Smart Moves

Many people think home-buying bargains are gone, a casualty of the nation's gradual economic recovery. They reason that given rising home values, the only remaining areas where you can nail a good deal are those with high unemployment or urban blight.

But seasoned real estate specialists beg to differ. They say you can still find a quality home in a desirable neighborhood for a very good price -- assuming you take a strategic approach, find motivated sellers and exercise care in the way you craft your offer.

"There are always people who want or need to cash out of their house quickly because of divorce, financial problems or a new job in a faraway location," says Tom Early, a real estate broker who specializes in helping buyers.

As the headlines attest, median home prices have risen in many neighborhoods in recent months. And this past spring marked strong sales in many areas due to a shortage of inventory relative to supply. But since then the supply-demand ratio has shifted to a somewhat more balanced market.

"Lots of baby boomers are now coming out of the woodwork to sell homes they've owned for years," says Early, a past president of the National Association of Exclusive Buyer Agents (www.naeba.org).

He contends that buyers can often snag a deal if they find sellers who have a sense of urgency about letting go. It's also important to package your offer in a way that's unlikely to offend the owners, thereby reducing the odds it will be rebuffed.

The term "lowball offer" has bad connotations for real estate professionals, because ridiculously low offers are nearly always destined for rejection.

"An overly low offer punctures (sellers') pride," Early says.

To prevail in negotiations, Early says buyers should stay within a reasonable range of current market value with their first bid, recommending an offer of "no more than 10 to 20 percent off market value."

Here are some other pointers for purchasers:

-- Seek to connect with the home's sellers.

Because nearly all homeowners have emotional attachments to their property, most sellers react badly to any remarks that denigrate their home, says Fred Meyer, a longtime broker who sells property around Harvard University.

When shaping your offer, how can you convince the sellers that you sincerely appreciate their place and would value living there? Meyer suggests you attach to your bid a handwritten note that introduces you and tells the owners why you like the home.

"The idea is to humanize your offer. By writing a note, you help the sellers visualize who you are and what you like about their place," he says.

-- Attach a pre-approval letter to your offer.

In extremely popular neighborhoods, buyers currently outnumber sellers, and multiple bidding situations are relatively common. In those areas, Early says it's especially important to attach a mortgage pre-approval letter to your offer.

"Sellers don't want anything to do with buyers who can't prove they have the wherewithal to finance their house," Early says.

In fact, Meyer says it's often wise for buyers to attach bank statements showing they have the funds to take the deal to closing.

-- Don't forfeit your chance for a home inspection.

It's true that a condition-free offer represents a stronger bid and gives you an advantage over other bidders. Even so, Early urges you not to waive your right to a professional home inspection.

"People who don't get an inspection are at risk of buying a pig in a poke. Very few people have enough money to cover the costs of the horrendous house problems," Early says.

Are you competing with other bidders to buy a highly desirable property and want to present as condition-free an offer as possible? In that case, Meyer suggests you arrange to have your inspection done prior to drafting your bid.

"That way you can make a very clean offer without surrendering the chance to have the house checked out for problems," he says.

-- Keep in mind that timing is critical to motivated sellers.

Whether the sellers of a home are willing to deal with a low bidder often depends on how much pressure they're under to sell, Early says. Those in a rush are usually more willing to entertain a low bid, even if it means making a counteroffer to bring up the dollar amount.

"Timing is often the single most critical factor in getting a great deal on a house. Speed is especially important to sellers under duress who must move soon or face foreclosure. That's why the willingness to move quickly can strengthen your hand as buyers," Early says.

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

Americans have been on a home-improvement binge for years. But at some point, many homeowners realize their aspirations can't be met through remodeling alone. That's when they start thinking seriously about buying a better property.

What spurs move-up buyers to action? Often, it's a job promotion, a growing family or the quest for better schools. Lately, it could also be the belief that if they don't act soon, home values might rise to the point that they can no longer afford to move up.

"At some point, people just say, 'Let's go ahead and take the plunge,'" says Ashley Richardson, a long-time real estate agent affiliated with the Council of Residential Specialists (www.crs.com).

She tells the true story of a couple of 33-year-old buyers who, until recently, were living comfortably with their 2-year-old son in a tiny Cape Cod with a dining room so small it could barely fit a table. Word that the wife was pregnant with twins sent them house-hunting.

After much discussion, they sold the house they bought in 2006, accepting the reality that it had gained little value since then, and found a colonial triple its size in a nearby neighborhood.

And it's not just people with growing families who are moving up. Richardson also cites an older group she calls "house tweakers" who make a hobby of home improvement.

"As soon as they make one house absolutely perfect, they feel compelled to find another house they can remodel," she says.

One common denominator to all trade-up buyers is the quest for upward mobility that Richardson believes is embedded in American culture.

Here are pointers for move-up buyers:

-- Let go emotionally of your current property.

Surprisingly, many people who want to sell their property in favor of a better one have a tough time letting go of their current domain, says Sid Davis, the author of several real estate books.

"Subconsciously, many sellers think they're entitled to a higher-than-market price because they love their house and think it's better than any other place for miles around," says Davis, a veteran real estate broker.

"Get greedy and you'll hurt your plans for moving any time soon," Davis says.

How can you loosen emotional ties to your current property so as to sell it properly?

Davis recommends that before setting your list price, you do a brief tour of the properties available in your price range in the area where you wish to live.

"Looking around at other options can flip the switch in your brain and cause you to get excited about buying that better house. This should help you on the selling end," he says.

-- Never ignore resale potential when buying a home.

If you're trading up to a better property for the second or third time, you may assume your next buy will be your last -- what real estate people call a "forever house." But statistics show that many owners sell sooner than expected, says Dorcas Helfant, a former president of the National Association of Realtors (www.realtor.org).

Regardless of how long you stay, you'll want a place that not only holds its value but appreciates. That's why it's wise to look for features that will gain in value over time, such as those that help keep utility bills to a minimum.

Helfant says one good bet is to look for energy savers, including extra attic insulation, double-paned windows and high-efficiency appliances. In addition, look for an open floor plan that should retain its popularity over time.

"Buyers don't like chopped up floor plans with a lot of small, self-contained rooms. They like a kitchen that flows directly into a large 'great room,'" she says.

-- Don't rule out a brand-new home.

As always, real-estate markets vary in strength, fluctuating through the seasons and economic cycles. But Davis says one constant is that better deals, on a per- square-foot basis, are typically found in upper-range subdivisions.

"Some areas now have a shortage of new housing at all levels, while others have an excess of new properties at the top. Builders with big construction loans are always eager to sell so they can repay their debts," he says.

-- Consider the purchase of an "over-improved" property.

The recent surge in home-improvement activity prompted some homeowners to go to extremes, making their properties fancier than their neighbors'. For example, they might have added exotic wood kitchen cabinets in an area without upscale kitchens. Or perhaps they've built on a fifth or sixth bedroom in a community of three- or four-bedroom houses.

When they first set their list price, the owners of an over-improved home may ask too much, on the hope they'll recoup every dime they spent on remodeling. But if they've outdone the local market, their home will typically sit unsold for a lengthy period, says Michael Crowley, a broker and former president of the National Association of Exclusive Buyer Agents (www.naeba.org).

Once a major price cut is taken, however, the over-improved home can become a genuine bargain, Crowley says.

"The key here is to be sure your agent is tracking the home and can tell you the minute a big price reduction occurs. At that point you might catch a wonderful buying opportunity," he says.

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

They were a newly blended family with a grand total of seven kids, four from his first marriage and three from hers. After the wedding, they headed out to hunt for a house spacious enough to hold them all.

"They knew it would be really tough for everybody to learn to live together under the same roof. So they searched for as much space as they could afford while still insisting on a neighborhood with good schools," says Sid Davis, the family's real estate broker.

In most parts of the country, families are no bigger than a decade ago. But in some areas -- such as Utah, where Davis owns an independent real estate firm -- many families are larger than the national average.

Davis, author of "A Survival Guide for Buying a Home," says his clients often face challenging trade-offs when selecting a property to house all their kids.

"Very few big families can afford everything they need and want in a house," Davis says.

The parents in the seven-kid family talked for hours about their priorities. In the end, they agreed that having enough bathrooms was their top goal, followed closely by enough bedrooms.

"If absolutely necessary, kids can double-bunk in bedrooms. But having people wait in line for a bathroom causes lots of friction in a household," Davis says.

After a lengthy search, the family found a sprawling one-level house with 3,600 square feet of living space, three bathrooms and six bedrooms.

"To get that big a house, they had to give up plans for an extra-large yard, as well as a formal dining room. But they refused to give up a good school system," Davis says.

Are you a home-buying family with lots of kids? If so, these pointers could prove helpful:

-- Don't judge neighborhood schools solely on test scores.

Few large families have the means to pursue a private- school education for their offspring. That's why finding the best available public schools is a key element in housing selection.

"Schools are a very big deal for families," says Dorcas Helfant, a real estate broker and former president of the National Association of Realtors (www.realtor.org).

Though it's easy to compare schools on the basis of standardized test scores, which can typically be found online, Helfant urges parents to visit neighborhood schools before judging them.

"The quality of instruction and the atmosphere matter even more than test scores. To learn more about the intangibles, talk to teachers and administrators." She also suggests talking to local residents about the schools.

-- Consider reducing your expectations on yard size.

Helfant says some parents, nostalgic about the capacious yards of their childhoods, automatically think their kids need the same sort of setting to thrive. But she suggests they rethink that notion.

"Kids today have an awful lot of structured time. They go to sports, dance, judo and piano lessons. There's not a lot of time left over for free play in the backyard," Helfant says.

She believes neighborhoods where yards are relatively small can be friendlier than those with much bigger lots, especially if the houses have front porches and sidewalks that encourage interaction.

-- Select a floor plan that serves your family's lifestyle.

When homebuyers think of a formal dining room, they think of Thanksgiving and other rare times when relatives gather for a feast. But Davis says for most large families, it's more important to find a house with ample space for casual living.

"If you have to make trade-offs, and most people do, let go of both a formal dining room and living room. Instead, shop for that eat-in country kitchen that flows directly into a large family room," he says.

For time-starved families with working parents, the advantage of this combination space is that it encourages family members to spend time together, while the parents are cooking and the kids are doing homework or playing games on the computer.

-- Seek a property with as many bedrooms as you can afford.

Second only to plenty of bathrooms, current homebuyers with kids want as many bedrooms as they can afford, and builders are now acknowledging this wish in their floor plans, Helfant says.

Children naturally prefer their own bedrooms. But if necessary, Helfant says that most kids will either wedge themselves into a small room or agree to share a room. Still, it's wise to make sure that parents have a spacious suite of their own with a private bathroom.

"In big families, parents need a private retreat --particularly once their children become teenagers. It's only good design for parents to have their own space," Helfant says.

-- Don't rule out a house with two or more stories.

Many contemporary homebuyers seek a one-level home. Middle-aged buyers with increasingly arthritic knees dislike stairs. And many seniors have ailments that make it hard, if not impossible, to climb stairs.

Even so, Helfant says it's sensible for big families with young children to consider the advantages of living on two levels. That's because it's easier to contain the noise and mess generated by the kids if their bedrooms are separated from the family's common areas.

With a two-story house, parents can entertain guests on the first floor while the kids sleep on the second floor.

"The reality is that lots of folks like to send their kids to bed upstairs so they can enjoy a little solace at the end of a long day," Helfant says.

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