Smart Moves

Despite escalating prices, available homes in popular neighborhoods have been “flying off the market” in recent months, according to the National Association of Realtors (realtor.org).

Lawrence Yun, the association’s chief economist, blames the “pitiful” shortage of available homes on a serious imbalance between the supply of properties and demand for homeownership.

“The glaring need for more new home construction is creating an affordability crisis that needs to be addressed by policy officials and local governments,” Yun says.

So, what are wannabe purchasers to do if they’re seeking to buy in a tight-inventory market? Fred Meyer, a consumer advocate and real estate broker, recommends they consider homes that have languished for longer than the typical selling time.

More than 80 percent of the time the only reason houses sit unsold for a lengthy period is because they’re overpriced, says Meyer, who heads a firm selling homes around Harvard University.

He says that in some cases, buyers can convince the owners of an overpriced house to negotiate a lower price through a thoughtful and well-reasoned letter.

“First, tell the sellers all the things you like about their property. Then, also include listings for comparable homes that have sold recently for market value,” says Meyer, a certified real estate appraiser.

Sid Davis, a real estate broker and the author of “A Survival Guide for Buying a Home,” says savvy buyers realize that some “shopworn” properties represent opportunities. This is especially likely if they’re dealing with sellers who must move.

“The longer a house is on the market, the less it sells for. That’s one of the tenets of real estate,” Davis says.

Here are a few pointers for buyers:

-- Familiarize yourself with property values in your area.

To navigate a seller’s market with confidence, Davis says buyers need to educate themselves on property values in the area where they’re searching.

Very often, the owners of a stale property that was overpriced from the beginning will ratchet down the price in incremental drops. The key for a prospective bidder is to know when the sellers are approaching a realistic price point.

“You and your agent need to do a thorough analysis of the market so you’ll have a good feel for the true value of any house you like. That way, you won’t be flying blind when you venture a bid,” Davis says.

The key to determining market value is to examine closely the data on recently closed home sales on similar properties -- known as “comparables,” or "comps."

“Make sure your agent shows you very recent comps that are really similar to the house you want to buy,” Davis says.

The more knowledgeable you are, the less likely you’ll be to overpay.

“When deciding how much to bid on a stale listing, don’t focus on the list price. Instead, orient your offer to what the market is really paying for that kind of house in that neighborhood,” Davis says.

-- Ask your agent to put you on alert to price reductions.

Stephen Israel, a real estate broker affiliated with the National Association of Exclusive Buyer Agents (naeba.org), suggests you track an overpriced property closely, waiting for the owners to take a price cut that brings it closer to its true market value.

To stay alert to potential pricing changes for the property of your choice, Israel recommends you ask your real estate agent to keep you constantly updated by email or text.

“Ideally, you should be kept informed on a daily basis,” Israel says.

Also, you can sign up for automatic email alerts from a real estate data company such as Trulia.

-- Present sellers with an offer they’ll find especially appealing.

Gregg Busch, the vice president of a mortgage lending firm, urges buyers to present the sellers of a stale property with a bid that addresses their need for a sure and urgent sale.

“To get the best possible price, you need the strongest possible offer, which shows that you could really go through with your proposed deal,” Busch says.

How can you make your bid stand out from others the sellers may receive? One way is to obtain a convincing letter of “pre-approval” from your mortgage lender.

Also, he recommends you propose a quick closing date in your offer. That should make your bid especially appealing to the owners of a stale property, particularly one that’s gone vacant after its owners moved away. Remember that even sellers who’ve paid off their mortgages and left town must meet their utility and upkeep costs, along with tax bills.

-- Offer a timeline in sync with the sellers’ preferences.

Are you focused on a particular property whose owners have finally taken a major price reduction after the place has lingered on the market for a long time? In that case, you may be tempted to come in right away with a low bid.

But Israel says it’s often wise to wait at least one or two weeks before venturing your bid on a stale property. That’s because typical sellers will wait a while after cutting their price before entertaining an offer.

“Of course, there are always exceptions. If you’re really in love with the house and think the sellers are finally realistic on price, don’t wait any longer. Bid right after the price drop or you could risk losing your dream house to another offer,” Israel says.

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

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.)