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When Less Is More: Planning a Move to Smaller Quarters

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | October 17th, 2018

A married couple in their 30s -- two IT professionals who work from their laptops -- have just put their colonial house in a leafy Baltimore neighborhood up for sale. Their plan: to hit the road in their Airstream travel trailer, along with their little Jack Russell terrier.

"This couple wants to see all of America, Canada and Mexico. They're lucky not to be tied down to an office routine," says Ashley Richardson, the veteran real estate agent who's listed the pair's property.

For decades, retirees have unloaded excessive belongings, left big houses and moved to smaller, more carefree quarters. But in recent years, more young adults are also choosing to downsize.

"These sellers figure that life is short and they don't need a big house to be happy," says Richardson, who's affiliated with the Residential Real Estate Council (www.crs.com).

Of course, few downsizers make as radical a shift in lifestyle as this couple. A more typical case is Dave Bruno, a strong proponent of the voluntary simplicity movement. He and his wife -- the parents of three school-age children -- sold their 2,100-square-foot Spanish-style property and moved to a 1,300-square-foot place in the same San Diego suburb.

"A lot of us have traded true wealth for the illusion of affluence," says Bruno, author of "The 100 Thing Challenge: How I Got Rid of Almost Everything, Remade My Life and Regained My Soul."

Bruno pared his personal possessions down from 300 to just 100 and has kept at that level for several years. With less energy spent managing a spacious and crowded house, Bruno says he was able to sharpen his focus on higher priorities -- including his family, friends and writing. Happy with the results of his challenge, he convinced his wife and children that downsizing the family's housing would also yield significant quality-of-life improvements.

"By moving to a smaller place, we have more time to relax and enjoy family time. We're living below our means and saving for our kids' college funds," says Bruno, a professional speaker who also heads a consulting firm called Middle Makers (www.middlemakers.com).

Bruno allows that downsizing involves trade-offs. His family remained in the same neighborhood so his kids could attend the same schools, but everyone in the house has less personal space. Two of his three kids now share a bedroom. Also, the family's communal rooms -- including their kitchen -- are much more compact.

To be sure, many Americans of all ages still favor large houses and are especially likely to seek more space as their young families grow. Even so, inventory-tight neighborhoods are now beginning to witness a gradual increase in supply -- with some of the newly listed properties sold by downsizers.

Here are a few pointers for homeowners hankering to downsize:

-- Recognize that a smaller lifestyle can take many forms. Duane Elgin, who's authored several books on voluntary simplicity, estimates that perhaps 20 percent of U.S. adults are now challenging the commonly held view that a bigger house is always better. But he also allows that the dreams of downsizers are quite varied.

Your vision could be to stay in the same suburban community, though with a smaller and less financially demanding home. Alternatively, you could choose to leave suburbia and reinvent your life in an urban loft or a rustic rural cottage.

Though many view downsizing as a form of sacrifice, Elgin says it can lead to greater richness.

"We live in such a frenetic, driven society. To evaluate our lifestyles, we need to step back and get clear. We need to ask whether the pressure of payments on a big house is worth it," he says.

-- Start with small victories in your quest to live more compactly. Even before you put your current property up for sale and begin searching for the right smaller place to buy, Bruno suggests you begin a methodical process of plowing through your accumulations to contain your material life.

"Start in your bedroom closet. We all have too many clothes and this is one area where you can score an early victory against clutter," Bruno says. "As you go through your clothes, select a unique outfit for every day in a two-week period. Put your extra clothes in storage for two months and see if you even miss them."

After that, look for other satisfying victories by sifting through your "junk drawers" one at a time. Next, head to your garage for a purging.

-- Give yourself sufficient time to make the transition. Bruno cautions homeowners that the process of downsizing -- from the day you make the decision to move to the day you close on the purchase of a smaller property -- can be time-consuming.

"You need to allow yourself plenty of time to make this transition and especially to sort through all your things. It took years to accumulate all that stuff, so you're not going to clear through all of it overnight," he says.

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

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Hot Tips for 'As Is' Sellers

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | October 10th, 2018

A divorced man in his late 60s was already struggling with medical issues when he was also diagnosed with bladder cancer. He was compelled to put his 1960s-era bungalow up for sale. He needed the money to buy a condo in an assisted living community near relatives.

Even though he’d previously worked as a home remodeler, the owner had let upkeep on his house slide for years. His living quarters were crammed with unsorted possessions, and the whole place cried out for a paint job. But he lacked both the funds and energy to undertake the necessary improvements before selling.

Unfortunately, this true tale didn’t end happily. Though the man’s bungalow was located in a solid suburban neighborhood with forested yards and a coveted elementary school, the property languished unsold for nearly a year. Ultimately, he accepted his only bid -- an extreme lowball from a couple who hauled in a dumpster for the man’s castaways and then tackled the renovations themselves.

John Rygiol, a veteran real estate broker, says selling a house “as is” nearly always results in sacrificial returns.

“These days, buyers’ eyes are accustomed to seeing model-homelike interiors. So, any place that goes on the market in a shabby condition is usually passed over,” says Rygiol, who heads an independent realty firm.

Housing economists say that “as is” sellers must moderate their expectations, especially in the current economy.

“The rise in mortgage rates this summer to their highest level in seven years has made it more difficult for potential buyers to afford a home. The slackening in demand is reflected in the slowing of national appreciation,” says Frank Nothaft, chief economist for CoreLogic, which tracks real estate markets throughout the country.

Nothaft is now forecasting upcoming valuation adjustments for housing, based on CoreLogic’s estimate that 38 percent of all metro area properties are now “overvalued.”

Even though now may not be the best of times for “as is” sellers to liquidate, Rygiol says many in this category simply can’t wait.

Here are a few pointers for sellers:

-- Concentrate on low-cost changes with impact.

Owners with few resources can still increase their odds of getting somewhat more for their “as is” property with little or no cash expended. Even those who must rely on volunteers to make their homes presentable are better off than sellers who do nothing to improve the looks of their property.

“It’s unbelievable the bad reaction buyers have to a house that’s messy,” says Rygiol, who’s affiliated with the National Association of Exclusive Buyer Agents (naeba.org).

Claire Jean Prager, a veteran real estate broker, says financially challenged sellers should consider searching for volunteers by looking on the internet for a support group, such as a cancer survivor network or a nearby faith organization.

“Go to a local church or synagogue and ask if they know anyone who could help you. You don’t have to be a member,” Prager says.

As you embark on a cleaning and decluttering blitz, she recommends you first focus on removing excess furniture and personal items that make it hard for those viewing your place to picture themselves living there.

“For example, I’m talking about all those photos and notes attached to your refrigerator with magnets and all those many family mementos. Get all these items packed up and put away in a storage area,” Prager says.

-- Try to find a listing agent trained to redo your interior.

The current real estate climate has spawned the new industry of professional home stagers. These are people hired to rearrange and supplement furnishings to make properties more appealing.

Mark Nash, a real estate broker and the author of “1001 Tips for Buying and Selling a Home,” says stagers typically charge $300 or more for a minor redo. But if you lack the funds to pay a stager, he suggests you look for a listing agent who will provide such services without charging an extra fee.

“An increasing number of agents are trained in staging, and some are getting very good at it,” he says.

-- Make your “as is” property more saleable with the right list price.

Rygiol says some owners are still tempted to “test the market” with an original list price at the high end of the neighborhood range.

But he says those in this predicament are better off pricing from the outset at the precise current market value of their property, given its current condition.

“Go around your neighborhood and look at For Sale signs as indications of the strongest and most successful agents in your area. Then call three of these top agents, asking them to come over and recommend a totally realistic selling price,” Rygiol says.

He says you shouldn’t necessarily select the agent who suggests the highest list price of the three. Rather, listen intently to their advice on how your “as is” property should go on the market.

“Tell your agent you want to sell in 90 days or less, and ask what price and marketing plan will get that job done,” Rygiol says.

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

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Pricing Tips for a Cooling Market

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | October 3rd, 2018

For months, Daren Blomquist and his wife have hankered to buy a much bigger house in the same middle-income suburb where they now reside. The couple’s two young daughters are tired of sharing a bedroom. Plus, the family recently acquired a boisterous golden retriever.

But the couple’s quest to replace their 1,800-square-foot Spanish-style property with a larger one in the same school district has been frustrating. New listings are rare in their neck of the woods, and when a property they liked came on the market recently, it was pulled back by the sellers before Blomquist and his wife could make a bid.

“The owners said they’re waiting until spring 2019. By waiting, they think they’ll get a lot more money,” says Blomquist, a senior vice president at Attom Data Solutions (attomdata.com), which tracks real estate markets throughout the country.

Blomquist understands the sellers’ reasoning for wanting to delay. After all, home prices have risen in his area, as well as many popular neighborhoods, for more than six years.

Even so, he questions whether it’s wise for the sellers to wait.

“There’s no reason for gloom and doom. But at this point, the headwinds are against home price appreciation. Mortgage rates are going up, which is triggering a cooling off period for buyers,” Blomquist says.

Mary Gillach, a real estate broker who’s sold homes since 2001, says another factor slowing the market is the fatigue many would-be purchasers are experiencing at this point in the cycle, especially in inventory-tight communities.

“People who’ve lost homes to other bidders feel demoralized,” she says.

Lawrence Yun, chief economist for the National Association of Realtors (realtor.org), says low inventory levels are now starting to contribute to a gradual housing market slowdown.

“Price gains are going to decelerate,” he says.

Here are a few pointers for sellers:

-- Lower your expectations for major price jumps.

Sid Davis, a real estate broker and author of “A Survival Guide to Selling a Home,” says that even in some exceptionally strong real estate markets, demand has recently started to recede.

“For several years, buyers have faced stiff competition, especially at the starter-home level. Some people are just not comfortable with so much pressure,” Davis says.

All this is not to say that popular neighborhoods are bereft of wannabe purchasers. But smart sellers know that pricing right from the outset is always crucial to a successful sale.

“This isn’t the right time to be a greedy seller, if it ever was,” Davis says.

He says a listing agent who’s skilled in calculating the right price for a property is a valuable ally for sellers who want to hit the target when their home first goes up for sale.

“No matter the market, asking more than your home is really worth is a big mistake. Most buyers won’t even make an offer if they think you’re greedy,” Davis says.

-- Seek guidance from real estate pros in your immediate area.

When it comes time to sell a home, many owners think it’s wise to hire a trusted family member as their listing agent. But Davis cautions against choosing someone from your inner circle.

Even if your family member has a proven track record in real estate, choosing that individual as your agent could be a mistake.

“Your relatives probably won’t tell you if your place is a dump that needs to be decluttered or that it’s worth a lot less than you think,” Davis says.

He recommends you interview three agents who work in your area to determine the right one to sell your house. Ask each to give you a candid evaluation of both the condition and current worth of your place. Also question all three on how they came up with their pricing recommendations.

“You want to see the actual comparable sales used to support their recommendations. In a changing market, it’s especially important that these sales be very recent, preferably for houses sold within the last month,” Davis says.

-- Review the agent’s track record on pricing.

Are you planning to sell a home in an area where property values are now flat or slipping slightly? In that case, it’s unlikely you’ll receive your full asking price at the closing table. But if your property was marked correctly from the outset, you should still come quite close.

“The idea is to hit the bull’s-eye from the beginning rather than letting your house become shopworn,” Davis says.

How can you judge whether the agents you’re interviewing have a good track record on pricing? One way is to review a few key numbers on their past listings, such as “list-to-sale” statistics. Then compare the original asking price versus the sum ultimately received by the sellers.

If the agent is routinely making realistic recommendations, there should be little difference between the original list price and the final sale price.

“Don’t listen to any agent trying to flatter you into a ‘feel-good price’ that’s much higher than other pros are suggesting -- with the unspoken expectation of seeking a price cut later. That could lead to a very subpar sale,” Davis says.

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

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