Smart Moves

Home improvement is a $300 billion business in America. Yet many sellers do a lot of head scratching when they need to hire a plumber, electrician, painter, carpenter or roofer to get their property prepped for market.

"Most people don't know where to turn to find the right contractors to get their walls repainted or their leaky faucets fixed without paying too much or waiting too long," says Eric Tyson, co-author of "House Selling for Dummies."

Tyson says it's a rare house that doesn't need some level of help from contractors before it's put up for sale. Problems that should be addressed could include such relatively minor tasks as replacement of a non-functional doorbell or such complex ones as new roofing.

But getting a good contractor can often take time. He recalls that a four-day fence installation job in his backyard wound up taking six weeks because of the contractor's busy schedule.

He urges sellers to exercise caution when hiring contractors to do their pre-sale work. Here are a few tips on avoiding snags:

-- Ask for a list of contractor referrals from your listing agent.

Chances are the agent you engage to list your home will maintain a lengthy roster of reliable contractors. Included should be a range of service providers, from carpet installers to landscapers.

Such lists can be a valuable resource for home sellers.

"Granted, the contractors recommended by your agent aren't necessarily the cheapest guys in town. But they probably have proven track records and can likely get the work done within your deadline," Tyson says.

Contractors who work closely with real estate agents do so because agents represent a steady stream of repeat business. This gives the sellers who hire them more clout.

"What the contractor realizes is that if he does a terrible job, he could be removed from the agent's roster. Naturally this should help keep him in line," Tyson says.

-- Make sure any contractors you're considering have time for your job.

To avoid getting squeezed out of the contractor's schedule by larger jobs, Tyson says you'll also want to be sure any company you're considering isn't overbooked. You'll also want to know who exactly will be performing the work.

"You might be very impressed with the person who comes to the door the first time. Then you soon realize this was just a salesperson and that the people doing the actual work are not as capable. This can be extremely disappointing," Tyson says.

-- Communicate clearly with your contractors.

Stephen Carpenter-Israel, a real estate broker and president of an independent realty firm, recommends that home sellers have a serious, face-to-face conversation with any contractor they plan to hire.

To make sure your expectations are fully understood by the contractors, at your first meeting present them with an outline of the work, including any relevant details.

"This written statement can serve as an informal agreement that the contractor can sign and which establishes expectations in advance for jobs of a limited scope," Carpenter-Israel says.

-- Get all your contractor's promises in writing.

Tyson says that all too often homeowners make agreements with contractors based on verbal guarantees. There's no substitute for a written contract that covers all the key elements of the project, including price, timing and scope.

Because the prompt completion of work is essential to your success as a home seller, Tyson suggests you insist on financial consequences for a missed deadline.

"It's often prudent to include small incentives if the work is done on time or early and penalties if it's done late," he says.

You'll also want to incorporate into your agreement language indicating that the contracting firm guarantees its work and carries all the proper insurance coverage on its employees and subcontractors.

-- Don't allow contractors to cut corners on government inspections.

Obviously, not all home repairs or upgrades require your contractor to obtain a government permit and an inspection to ensure that the work complies with local codes. For instance, your electrician probably won't need government oversight to change light fixtures and your plumber likely won't require it to replace a broken water heater.

Major projects may be different, however. Examples could include the installation of a new bathroom or deck.

Perhaps you think you'll get a better price from a contractor who asks to circumvent government requirements. But Carpenter-Israel says that skirting the law can be risky, especially for those with plans to sell who could face legal problems later.

"Otherwise, you'll have no means of recourse," he says.

-- Refuse to cover the entire cost of the work from the outset.

Partial payments to a contractor are sometimes appropriate before work has begun, especially when significant material costs are involved.

For instance, you're likely to be asked to make a down payment on a carpet installation job. And your house painter might reasonably request that you cover the expenses for paint, rollers and brushes before work begins.

But Tyson says there is no justification for covering all labor costs on any home improvement project before the work is satisfactorily completed.

"It's a massive mistake to pay for the entire project at the start. If you do, you give away all your bargaining leverage should the contractors botch the work and need to do it all over again," he says.

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

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.)