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Single- vs. Multi-story Living for Seniors

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 21st, 2018

Under heavy pressure from her grown daughters, a Baltimore woman in her early 70s suddenly sold her huge Tudor house. Once widowed, living alone in the property wasn’t a viable long-term option.

But what followed the sale was a hurried and ill-conceived property purchase recommended by the two daughters. This involved a three-level townhouse in the same neighborhood. This proved a mistake because, like the Tudor house, the new place requires the widow to climb stairs -- a painful ordeal given the arthritis that afflicts her knees.

For seniors, protecting the knees is not only a matter of comfort. It’s also a key health and safety priority, says Dr. Michael Nevitt, an expert on osteoarthritis at the University of California, San Francisco.

Nevitt says every year an increasing number of seniors suffer from a dangerous fall due to knee buckling and poor balance linked to weak muscles or osteoarthritis. Such falls are especially likely to occur when older people descend stairs.

Of course, moving to a high-rise apartment building with an elevator solves the problem of stair use for numerous seniors. But many longtime homeowners fear the loss of autonomy that comes with apartment living. They’d rather move to a smaller, one-level detached property if they can find one in their price range.

Unfortunately, in communities where one-level homes are scarce, those seeking to downsize pay more per square foot than they would for a multi-story property, especially a very vertical townhouse.

Sandy Jurich, a longtime real estate agent in Michigan, says that soaring land costs explain why multi-story homes are generally less expensive than similarly sized single-level homes.

Still, for those who can afford it, there are a number of advantages to a single-story house. Chief among these is efficiency of movement. You can go from room to room without climbing stairs, sparing yourself time and exertion.

“There’s a lot to be said for convenience. For instance, it’s a lot easier to clean a single-level house,” Jurich says.

Mark Nash, a real estate broker and author of “1001 Tips for Buying and Selling a Home,” says senior buyers should think seriously about the purchase of a multi-level place before they commit.

Here are a few pointers for older buyers:

-- Select your next place with an eye to the future.

Whether you’re 29 or 69, it can be hard to picture your future housing needs. Yet no matter your age, projecting into the future is important.

Nash recommends that buyers look at least three to five years ahead.

“Planning for the future is especially important if you’re approaching your late 50s and anticipate retiring in the next few years. In this age range, health or mobility problems can start to develop at any time,” Nash says.

However, not all seniors find stairs to be problematic. Indeed, some who are especially physically fit may actually prefer to remain in a multi-story house because stair climbing gives them a form of daily exercise.

-- Factor in the advantages of a second-floor “hideaway area.”

During your retirement years, do you intend to launch a home-based business or start writing that romance novel you’ve planned for years?

If so, Nash recommends you consider the advantages of an out-of-the-way second-story office where you can concentrate with few interruptions. Likewise, many homeowners enjoy an upstairs bedroom where they can pursue a hobby.

“Sometimes, it’s nice to have a getaway place in your home, where you can leave a project all spread out and go back into that ‘cave’ when you want to. For example, this would be good for someone embarking on a family genealogy project,” he says.

Another less obvious advantage of an upper-level retreat: You’re further from the temptations posed by food in your kitchen.

-- Rule out a property that would require an addition to be livable.

Some budget-minded seniors consider purchasing a traditional two-story place with the intention of building on a first-floor master suite later.

That’s usually a poor idea, Nash says.

“Sometimes, real estate agents encourage clients to buy a house that needs an addition. But getting an addition done is expensive and can take six months or longer. And remember, it’s not your agent’s time or money at stake,” he says.

-- Don’t necessarily duplicate your relatives’ lifestyle.

After their children are grown, it’s customary in many families for the elders to surrender their large homes and move to much smaller quarters with fewer upkeep demands, such as an apartment or a townhouse. Perhaps your parents, aunts or uncles made such a move after they reached the age of Social Security eligibility.

But Nash says that just because your relatives were happy with their late-in-life moves doesn’t mean you should replicate their thinking.

“There’s no such thing as a one-size-fits-all housing choice. How you live is an intensely personal decision,” he says.

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

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Tips for Nervous Homebuyers

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 14th, 2018

A federal employee in his early 30s just signed a year-long lease for an upscale apartment near the National Mall in Washington, D.C. For a two-bedroom, two-bath apartment, rent on the place tops a handsome $3,000.

Instead of putting out that much rent each month, he could have bought a condo-apartment or a modest townhouse in the D.C. area. In fact, that would have been his preference. But having come of age during the housing downturn of a decade ago, he’s terrified of the commitment that comes with a mortgage. This explains why he keeps renting.

Like the federal employee in this true story, a minority of millennials are too fearful about homebuying to make a purchase. These include people with vivid recollections of family members and acquaintances who lost their properties to foreclosure during the Great Recession, which cost them both sleepless nights and ruined credit.

But is financial upheaval truly more likely for homeowners than renters? A new study from the Urban Institute (urban.org), a Washington, D.C. think tank, questions that assumption. Indeed, the study -- which compared the financial situations of tenants versus owners -- found that those who rent suffer more financial uncertainty.

“Rents can often climb each year, compared to a fixed-rate mortgage where home payments remain the same every month over a period of years or even decades,” says Corianne Payton Scally, a co-author of the study.

Scally acknowledges that across time, homeowners can confront rising property tax bills, obviously not a problem for tenants. Still, she says that compared with owners, renters at the same income levels face higher rates of “material hardship” and are less likely to have savings for emergencies.

“Renters can see a higher proportion of their income going to pay their rent year over year if their income does not keep pace with rising rents. They can start to feel the financial pinch and may have few options but to start cutting costs elsewhere,” she says.

Are you a renter who, despite your fears, is determined to pursue homeownership? If so, these few pointers could help:

-- Remind yourself of the key reasons you want to buy.

Anxiety is an influential factor that can stop people from actualizing their home-buying plans, even when logic tells them it’s the right time to go forward, says Sid Davis, a real estate broker and author of “A Survival Guide for Buying a Home.”

What’s important is to head into any purchase with as much objective information as possible, he says.

To be sure, there could be legitimate reasons to wait to buy. Perhaps you have a basis for worry that the company where you work could soon lay off employees, or that your spouse could soon be subject to a job loss.

“None of us has a crystal ball. But those who have secure jobs and truly want to own a home in order to build equity and enhance their family life might be kicking themselves later if they wait too long,” Davis says.

-- Seek mortgage pre-approval from a reputable lender.

The last recession ushered in an era of highly conservative lending practices, and most lenders still go to great lengths to ensure that the mortgages they originate are solid. This means borrowers must be unusually well prepared to respond to the lender’s requests for documents.

As proof of income, many lenders now insist on more than the customary pay stubs and W-2s. For example, they’ll likely ask you for federal tax returns. In addition, they’ll probably want assurances that the funds you’ve accumulated for your down payment have been in your savings or checking account for some time and weren’t borrowed from an uncle just last week.

The time you spend documenting your eligibility for a home loan is time well spent if the lender gives you a “pre-approval” letter before you begin shopping for a property. This letter is a vitally important bargaining tool to help you win the home of your choice.

-- Take a cautious approach to home selection.

Many popular neighborhoods are still short on available inventory in the starter-home category, although this situation is starting to ease. Davis says this pressure to compete for the best properties is causing some anxious buyers to back off.

“After losing a property to another bidder, some home shoppers get very discouraged and throw in the towel,” he says.

Rather than abandoning your pursuit of a property due to tight inventory conditions, Davis urges you to “hang in there” and keep looking.

“In the late fall and winter, home shoppers face less competition from other bidders than they do in the spring and early summer, making this an ideal time to land an exceptional deal from a highly motivated seller who must move,” Davis says.

If you’ve identified your target neighborhood but haven’t yet found a suitable home there, spend your waiting time getting to know the community, making sure it’s the right place for you and your family.

“Walk through the neighborhood, chatting with residents. That way, you could be the first to learn about up-and-coming listings. Be patient and don’t let your agent rush you into the wrong choice. Remember that the home you buy now could be in your ownership for years to come -- so it’s folly to make an impulsive decision,” he says.

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

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Vacant Houses Can Mean Big Savings

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | November 7th, 2018

For several years, homebuyers in popular neighborhoods have been plagued with the problem of tight inventories. Especially in starter-home communities, there have been more buyers than sellers. The result: multiple bidding drama.

Finally, that situation is gradually easing, says Daryl Fairweather, the chief economist of Redfin (redfin.com), a national real estate brokerage. At long last, the inventory crunch is starting to subside. In coveted areas, prices are still ascending, but at a slower rate.

These market changes are beginning to give buyers a breather, helping offset the rise in mortgage rates and making the home search process feel less frantic.

Experienced real estate pros say sellers are slower than buyers to catch on to market changes. Given human nature, some owners are still trying to “test the market” with very high list prices, which can cause a house to get stigmatized and then to languish unsold for an extended period.

This can create buying opportunities for attentive purchasers, says Dorcas Helfant, the co-owner of several realty firms. These opportunities occur when the owners of an overpriced home are compelled to move away with the place still unsold, leaving it vacant.

Helfant, a past president of the National Association of Realtors (realtor.org), says that after a property has gone vacant, the owners typically become much more motivated to negotiate, because they face substantial carrying costs.

With current market conditions gradually easing for buyers, Helfant says it’s possible to get a good deal on a vacant property. But, as always, she urges buyers to exercise caution, especially if the property you’re considering is vacant due to foreclosure.

Here are a few pointers for buyers:

-- Attempt to find out who’s owned and occupied a vacant place.

It’s tough to gain details on a house that’s been vacant for months because its owners moved away. It’s still harder if the empty property has gone back to the bank through foreclosure.

“The bank won’t tell you anything. And, frankly, the folks at the bank -- or the real estate agent they’ve hired -- probably won’t know much about the people who lived there,” says Merrill Ottwein, a former president of the National Association of Exclusive Buyer Agents (naeba.org).

To get the scoop on a vacant property that interests you, your best sources are often neighbors.

“Those living nearby probably know something about the skeletons in the closet," Ottwein says.

-- Schedule a “pre-inspection” of a vacant place.

Perhaps the vacant property you like has gone unsold for so long that you’re nervous about hidden defects. In fact, you don’t even want to make an offer until you know more. In such cases, Ottwein advises hiring a home inspector to take a preliminary look.

What are the advantages of hiring an inspector to check a property before (rather than after) you’ve submitted your bid?

“If you decide to go through with the purchase, a pre-inspection will let you set your bid based on findings from the inspection. Then, if you decide to back out of the deal, you can walk away without complications,” Ottwein says.

-- Ensure that the utilities are on during the inspection.

Cost-conscious banks that own foreclosed property sometimes shut off utility service to the vacant homes they own. But a lack of utility service poses a challenge to home inspectors.

“In fact, it’s useless to do an inspection when the utilities are off. You can’t tell if the cooling, heating and plumbing are functioning correctly,” Helfant says.

She strongly recommends you always have a home inspection on a vacant property -- if not before a bid is submitted, then after. And even if you have to pay to get utility service restored, she says it’s worth the expense.

“It shouldn’t be too costly to get the utilities restored for just a five-day period or so,” she says.

-- Review your bid before finalizing your offer.

“Before you write your offer, you and your agent should take a careful look at the recent sales history in your neighborhood. As always, you have to be careful to avoid overpaying,” Ottwein says.

Ideally, you’ll want to examine at least three similar properties that have sold in the immediate area in the past three to six months -- adjusting for differences, such as a larger garage or a second fireplace.

Although you’ll want to take a home’s condition into account when judging its market value, Ottwein advises against seeking out-of-proportion discounts to compensate for superficial shortcomings. Also, don’t get greedy and demand too many small concessions.

“The market might be slightly better for buyers now. But that doesn’t mean you can take the owners to the cleaners. Forget about small issues like the neon yellow kitchen walls you want repainted or replacing that cheap light fixture in the dining room. Focus on the big picture,” he says.

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

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