Smart Moves

By the time a successful lobbyist and his wife, a nurse, reached their 70s, they’d acquired many of the prizes that come with prosperity: an opulent house and a nest egg large enough for a plush retirement. Yet, in their upscale neighborhood they felt isolated, alone and unhappy. So they searched for a place with more of a community feel.

Ultimately, the couple sold their suburban manse and bought a two-bedroom unit in a newly built retirement community that made social interaction a priority. This banished the couple’s feelings of loneliness.

The AARP Foundation, the Washington, D.C.-based nonprofit group, says social isolation is a major challenge for Americans. To help tackle the problem, it recently launched a new program to help older people connect to others in their area through resources for housing, transportation and volunteer activities. It’s called Connect2Affect.

“Social isolation is a complex problem, one that desperately needs our attention,” says Lisa Marsh Ryerson, the foundation’s president.

It’s not only those over age 50 -- AARP’s target audience -- who benefit from life in a friendly community. People of all ages, including young families, enjoy the sort of friendships that can bloom in welcoming neighborhoods, says Helen Dennis, an expert on psychologically healthy living at the University of Southern California.

“Isolation is much more of a problem than it was 10 years ago. It’s especially easy to feel isolated in metropolitan communities,” Dennis says.

Many homebuyers believe that moving to a suburban community with expensive houses will necessarily give them a warm, welcoming neighborhood. But that’s not always the case, says Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home.”

Because there’s no simple formula for finding a friendly neighborhood, Nash urges homebuyers to thoroughly investigate before making a move. Here are a few pointers:

-- Don’t rule out moving to a brand-new development.

Are you interested in moving to a newly constructed community or condo tower, but fear it could prove an unwelcoming place? If so, Nash suggests you learn more about the community before rejecting it based on what could be an unfounded belief.

Granted, many condo buildings are populated by young professionals or busy two-income families. Still, many who move to these new areas are highly motivated to build lasting friendships with neighbors.

“They’re open to making new friends because they have few established relationships,” Nash says.

-- Look into the social dynamics of any neighborhood you’re considering.

Homebuyers who want a friendly, interactive community are well advised to spend some time there looking for less-than-obvious clues about how people relate.

“Even the most prestigious neighborhoods can have real issues,” says Nash, noting that just a few problematic residents can create issues for an entire community.

“It only takes a couple of curmudgeons to make everyone a little sour. A couple of intense ‘partyaholic’ guys could also spoil a neighborhood if they’re always drawing the husbands together for late-night poker parties where too much drinking goes on,” he says.

To learn more about the underlying social dynamics of a community, don’t hesitate to go door-to-door and strike up conversations with residents, or talk to local shopkeepers. Ask them about the pros and cons of living in the area.

-- Visit a community you’re considering on multiple occasions.

Nash suggests that those with a strong interest in a community visit the area at varied hours to look for patterns of human behavior. Also, consider visiting on a weekday as well as the weekend.

“Walk or drive through the neighborhood four times in a day, during the morning, at mid-afternoon, at dinnertime and at 11 p.m. Notice whether people are relating to each other or staying holed up in their homes nearly all of the time,” he says.

In some neighborhoods, residents are superficially friendly yet don’t build in-depth relationships with each other.

“Perhaps you’ll see people out walking their dogs who smile and wave to each other. But they seem too busy to stop and communicate,” Nash says.

-- Never forget that friendship is a two-way street.

Those with a support structure within the immediate radius of their home have many advantages. Not only can they borrow the cup of sugar they need to finish that batch of cookies they’re baking, they can also find neighbors to help ensure the security of their home while they’re away, for example. Most importantly, they can count on help in an emergency situation.

“Suppose there’s a flood in your area while you’re on vacation and you need urgent help until you can fly home,” Nash says.

But as Nash stresses, moving to a friendly neighborhood won’t guarantee that you develop a strong support structure -- unless you invest time and energy in creating positive relationships that are genuinely give-and-take. You need to socialize during times of celebration as well as in times of need.

“All good relationships -- and that includes relationships with fellow residents -- must be reciprocal if they are to be strong and enduring,” he says.

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

A couple in their late 50s, a teacher married to an accountant, experienced a double whammy medically. To survive financially, there was only one solution: sell their sky-blue bungalow in a hurry and then move to a modest apartment.

But selling the property brought challenges. Though located in a neighborhood coveted by first-time buyers, the house had fallen into disrepair. Due to their high medical expenses, the couple couldn’t afford the extensive renovations the bungalow required.

How did the couple cope? They engaged the services of a savvy real estate agent who drew up a list of top priorities to make the most of their “as is” sale. These involved cosmetic fixes, such as interior painting and new carpet, where the return on investment is typically high. The result was a successful sale with multiple offers.

“Sellers with meager resources have an absolute need to set priorities. Ideally, they’ll use a checklist from a smart agent to stretch their dollars in meaningful ways,” says Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home.”

The good news for sellers under pressure is that these days it’s relatively easy to sell a “fixer-upper,” especially if it’s a starter home. That’s because there’s still a severe shortage of homes available for first-time buyers in prime areas.

What’s more, there’s no expectation the supply-demand problem will be resolved anytime soon, according to Daren Blomquist, a senior vice president at Attom Data Solutions, which tracks real estate markets throughout the country.

Because of price increases and a scarcity of available homes, he contends that now is an excellent time to sell in most areas, even for properties that must be sold in as-is condition and under a short deadline.

“It’s truly a great time for sellers, even if your property is distressed,” Blomquist says.

Here are a few pointers for those who must sell under pressure:

-- Rely on low-cost improvements you can do yourself.

“It’s unbelievable the bad reaction people have to a house that’s messy, one with empty pizza boxes on the coffee table and clothes lying around everywhere,” says John Rygiol, a longtime real estate agent.

Through his years selling real estate, Rygiol has observed buyers’ reactions when they visit a clutter-ridden home.

“Those who can’t do the work themselves should locate people in their community to assist,” he says.

Claire Prager, a veteran real estate broker affiliated with the Council of Residential Specialists (crs.com), advises medically challenged sellers to search for volunteers by looking on the internet for a support group, such as a cancer survivor network, or a nearby faith-based organization.

As you embark on a cleaning and de-cluttering blitz, she recommends you focus first on removing excess furniture and personal items that make it hard for those viewing your place to picture themselves living there.

“I’m talking about all those photos and notes attached to your refrigerator with magnets and all those many family mementos. Get all these items packed up and put away in a storage area, such as your garage,” Prager says.

-- Seek a listing agent with staging skills.

The quest by sellers to get the most from a sale has spawned a new industry of “home stagers.” These are people hired to rearrange and supplement furnishings to make for-sale properties seem more appealing.

Nash says stagers typically charge at least $300 for a minor redo. But if you lack the funds to pay a stager, he suggests you look for a listing agent willing and able to provide such services without charging you a fee to do so.

“An increasing number of agents are trained in the art of staging, and some are getting very good at it,” he says.

How can you be sure that agents who claim expertise in staging will do a good job? Nash recommends you ask them to email you “before” and “after” photos of properties they’ve staged. Examine these pictures before signing a listing agreement with any agent.

-- Head into the market at the right price point.

Although it’s now a strong seller’s market, Rygiol says sellers are still better off pricing from the outset at the precise current market value of their property, or a notch below to attract bidders.

“Go around your neighborhood and look at For Sale signs as indications of the strongest and most successful agents in your area. Then call three of these top agents and ask them to come over and recommend a totally realistic selling price,” Rygiol says.

He says you shouldn’t necessarily select as your listing agent the one who suggests the highest list price of the three -- perhaps as a form of flattery. Rather, listen intently to their advice on how your as-is property should go on the market.

“Tell your agent you want to sell in 90 days or less, and ask what price and marketing plan will get that job done,” Rygiol says.

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

All across the nation, baby boomers age 60 and above are grappling with a thorny choice: should they renovate the family home or sell and downsize?

Downsizing sounds like the obvious choice because it frees the homeowners from the ordeal of renovating to make their property suitable for aging in place.

But aging in place also its advantages, says Jorie Johnson, a certified financial planner who heads her own company. For instance, it could allow owners to remain in a community where they have established relationships.

Johnson, a fee-only planner affiliated with the National Association of Personal Financial Advisors (napfa.org), tells the true story of a couple of retired clients who sold their family home and moved to a retirement community a 40-minute drive from their old neighborhood, where their grown children live.

“They thought the drive wouldn’t be a problem. But it proved a major impediment to seeing the children and grandkids,” Johnson recalls.

Johnson says a cash-out refinance could be the best choice for someone who’s willing to renovate to remain in the same neighborhood.

“The big upside for a lot of people is the ability to stay in your same community,” she says.

Here are a few pointers for homeowners seeking to renovate through a cash-out refinance:

-- Recognize that good credit still rules for lenders.

Though mortgage money for most borrowers is still available at very favorable rates, most lenders continue to adhere to stringent standards.

“Expect to jump through more credit hoops than you did when you first bought your house years ago,” says Keith Gumbinger, a vice president at HSH Associates (hsh.com), which tracks mortgage rates throughout the country.

Borrowers are still asked to explain blemishes on their credit reports, correcting flaws and inaccuracies when possible. Even seemingly minor dings, like an unpaid $179.01 balance on your cell phone bill, could hinder the processing of your loan.

Prudent borrowers closely examine their credit reports before applying for a home loan, Gumbinger says. Under federal law, each year you’re entitled to one free credit report from each of the three largest credit bureaus: Equifax, Experían, and TransUnion. Just go to this website: annualcreditreport.com.

In addition, you’ll want to access your “credit scores.” Such scores, which draw on data from the credit bureaus, provide lenders with a quantitative measure of a person’s credit risk. Most lenders still use FICO scores, pioneered by the Fair Isaac Corp.

Usually, you need to pay a fee to obtain your credit scores. One approach is to buy these through the Fair Isaac website: myfico.com. You can also receive credit scores through the three large credit bureaus. FICO scores range from 300 to 850.

“Now as much as ever, people with low FICO scores are punished and may have trouble getting a mortgage at any interest rate. But people in the 700s and above are rewarded with the best rates available in the market,” Gumbinger says.

Those who inform themselves on their credit history are better prepared to slide rather than stumble through the process of applying for a mortgage, he says.

-- Do lots of comparison shopping on rates and service.

One irony of the current mortgage market is that lenders are as eager as ever to make loans, even though their guidelines remain tight by historical standards.

“Because the volume of mortgage refinance is relatively low now, lenders are eager to do business,” says Mike Hummel, a mortgage broker in the business since 1997.

He urges those seeking to refinance to shop around, steering clear of lenders who might overcharge them. To do so, he recommends that all borrowers carefully scrutinize a lender’s estimate of fees and charges before committing to do business with that firm.

In this credit-conscious period, Hummel says those with high FICO scores -- ideally over 740 -- may be able to use their good scores as a bargaining chip for a slightly better rate, or reduced loan fees.

-- Try to reduce your debt burden before refinancing.

Does your household have multiple credit cards and more debt than you’d like? If so, remember that big minimum monthly payments on your plastic can limit your capacity to take out as big a mortgage as you’d like when you refinance.

Along with your FICO score, another key qualifier is your “debt-to-income ratio.” If you face high minimum payments each month, whether on credit cards, car payments or student loans, you may not be able to borrow as much as you want when you refinance.

As Gumbinger observes, one way to lower your monthly debt payouts is to move balances from your highest interest-rate credit cards to your lowest rate one. Alternatively, consider moving high credit card debt to an installment loan made through a credit union.

“Big debts are always a big problem when it comes time to borrow money,” he says.

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