.C. So she quit and called her parents to say she was moving back home, causing them to cancel their plans to downsize to a smaller residence.

Christina Newberry, author of "The Hands-On Guide to Surviving Adult Children Living at Home," says an estimated 25 million adult children are now living with their parents.

"(H)aving adult children return home can put a ton of stress on everyone involved," says Newberry, who twice moved back to her parents' place, once at age 21 due to a career transition and again at age 29, after a divorce.

Do you have one or more adult children whose wishes could derail your housing plans? If so, these pointers could prove useful:

-- Solidify your plans before telling your offspring.

Kathleen Shaputis, author of "The Crowded Nest Syndrome," says that whatever their wants or needs, the parents of grown children should put their own preferences ahead of their kids' wishes. (This assumes their offspring are in good health and have the capacity to earn money on their own, if only after a brief boomerang period.)

"Don't give your kids veto power over your choices. And make sure your plans are firm before you announce them to your kids. Otherwise, they could sense your ambivalence and try to pressure you," she says.

Still, Shaputis says it's unwise to make a major real estate move, such as selling a longtime family residence, without first informing your adult children.

"Otherwise, your plans could come as a rude shock that might cause needless conflict within the family," she says.

Shaputis says it's ideal to choose a restaurant or another public venue to break such news to your children.

"It's usually easier to handle an outburst if it happens in a public place," she says.

-- Try to assist your grown children to transition emotionally.

Even if your kids have already reached their 20s or 30s and are living independently, one of them could find the sale of your family home especially hard emotionally.

"Some kids are very tradition-oriented. For instance, they could be very upset that Thanksgiving dinner will no longer be held in the same place as it always was," Shaputis says.

While you don't want to forfeit your overall housing plans to shield your grown children from disappointment, she says you can help them make a smoother transition with reassurances that they're welcome to visit no matter where you live.

-- Help guide your kids to a place of their own.

Do you have grown children living with you who will need to move when your home is sold? If so, Shaputis says you can help soften this transition by assisting them to identify ways to live independently.

"Brainstorm with them about how they could make it on their own. Maybe they could use some help finding an apartment and a roommate to share the rent. Or maybe they need suggestions for finding a second job that lets them become more self-sufficient," she says.

Of course, the financial realities of the current economy may require both parents and their grown children to make some temporary accommodations.

"The reality is that sometimes everyone in the family has to pull together to make ends meet. Extended-living arrangements have been going on since the dawn of civilization," she says.

-- Remember that good parenting isn't always about yielding to the kids.

Alyson Schafer, a psychotherapist and author of several parenting books, says there's no reason parents should feel guilty for asserting their right to make their own housing choices, especially after their kids have reached maturity.

"If it's necessary to downsize, remember what's ultimately important is that your kids know you'll always love them and will be happy to see them -- even if you have to move to a tiny apartment," Schafer says.

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

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Choosing Between a One- and Two-Story House

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | July 15th, 2015

A home-buying couple in their 50s had a heated dispute about whether to buy a one- or two-level house.

"There was a lot of drama for these two. The husband wanted a grand, opulent two-story mansion ... But his wife wanted the ease and convenience of a less showy one-level house," says William Wegener, the real estate broker who assisted the couple.

In the end, the woman's preferences prevailed.

Wegener says that disputes about whether to buy a horizontal or vertical house like the one above are hardly infrequent.

Sandy Jurich, another veteran broker who works solely with home purchasers, tells of a couple with whom she worked who never reached agreement about whether to buy a vertical or horizontal house.

"Finally they just threw in the towel and divorced," says Jurich, who's affiliated with the National Association of Exclusive Buyer Agents (www.naeba.org).

Mark Nash, a longtime real estate broker and author of "1001 Tips for Buying and Selling a Home," says homebuyers who have mixed feelings about housing styles should make sure they visit at least two horizontal properties and two vertical ones.

"Picking one over the other can be a huge decision with significant implications for how you live," Nash says.

Here are a few pointers for buyers:

-- Try to project your future housing needs.

Whether you're 25 or 65, it can be tough to plan for your future housing needs. But attempting to look ahead is worth the effort, Nash says.

He encourages homebuyers to plan ahead at least three to five years.

"People nearing retirement have a lot to consider when choosing a house. At this age, problems with health or mobility can surface at any time," Nash says.

On the other end of the spectrum, Nash says couples with young children should think ahead to when their kids will be pre-teens or teenagers. Those for whom affordability is a major issue may wish to choose a two-story house with extra bedroom space for the changing needs of their offspring.

-- Factor in the investment potential for ownership of a one-level house.

Now that the oldest boomers are well into their Medicare years, Nash says demand is increasing for single-floor living among pre-retirees and retirees. The result: ownership of one-level homes should prove a good investment over time, so long as they're located in popular neighborhoods.

"No doubt the market for ranch houses will intensify in the future. Buying a one-story house in an area where they're in short supply should be an especially good deal," Nash says.

But he notes that some retired homebuyers prefer to buy a multi-level house where their grown children and grandchildren can be comfortably accommodated during overnight stays or vacations.

-- Think through the advantages of a second-floor "hideaway."

Perhaps you already work from home or expect to start doing so in the next few years. If so, Nash recommends you consider the advantages of a second-story office where you can concentrate with few interruptions. For similar reasons, many homeowners enjoy a tucked-away upstairs room where they can pursue a hobby.

"It feels good to have a space where you can leave your projects all spread out without anyone bothering you," he says.

Another less-than-obvious advantage of an upper-level retreat: you're further from the temptations posed by the high-calorie snacks that call out to you from the kitchen.

-- Avoid any property that requires you to build an addition.

What if you're over 50 and starting to suffer from osteoarthritis in your knees and hips, yet still wish to purchase a traditional two-story place? Should you consider buying a vertical property with the intention of building on a first-floor master suite later?

That's usually a poor idea, according to Nash.

"Getting an addition done will likely be more costly than you imagine and take six months or longer to complete," he says.

Of course, one-level houses aren't to be found in every community. However, if you're sure a one-story house is your best choice, Nash suggests you look at comparable neighborhoods to the one you've targeted to locate a property that's "turnkey ready." Or find a two-story place that already has a first-floor suite built in -- an increasingly common feature in newly constructed houses.

"But always remember that location should be the top element on your selection list," Nash says.

-- Differentiate between your lifestyle and that of your parents.

Maybe you were raised in a family that always lived in two-story colonials. Though you're emotionally geared toward buying this type of home, you intellectually realize that the simplicity of one-level living is better suited to your busy lifestyle.

If that's so, Nash recommends you step outside your comfort zone and envision a different picture of your ideal lifestyle.

"We all have to break from our family traditions at some point. The good life isn't about replicating your parents' choices. It's about embracing what brings happiness to you and your loved ones," he says.

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

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