Smart Moves by Ellen James Martin

TIPS FOR THOSE WHO THINK BIGGER IS BETTER

Now that their four children are finally through college, a construction company executive and his wife, a hospice nurse, are eagerly searching for the much larger and glitzier house they couldn't afford when the kids were young.

Like many homebuyers currently scouring the market, the couple is convinced that now is an optimal time to fulfill their big-house fantasies, says Michael Byrd, the agent representing them and president-elect of the National Association of Exclusive Buyer Agents (www.naeba.org).

Like the couple in this true story, an increasing number of homeowners who have the equity and desire to trade up are now planning to move to larger quarters. Such "upsizers," as real estate agents call them, include young families and older couples with long-deferred housing aspirations.

"There's a tremendous amount of buying activity going on right now. People realize that the concurrence of low prices and low mortgage rates give them phenomenal buying power," says Byrd, who believes this is the best market for buyers since he entered real estate in 1987.

Here are a few pointers for people who want to buy a larger or fancier home in the current market:

-- View your housing options in a holistic way.

Making a housing change inevitably involves trade-offs, says Byrd, who personally prefers living in a small, easy-to-maintain property. Instead of making a hasty purchase, he urges buyers to plan and reflect before heading out to shop for a home.

"Every decision on housing is a lifestyle decision. You have to figure out which house and neighborhood features are vital for you and which you could sacrifice," he says.

To sketch out their priorities, Byrd recommends that prospective buyers take out a legal pad and create three columns. In the first, list "must have" features; in the second, "really want to have;" and in the third, "nice to have."

When it comes to married couples (or those living together), Byrd says it's critically important that both partners do the paper-and-pencil exercise separately and then compare the two lists. For example, a husband might insist on a house with a three-car garage that's near a golf course. But his wife might put a short commute and a gourmet kitchen on her "must have" list.

"When buyers get stuck on where to live and how big a house to buy, it's usually because husband and wife disagree," Byrd says.

-- Make sure you're saving enough for retirement.

Granted, there's much more to quality-of-life decisions than financial priorities. Still, a comprehensive plan focused on present cash-flow concerns should also take into account long-term financial needs, says Eric Tyson, a personal finance expert and author of "Mind Over Money: Your Path to Wealth and Happiness."

Before deciding how much to spend on better housing, he urges you to think through your retirement savings situation.

To gauge how well prepared you are for retirement, he suggests you use the free planning calculators provided by such mutual funds as Vanguard (www.vanguard.com), and T. Rowe Price (www.troweprice.com).

"If you're already close to retirement and haven't saved enough to date, you need to try to catch up. Don't make yourself house poor at the expense of your retirement savings," Tyson says.

-- Keep in mind the extra responsibilities associated with a bigger property.

Perhaps your ideal home is quite lavish, complete with elaborate landscaping as well as a backyard swimming pool and fountain. If a financial analysis shows you can afford it, should you go ahead on that basis alone?

Not without considering the time implications of owning a much larger property, Tyson says.

"Many people underestimate how much time it can take to own and manage a big property. This can be a huge commitment, even if you're handy and can afford to hire help. Remember this is free time you could put to other uses, like exercising, reading good books or enjoying friends and family," he says.

Tyson, who co-authored "Home Buying for Dummies," suggests people carefully review their personal priorities before taking on ownership of a property that will tax their time.

-- Don't rule out a move to another neighborhood or general area.

Moving to the suburbs could allow you to purchase a larger, splashier house for less money than if you bought closer to a town center or city.

"If you're comfortable living far out and you really want a brand new place -- one with a big yard and the right to pick your favorite paint colors and appliances -- then moving to an outlying neighborhood might be the right answer," Byrd says.

"Not everyone needs to worry about a long commute. That's because many more people can now work from home. And retired people usually have lots of choices on where to live," he says.

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