Smart Moves

This summer, two houses on the same suburban street went up for sale on the same day. One -- a farmhouse style property with few updates -- sold within a week for the full list price. The other -- a stately colonial with numerous luxury improvements -- still languishes unsold.

Why did one property fly off the market while the other seems to scare away buyers? Eric Tyson, a personal finance expert, says the difference was undoubtedly that one was priced correctly from the outset, while the other was overpriced.

"Overprice your place and it can easily get a tainted reputation," says Tyson, co-author of "House Selling for Dummies" and other real estate books. "People will start asking what's wrong with that house? And the number of showings will slow down or come to a complete halt."

He says the sellers of the colonial house in this true story are now being punished for trying to push their opening list price above what comparable properties in the same neighborhood have fetched in recent months.

"Against the advice of their listing agents, a fair number of sellers engage in what's called 'needs-based' pricing," Tyson says. "Rather than face reality, they price for the net dollars they want for retirement or to buy a better house.

Here are a few pointers in regard to pricing:

-- Acknowledge the importance of proper pricing.

Tom Early, a long-time real estate broker, says that even in hot neighborhoods, the current generation of buyers is extremely price-conscious.

"Buyers today are no fools," he says. "They haven't forgotten the big drop off in real estate values that occurred during the financial crisis. So they take a very calculating approach when considering a purchase."

Despite tight inventories of homes available for sale in many communities, buyers will readily brush aside a property they perceive to be overpriced. Early says a real estate agent who recommends the true value of a property is an invaluable ally to owners in their quest to sell successfully.

"A house that's priced too high when it first hits the market can get a serious stigma and will ultimately go for less than it would have if fairly priced from the beginning," Early says.

-- Seek a general idea on value before engaging a listing agent.

These days there are multiple websites offering a free and immediate assessment of home values. One of the best known is Zillow.com.

Early cautions that such "fast pricing" sites can't be expected to yield a definitive answer on the value of your property. Still, they're a good starting point.

Another way to get a feel for prevailing prices before engaging an agent is to attend open houses in your community.

"It's always tremendously helpful to view directly how others in your same neighborhood have priced their property," Early says.

-- Meet with at least three real estate agents before hiring one.

When it's their turn to sell a home, many owners simply default to a trusted friend or relative who happens to be in the real estate business. But Early strongly advises against choosing an agent from your inner circle -- even if that person has sold many nearby properties.

"The reality is that it's hard for a friend or relative to tell you the unvarnished truth about market value or to advise you on changes you need to get your house sold," he says.

Even so, Early says your friends and relatives, along with neighbors, can be a good source for helping you create a short list of candidates to interview.

Ask each agent to give you a candid assessment on the condition of your place, as well as a pricing recommendation. Find out if they based their price suggestion on recent sales of comparable homes in the neighborhood and if so, which ones.

-- Ask for data on the agents' track records on pricing.

One way to size up the pricing aptitude of prospective agents is to examine a few key numbers that reflect their track record on prior sales. Of particular importance are "list-to-sale" statistics. These compare the original asking price against the sum ultimately paid by the buyers.

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

"There shouldn't be much difference at all if the agent hit the target right from the start," Early says.

-- Don't go into denial on a well-grounded assessment of your home's value.

Some sellers are convinced that real estate agents are inclined to recommend a low price in hopes of scoring a quick sale. But Early says the greater risk is that an occasional agent will push for too high a price in hopes of attracting your business.

"Most listing agents deal honestly and won't try to sweet talk you to capture your listing. But watch out for those few who would take you down a primrose path," he says.

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

With the oldest baby boomers now approaching their 70s, demographers say the number of homeowners who are downsizing is expected to climb in coming years.

"All five of my last home sales involved downsizing boomers," says Sid Davis, a veteran real estate broker.

Davis, the author of "A Survival Guide to Selling a Home," tells the true story of one of his clients, a widow of 69 who, due to medical problems, must sell her 3,500-square-foot house on one-third of an acre. The widow and her family plan to work off a checklist of pre-sale tasks provided by Davis.

To ease the strain of their parents' transition, he urges the offspring of downsizers to step in with assistance as early as possible -- especially if a sudden health setback is prompting the move.

"A short deadline compounds the problems of getting the house sold. That's why I advise clients to tackle the matter as soon as their elders want or need help," Davis says.

Diana Gaydon, a broker who specializes in helping seniors, recommends that sellers line up appointments with three potential listing agents as soon as a move is planned. She also advises that you select a kindhearted agent who provides personal attention to clients.

"Your parents need to have a gut level of comfort with the agent they choose," says Gaydon, who holds the designation of Seniors Real Estate Specialist, conferred by the National Association of Realtors. (For a local referral, go to www.seniorsrealestate.com.)

Here are a few pointers for the adult children of downsizing elders:

-- Honor your parents' deep attachment to their home.

Some couples, including those with a history of corporate transfers or military postings, find it relatively easy to ready a home for sale. But those who've stayed put through their retirement years typically have a tougher time letting go of their belongings.

"If your parents have been accumulating possessions for decades, you can't expect them to dispense with all that stuff in a hurry. Remember they want to make their own decisions for as long as they possibly can," Davis says.

While a senior's family members can be very helpful with many aspects of the housing transition, Davis says it's unwise for them to become involved in the de-cluttering work itself.

Ideally, he recommends that the parents engage the help of a professional organizer, assuming they can afford it. One source for local referrals is the National Association of Professional Organizers. (www.napo.net). For a lesser fee, (perhaps $10 to $15 an hour), they could likely find an energetic student by posting a local ad.

-- Don't pressure your parents to let go of valued items.

Real estate agents say personal items shouldn't be on display during showings, because that makes it hard for buyers to picture themselves living in the property. Even so, sellers shouldn't be cajoled into dispensing with prized possessions.

Gaydon says that in addition to photographs, many downsizers find it comforting to retain a few well-used pieces of furniture, such as the dining room table on which they served Thanksgiving dinners for many years.

To help smooth the transition for your elders, guarantee you'll safeguard their valuables during the home-showing period, Gaydon says.

"For example, you might tell them you'll take those coveted photos they have hanging on the wall and place them in a nice box on your piano until their house is sold," she says.

-- Show sensitivity when helping parents sell belongings.

Conducting a garage sale to eliminate excess household items might sound like a good idea. But the aggressive behavior of some who frequent such sales can be unnerving. Your parents might be hurt if they overhear strangers haggling over items they've used for years.

Rather than holding a garage sale, Davis recommends you ask your parents for the names of their favorite charities and arrange to have their giveaways taken there. (Valuable antiques and art can be sold through a dealer or an online company such as eBay.)

-- Use tact when discussing needed updates to your parents' property.

Those who've lived in the same home for a long time are often very comfortable with its decor, no matter how dated. But their grown kids typically agree with the listing agent that the home should be updated to more contemporary standards before it goes on the market.

The problem is you could face lots of pushback if you try to press your parents into replacing their still-functioning chocolate-colored refrigerator, for example. Likewise, they might rebuff you if you demand they have their 20-year-old lime-green carpeting torn up and replaced with fresh carpeting in a neutral beige.

Instead of trying to pressure your parents into updates to receive greater proceeds from their property, try reasoning with them. Then if they still refuse, back off.

"It's not worth risking the happiness of the family to get more dollars from a sale," Davis says.

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

If you've lived in a cramped apartment for years, your sense of excitement is likely palpable as you start the search for your first home.

But real estate specialists caution first-time homebuyers against making a hasty decision.

"The odds are that every single-family house you visit will seem huge compared with your apartment," says Tom Early, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

"It's not inconceivable you'll find the absolute right house on your first outing. But before you commit, you'd better compare and contrast your options," Early says.

He suggests all purchasers consider resale potential before making a property selection.

"As they move across the age spectrum, young adults are very likely to make a second and third home purchase. That's why they must be super aware of resale values," Early says.

Here are a few pointers for buyers:

-- Look for a community that should appeal to future buyers.

A poll recently conducted by the National Association of Realtors and Portland State University offers clues about emerging homebuyer preferences. The survey found that young adults age 18 to 34 strongly favor living within walking distance of shops and restaurants. They also favor short commutes and public transit.

"If you can afford a house in a vital, walkable urban area or town center, more power to you. You'll be investing in a place that's likely to hold its value or appreciate nicely in the future," Early says.

-- Seek a place with your future lifestyle in mind.

First-time buyers sometimes make the mistake of expecting to keep their property for just a few years before moving on.

But Early, a longtime real estate broker who specializes in helping buyers, strongly advises clients to buy with a time horizon of at least five years, due to the high transaction costs associated with selling one house and moving to another.

Young buyers should also consider their personal plans when selecting a house.

"If you're thinking of having kids in the near future, for instance, it's a good idea to pick a house with extra bedrooms and play areas," Early says.

Even if you end up not having children, choosing a property suitable for a family with kids will help increase buyer interest when it's your turn to sell.

-- Resist the lure of an offbeat property.

"You don't want to buy a contemporary in a neighborhood full of colonials," says Mark Nash, author of "1001 Tips for Buying and Selling a Home."

The problem with what Nash calls "the odd-man-out house" is that it could be hard to sell when the time comes.

"We live in a society where housing is increasingly homogenized. Most people feel safer about their investment if the place they buy looks like all their neighbors' homes," he says.

-- Create a list of priorities to better evaluate your housing choices.

"Nearly everybody has to make trade-offs when they buy a home," Early says.

Early's more than three decades of experience have taught him that purchasers who write down their priorities are less likely to err.

Before you go home shopping, Early encourages you to compose two lists. One should itemize "must have" home features and the other should be a "wish list" including features you could live without if trade-offs must be made.

-- Don't buy the biggest house in the neighborhood.

Some buyers are unaware that it's a bad idea to choose one of the biggest houses in a neighborhood. But Early explains that the so-called "king on the hill" house is unlikely to gain as much value as an average-sized place in the same area.

Granted, the biggest house will likely appreciate --assuming it's located in a popular area. Still, its owners will get less of a boost in value on a per-square-foot basis than will the owners of a smaller house. That's because the median home will set the standard for the area.

-- Make your home inspector's report part of your home-selection process.

An increasing number of buyers are covering the cost of a professional home inspection to help identify potential defects in the property they've selected. Realtors applaud this trend and generally support the involvement of independent home inspectors.

But agents also note that occasionally first-time buyers will go forward with a home purchase despite an inspector's report that outlines worrisome faults.

Early says that buyers who encounter major problems with a property, such as trouble with the foundation or unsafe electric wiring, are often well advised to simply walk away.

"You've got to let go emotionally of any house that's a serious fixer-upper—unless you're extraordinarily handy," he says.

-- Resist pressure to make a hasty decision.

As Early says, a good real estate agent will listen attentively to buyers when they express housing needs and preferences. The agent should also show diligence in pre-screening properties that seem well suited to the buyers' needs.

But buyers should be wary of any agent who tries to pressure them to take a particular house, especially one they're ambivalent about.

"The right agent is one who respects your time, your money and your priorities," Early says.

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