Smart Moves

Sometimes people need to make a sudden change in their housing plans.

Take the true story of a couple in their early 60s, two elementary school teachers with grown children who'd planned to stay in their sprawling cedar-sided contemporary house indefinitely. Because they'd intended to remain in their high-end neighborhood through their retirement years, they'd spent most of their retirement funds to pay for a pricey addition that included a first-floor master suite.

But they got a wake-up call after their first session with a financial planner. To save for retirement, he strongly recommended they sell their expensive house and move to a modest place with smaller mortgage payments. The couple concurred, deciding to act immediately.

While many are reluctant to trade down, it can help you streamline your material life because you'll have to purge yourself of clutter to fit into a smaller place. And liberation from excess possessions brings a surprising sense of clarity for many people.

In a smaller home, you have fewer upkeep demands, including less yard work and housecleaning. And most importantly, freedom from high monthly mortgage payments can relieve a lot of stress.

Of course, as Ashley Richardson, a longtime real estate agent affiliated with the Council of Residential Specialists (crs.com) notes, there are also drawbacks to an involuntary home sale. You may need to leave a neighborhood where you've known people for years. Also, those who must sell for financial reasons often lack funds for the kinds of pre-sale fix-ups that would yield them the best possible price.

But no matter the hardships of having to sell suddenly, you'll fare better if you take a proactive approach. Here are a few pointers:

-- Don't let regrets stall your forward movement.

Sid Davis, a real estate broker and author of "A Survival Guide for Selling a Home" says many people with mortgage problems delay making the tough decision to sell their home, hoping a miracle will let them keep the place. But it's a bad idea.

"Time is definitely not in your favor," Davis says.

Perhaps the value of your home has slipped below the outstanding balance on your mortgage. This means you'll have to write a check at closing to complete a sales transaction, a step that could be worth taking as opposed to letting your lender foreclose.

"Most people who walk away from their home and let their property go into foreclosure find that their credit is ruined. That usually means they'll be barred for several years from purchasing another property, even a much smaller one," Davis says.

-- Visit communities where you could live after the sale.

One way to keep a positive outlook through an involuntary home sale is to begin investigating alternative neighborhoods where you might live, with the purpose of selecting the best option your pocketbook will realistically allow.

The main advantage of previewing communities early is that you'll have a tangible vision of where you're headed.

Even though Davis advocates that sudden movers start shopping for a new community as soon as possible, Davis urges them to resist the temptation to tour specific properties until a sale contract in hand.

"Why fall in love with that little vine-covered cottage before you're really free to buy it?" he says.

Yet by choosing your target neighborhood early in the process, you'll be prepped to immediately begin visiting specific homes in the new area as soon as the time is right.

-- Get to know residents in the community where you plan to live.

Even before you sell your current house, you can begin meeting people in your target neighborhood. As Davis says, developing a few fledgling friendships should help ease the emotional pain of your transition.

"It shouldn't be hard to get acquainted in the new area," Davis says. "One approach to making new friends is to volunteer for work with a local community group. Or you could attend services at a nearby church or synagogue."

-- Celebrate memories of a home where you've lived happily for years.

Davis says one good way to hang onto happy memories of your place is to stage a "farewell party" involving family and friends. Then during the party, take photos in your favorite settings.

Looking back at these photos should help you realize that those who truly care about you won't abandon you just because you must move to a less prestigious area.

"People forced to leave their mini-mansion for cheaper quarters should remember their core values and the people who matter most to them," Davis says.

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

A colossal nine-bedroom contemporary house is under construction in a popular semi-urban neighborhood adjoining a regional park. The 14,000-square-foot residence dwarfs the 1950s-era split-level next to it.

With so much space -- plus a four-car garage with a guest apartment atop -- one might imagine that the place was designed to house a large family. But the married couple building the house will live there with just three school-age kids.

And well-off young families aren't the only ones hankering for huge houses

"A lot of boomers hanker for that 'last hurrah' house," says Merrill Ottwein, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org).

A study by the American Enterprise Institute, a Washington, D.C.-based think tank, shows that even as the size of the average U.S. household shrunk between 1973 and 2014, the size of the average new home continued to rise.

"Most new home buyers of any age want as much square footage as they can possibly afford. Those seeking large custom-built houses are especially eager for a super kitchen, lavish bathrooms and huge walk-in closets," Ottwein says.

Depending on your circumstances, buying a very large property is either a solid long-term investment or an imprudent decision. Here are a few pointers for those pondering such a decision:

-- Make sure your financial house is in order before buying a big place.

Eric Tyson, an author and financial planning expert, says some who buy oversized homes do so without a careful look at the budgetary implications.

"If the bank says they're qualified for a mortgage on a big house, that's the end of their analysis," Tyson says.

For most buyers, even those with six-figure salaries, it's prudent to consider factors beyond those appearing on their mortgage applications.

"Your lender will never ask you if you've pledged to each year donate a large percentage of your income to your church or synagogue. Nor will your lender know if each year you take expensive ski trips to the Swiss Alps," Tyson says.

In addition, there's the obvious issue of your preparation for retirement. Have you saved a nest egg large enough to live comfortably in spite of the mortgage payments on a big property?

Tyson recommends that those considering a large home spend time projecting their future financial needs. Though he considers some online retirement income calculators overly simplistic, he finds others useful -- at least as a starting point. For example, he recommends the free financial planning tools available through such investment companies as T. Rowe Price (troweprice.com) and Vanguard (vanguard.com).

-- Take into account all the costs associated with ownership of a large home.

"Unfortunately, many people don't realize just how much it costs to maintain ownership of a really large house until after they've moved in," Tyson says.

Some big-home aficionados are willing to personally handle all the cleaning and small repairs involved in ownership of a big place. But there are also other expenses to cover.

"Keep in mind that you'll have to insure, furnish, heat and cool that property, as well as pay taxes on it," Tyson says.

-- Think through your assumptions about a big house as an investment.

Citing home value gains, the real estate data company Zillow (zillow.com) reports a continuing decline in the number of U.S. homeowners who owe more on their mortgage than their properties are worth. With fewer owners underwater, more can now consider selling and moving up to a larger property.

But Dr. Svenja Gudell, Zillow's chief economist, cautions prospective trade-up buyers to keep a lid on their expectations for future property value increases if they plan to buy in a metro area where prices are already high.

"A handful of markets ... are very hot right now, and it's possible home values may actually begin to fall somewhat in these places as more residents are priced out amidst affordability concerns, especially when interest rates rise," Gudell says.

No matter the market where you plan to buy or build an oversized house, Tyson says it's usually important to stay for at least five years to make it a worthwhile investment.

"In the past, many who've remained in their big houses for many years have been richly rewarded," he says.

-- Review your overall life goals before making a big home purchase.

Ottwein cites the example of a couple with six young children who could have afforded a spacious, high-end property, but chose not to buy one. Though qualified to buy a home with six or seven bedrooms, Ottwein's clients asked him to restrict their search to smaller places. In the end they picked a four bedroom, log cabin-style house with 2,400 square feet of living space.

"The house they bought was 50 percent smaller than what they could have afforded. But they wanted to use their spare cash to take their kids on educational trips abroad," Ottwein says.

Obviously, financial priorities are highly individual. For every couple who decide to buy a smaller home than their income allows, there are many willing to max out their spending on a showplace.

"If a really big, beautiful house is a top priority for you, and you've taken into account all the relevant financial factors, I say chase after that dream and make it happen for real," Ottwein says.

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

Before Eric Tyson and his wife had kids, they spent five carefree years living in a townhouse on a busy thoroughfare in a noisy, vibrant part of San Francisco. But after their twin sons were born, they traded this starter home for one in a tranquil Connecticut suburb.

Although the couple look back fondly on their San Francisco years, they also remember the difficulty they had selling their first house because of its intensely urban location.

"Some people aren't noise-sensitive and don't care if they live in a main road. But most people want to avoid the traffic, pollution and lack of privacy that comes with such a location. They also fear more crime," says Tyson, co-author of "House Selling for Dummies."

He cautions that those attempting to sell a property set on a busy artery must price realistically or risk having the place languish unsold on the market for a lengthy period.

The good news for sellers of well-priced homes is that many cash-strapped buyers in their 20s and 30s are now eager to exit their rental units. To shoehorn themselves into their first property, many must compromise on location to obtain an affordable place, says Svenja Gudell, the chief economist at Zillow, the online real estate database company.

Sid Davis, a veteran real estate broker and author of "A Survival Guide to Selling a Home," says empty-nesters may also appreciate more urban homes. They like a location that lets them walk to coffee shops, restaurants, grocery stores and movie theaters.

Also, he says some foreign-born buyers are less resistant to living on a main road than are those who grew up in this country.

Still, Mark Nash, author of "1001 Tips For Buying and Selling a Home" says it's not unusual for homes on major roadways to sell for at least 15 percent below nearly identical houses on quiet streets in the same area.

Here are a few pointers for those trying to sell a place on a heavily traveled road:

-- Select a listing agent who sees the positives about your property.

Nash tells the true story of a couple of young homebuyers who were eager to leave the apartment they'd been renting for years in downtown Chicago.

They pair fell in love with a Tudor-style house that met all their requirements, including a gourmet kitchen. It also had the large yard they were seeking for their puppy. But it was located on a heavily traveled road.

Nash says the couple pondered the pros and cons of the purchase for several days before agreeing with the listing agent who convinced them that its positives outweighed its negatives.

"A key selling point was the very reasonable price for this house," Nash says.

When selecting a real estate agent to list your roadside home, he says it's important to choose a diligent person who exudes confidence about your ability to sell, assuming you've agreed to price your home realistically.

"You want someone who will talk up your place and work really hard to get it sold," Nash says.

-- Make the most of the visibility of your property.

Traffic congestion has one advantage for the sellers of homes on busy roads. That's because their "For Sale" signs are more visible than those who are trying to sell their houses on less traveled streets in the same community.

With so many drivers passing by, you're bound to attract the attention and curiosity of many people. With this in mind, Nash suggests you ask your agent to attach "riders" to the main sign that focus on the positive points of your property.

"Pull people into your house with signs that point out, for example, that you have mahogany built-ins, a new gourmet kitchen, two fireplaces or any other bells and whistles," Nash says.

-- Highlight the accessibility of your home to commuters.

Even in areas where traffic congestion has stayed steady in recent years, many people still loathe their long highway commutes. The result is that relatively more commuters are now willing to live on major thoroughfares, assuming this will shorten their drive to work.

"People who have to get to work quickly ... are especially keen about quick highway access. This is one positive feature of living on a main road," Nash says.

Does your roadside home offer easy access to a popular light rail line or subway system? If so, you have an even stronger positive to highlight for potential buyers, according to Tyson.

"Many people hate driving to work. So if your location makes it easy to use alternate transportation and that public transit is of good quality, this could be a huge selling point in your favor," he says.

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