Smart Moves

These days it's not an uncommon conundrum: A woman who owns a home of her own becomes engaged to a man who also possesses a property. Once wed, they suddenly face perplexing questions -- Should they sell one house and move to the other? Or should they sell both and move to a third?

To those struggling to buy a first home, this situation sounds like an embarrassment of riches. Yet those in the throes of it often feel differently.

"In reality, this can be a very tough problem because there are so many financial and emotional factors to consider," says Kevin O'Reilly, a certified financial planner affiliated with the Garrett Planning Network (www.garrettplanningnetwork.com).

O'Reilly says it can be especially hard for couples to resolve the two-house challenge if one of the partners was married previously and still lives in a home once shared with an ex-spouse.

"It can cast a massive shadow around a new marriage," he says.

O'Reilly tells the true story of a couple of clients who searched for a resolution for nearly two years after they wed.

This 30-something couple, both professionals, came to the marriage with two mid-sized suburban houses. The husband, whose two teenagers from his former marriage lived with him, argued for his place because it was located near his kids' high school. But the wife resisted the idea of moving to a home where the ex-wife had lived.

It took five sessions with their financial planner before the couple decided to rent out the wife's property and live in the man's house -- though only until his kids complete high school. After that, they expect to sell both houses and buy a brand-new place.

Such complicated problems are becoming increasingly common due to later-in-life marriages and the reality that more young adults now spend years pursuing their education and careers before tying the knot, marriage expert Elizabeth Marquardt says.

Here are pointers for two-house couples who are newly married:

-- Share your thoughts on housing with your new spouse.

These days, an increasing number of people who marry have had years of independent living. Because of that, it's all the more important that they listen to each other when making joint decisions.

Before making any major housing decisions, O'Reilly recommends that couples write out a list of their personal priorities. For instance, the husband might place a premium on a two-car garage and a short commute. But the wife might value living in a large suburban property.

"It's always better to write down your thoughts rather than just tossing ideas in the air. Writing things out forces you to think things through," O'Reilly says.

If a deadlock develops, the couple might consider consulting a financial planner or an accountant for some third-party objectivity. An adviser may be able to help spur the conversation to a breakthrough that works for both husband and wife.

-- Open your mind to other housing alternatives.

Those remarrying after their children are grown typically have more housing alternatives than do those still raising young children. They don't need to worry about access to quality schools or nearby athletic fields.

"Once your children are grown, your needs change. One person might want to move to the country and raise horses. The other might want to live in a condo in the city," says Dorcas Helfant, former president of the National Association of Realtors (www.realtor.org.)

One way to address the subject of where to live, Helfant says, is to visualize your ideal free time. For example, on a Saturday would you rather tend roses or attend a jazz festival?

By listing your preferred activities, you'll bring into focus the kind of location and property that would best suit you and your spouse in coming years.

-- Factor financial realities into your planning.

In the wake of the economic downturn, many residential properties are "underwater," meaning more is owed on the mortgage than the home is worth. Although property values are again rising in many parts of the country, a large number of homeowners have yet to regain the ground they lost.

Should a two-home couple hang onto an underwater property and rent it out in hopes it will soon recover value? Or should they let it go now? According to O'Reilly, that depends on several key variables.

"The main factors to consider are how underwater your home is and the economics of renting in your area. Remember there's always an element of risk in renting -- if your tenants don't pay in a timely way or if they damage the house," he says.

-- Consider selling both of your homes and buying a new place together.

For many people launching into a new relationship, the idea of selling both their homes and starting fresh with a different place has tremendous appeal, according to O'Reilly.

"Financial factors aren't everything for couples. There's also a strong emotional dimension to any housing decision. So buying a place where neither of you have lived before might be your best possible choice," he says.

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

A widow in her late 80s had lived in her classic colonial for more than 40 years before resolving to move to an assisted-living residence in another state. One day her grown children arrived with a truck to take her and her basic furniture -- a bed, dresser and kitchen table -- to the new apartment.

Happily resettled, she phoned her listing agent, Ashley Richardson, to say her house was ready to sell. But when Richardson arrived, she was startled by what she found.

"The house was a disaster -- in truly terrible condition, and filled with junk. Buyers could never see past all that stuff to picture themselves living there. The place was simply unsalable until it could be cleaned up," she says.

Every room was crammed with dusty accumulations, including books, magazines, clothes, bedding and knick-knacks. And the kitchen counters were laden with many small appliances, among them blenders, coffeepots and mixers.

After a major weekend cleaning by the family removed 45 bags of junk, the house sold quickly, attracting four competing offers and fetching nearly the full asking price.

The moral of this true story? Through teamwork, focus and diligence, even a heavily cluttered home can be cleared out relatively quickly. And the reward for all that hard work can often translate to a speedy sale and more money in the bank.

Mark Nash, author of "1001 Tips for Buying and Selling a Home," says the removal of clutter is the most important step sellers can take to ready their home for market.

"(Buyers) can't fall in love with your house if it's filled with junk," says Nash, a veteran real estate broker.

Here are a few pointers for home sellers:

-- Take an inventory of your accumulations.

Sellers who do a thorough assessment of their clutter problem tend to be more efficient in solving it, Nash says.

To help you evaluate the nature and scope of your problem, he suggests you ask your listing agent to come over with a clipboard or notebook. Together, list the furnishings and other belongings that should be removed before your house is shown to prospects.

"One woman I know saved every birthday card and gift her husband sent her during 30 years of marriage, along with her daughter's crib and all the dresses she'd worn as a child. Other people save drawers and cabinets full of souvenirs from every vacation," Nash says.

Hard as it is, Nash says most sellers must face the necessity of reducing their collections of memorabilia.

-- Formulate an action plan.

Instead of proceeding on a random course, those who are efficient at preparing a home for sale follow an overall plan.

As an initial step, Nash recommends you plot the available space in your new property before deciding what to take with you. To do an accurate estimate, buy graph paper and plot the floor plan and storage space you'll have in the next home.

-- Take a systematic approach to sorting your stuff.

In the beginning, Nash recommends you sort like items -- such as candles, light bulbs or rolls of wrapping paper -- in one place.

"When people go through their houses, they realize they have a lot of 'rampant duplication' -- everything from flashlights to batteries to clothespins. When you discover you have way too much, it's easier to edit your collections," he says.

As you sort by category, Nash recommends you use a "three-box" system. One box should be labeled "keep," a second "give away or sell," and a third, "I don't know."

To ensure you keep up your momentum, make immediate arrangements to have your "give away" items removed quickly. Doing that will yield you more time to go through the things in your "I don't know" box, which require additional scrutiny.

"You don't want to second-guess yourself on what to keep. It's the decision-making process that gets people paralyzed. Making decisions is easier if you have fewer things to look at," Nash says.

-- Reach the end-point of your work by calling in reinforcements.

Even for organized people, culling through a house full of belongings can prove a difficult and emotionally tiring process, especially if they've lived in their home for a long time and have many attachments. Nash encourages such beleaguered home sellers to seek the help of friends, neighbors or family members.

"It's not ideal for relatives to help. They're not objective and could start reminiscing along with you. That might take you off on tangents and slow you down," he says.

If there's no one in your circle you're willing to ask for assistance, Nash recommends you run an ad to find reasonably priced help. In many cases, high school or college students are eager for this work to earn spare cash.

"Students are very good for the grunt part of the job. And their sheer presence should help keep you going at a good rate of speed," he says.

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

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.)