Smart Moves

Six years ago, a retired librarian decided to sell his handsome craftsman-style house with its wide front porch. His plan? Downsize from a Kentucky suburb in favor of a condo in downtown San Diego near the home of his twin granddaughters.

But fast forward to 2024 and the man -- a self-described bibliophile -- is still sorting through his vast collection of novels. Last spring he finally engaged a real estate agent. But his house remains so crowded with books that potential buyers can’t imagine living there. Hence, it simply languishes unsold -- delaying the librarian’s dreams.

Kristin Bertilson, an Oregon-based professional organizer, doesn’t know the librarian in this true story. But she says his odds of selling without deep discounts will remain poor until he mobilizes to remove most of the books from his house.

“The worst thing you can do is stay stuck,” says Bertilson, whose company has assisted several thousand wannabe home sellers with clutter issues.

During the pandemic, when there were few available houses on the market and bidding wars were the norm, many buyers might have overlooked clutter. But as the volume of available properties expands, owners must now do more to accommodate purchasers.

Bertilson, who’s affiliated with the National Association of Productivity and Organizing Professionals (napo.net), says many would-be sellers find it extremely tough to plow through their superfluous belongings to clear a house.

“People find it a very daunting, emotional experience to let go of possessions, because they’re all connected to people in their lives. But I try to help clients view the process more objectively,” Bertilson says.

For example, she says many downsizers need to go through piles of children’s art. To reduce the volume, she suggests they apply objective standards. For example, they might decide to keep all the pieces with their kids’ handprints but toss out craft projects that are falling apart or hard to store.

She also helps clients downsize by encouraging them to confront the true costs of shipping their belongings to the new location -- a sobering realization.

“When people get an estimate of $1,200 to move furniture, they find it easier to let go of all the excess pieces. They might take only really sentimental items, such as heirlooms, and give the rest to charity,” Bertilson says.

Mark Nash, a longtime real estate broker, urges home sellers to undertake the home purging process as soon as they know they’ll be moving. That’s because a decluttered home is much more appealing to buyers.

“You’ll have to pack up anyway when you move. So why not do your editing before you list your place rather than after you move?” says Nash, author of “1001 Tips for Buying and Selling a Home.”

Here are a few pointers for downsizing sellers:

-- First determine the scope of your clutter problem.

Some downsizers try to grapple with the decluttering process without a plan. But those who do a preliminary inventory are more efficient, says Dorcas Helfant, a past president of the National Association of Realtors (nar.realtor).

“Sellers who have a room-by-room picture of all their possessions can make faster decisions about how to streamline it all,” she says.

Your listing agent can assist in deciding which items should be removed to make your home show-worthy. These will likely include some bulky furnishings, like recliners.

“A house filled with furniture can look a lot smaller than it truly is. And no one wants to buy a house that seems crowded,” Helfant says.

-- Develop a plan of action.

Nash says those who are most efficient at decluttering follow a step-by-step action plan.

As a beginning step, he recommends you plot the space in your new property before deciding on the volume of items you can take with you. This assumes, obviously, that you’ve already selected your next home.

More than a decade ago, Nash left a 3,200-square-foot bungalow for a 760-square-foot condo -- requiring him to drastically reduce his total belongings. To gain a more precise estimate, he bought graph paper and plotted the layout and storage space available at his small condo.

“The drawing allowed me to plan a place for everything I expected to take with me, down to my bike and favorite clothes. That made it clear which things would be impossible to keep in my new condo,” he says.

-- Undertake a systematic sorting of your accumulations.

During their years in a property, many homeowners unwittingly acquire a large array of similar items, such as tools and holiday decorations.

Early in the purging process, Nash suggests that sellers sort like items to determine which they have in excess.

Once you have the like items in each room categorized, use what Nash calls the “three-box system” to cull through them efficiently. One box should be labeled “keep,” a second “give away or sell” and a third “I don’t know.”

To hasten the process, immediately make arrangements to have your “give away or sell” items carted off. This allows you to create more space to sort through possessions from the “I don’t know” box that will require more consideration.

“Decision making is what slows people down. But you’ll make decisions a lot faster if you have fewer items to look at,” Nash says.

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

Potential homebuyers are getting increasingly annoyed about what they consider unreasonably high housing costs. That’s why more are backing out of deals they already cut.

“We’re seeing nightmare scenarios, where deals are getting canceled at the last minute for the most minute reasons,” says Rafael Corrales, a Redfin real estate agent in Miami.

Across the nation, "nearly 56,000 home-purchase agreements were canceled in June, equal to 14.9% of homes that went under contract that month," Redfin reports. Florida was especially affected, with 17.6% of deals canceled in Miami alone in June.

How can purchasers exit a signed deal? “Buyers often back out during the inspection period because they find something they don’t like, but affordability is really the underlying issue,” Corrales says.

Although inventory levels are gradually rising, home prices have stayed stubbornly high in many neighborhoods across the country. Indeed, throughout the nation, the median home price now exceeds $442,000.

“Affordability remains stretched,” says Ivy Zelman, a stock analyst who tracks the housing industry for investors.

Given the currently breathtaking cost of housing, many prospective purchasers are choosing to wait on the sidelines, hoping for better buying conditions ahead, particularly if mortgage rates finally come down a bit later this year, as some economists predict.

Still, real estate agents point out that the costs of delaying a purchase indefinitely can be considerable, especially for tenants under pressure to renew their leases at higher rental rates.

“You’re rolling the dice if you wait too long to buy,” says Ashley Richardson, a longtime agent with Sothebys International Realty.

Are you a wannabe homeowner seeking to move forward later this year or by early 2025 rather than delay still longer? If so, these few pointers could prove helpful:

-- Schedule an in-person interview with a mortgage lender.

Financial studies show that people save more if they have a concrete objective in mind. But how can you make your home-buying goal more tangible?

Gerri Detweiler, a personal finance expert and author, says one way to reorder your priorities is to visit a mortgage lender to determine how much you could afford to spend on a property and how large a down payment you’ll need.

Once you’ve established your borrowing ceiling, Detweiler recommends you embark on a very limited property search by stopping by a few open houses in the neighborhood you’ve targeted.

“So long as you’re still saving, you shouldn’t go on a big home shopping tour because you could fall in love with a specific home before you’re ready to buy. But getting a quick overview of the market can prove highly motivating to help you save,” she says.

-- Reconsider your current spending habits.

Celia Brugge, a Tennessee-based financial planner, says Americans slip easily into temptation when it comes to discretionary purchases.

“It’s easy to fall into impulse purchases for clothing, shoes or electronics. And eating out is a huge category,” says Brugge, who’s affiliated with the National Association of Personal Financial Advisors (napfa.org).

Brugge urges anyone trying to embark on a savings program for the purchase of a home, or any other major financial goal, to first go through what she calls “the boot-camp period.”

During this initial phase, she suggests you do an inventory of where your money has gone during a recent three-to-12-month period. You can do this by reviewing the entries on your checking or credit card statements and then summarizing your outlays.

Many people use Excel spreadsheets to track their spending. Once you know where your money is going, it’s time to start making cuts in low-priority categories. To help exercise willpower against out-of-plan expenditures, Brugge encourages would-be buyers to give up shopping as a recreational activity.

She says many people find that low-cost social activities, like inviting friends over for a potluck dinner, to be more gratifying than recreational shopping. To stay on track and accountable for their spending, Brugge advises couples to set regular times, as often as weekly, to allocate 15 minutes or so to reporting to each other on their recent spending.

“It’s a huge problem when couples don’t tell each other what they’re spending,” she says.

-- Review your commuting expenses.

Detweiler says many people take their need for a late-model car or SUV as a given. But to save for a home of your own, you may need to downscale your expectations in this category, if only temporarily.

“Owning a new car is not a necessity, though some people treat it as one. And it can be a lot more costly to the budget than people think,” says Detweiler.

Ideally, those with a big savings goal will consider selling a vehicle they own and commuting by rail or bus until they reach their savings goal. Another option is to carpool with a colleague from work. Of course, working from home can save a bundle on commuting costs, and remote work is often possible in this post-pandemic period.

-- Seek to reduce your insurance costs.

Insurance brokers and salespeople can be persuasive when encouraging clients to maximize their coverage. But Detweiler says would-be buyers should examine their spending in this domain. For instance, you might find a way to reduce the cost of your car insurance policy without compromising your core coverage.

“Shop around for insurance and also look into how much you could save by increasing your deductibles,” she says. (To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Since 2020, a couple of high school teachers in Colorado have been on a determined drive to amass a down payment to buy their first home. But despite extreme frugality measures, like cutting food costs to the bone --they’ve yet to reach their goal.

“Down payments have always been important, but even more so today,” says Skylar Olsen, chief economist at Zillow, the national real estate firm. She says a few statistics tell the whole story for average young families.

As she estimates, a down payment of $127,750 is what a household making the median income needs to put down when purchasing a typical U.S. home -- valued at about $360,000 -- so that their monthly mortgage payments take up no more than 30% of that household’s monthly income.

According to Olsen, an increasing number of young buyers are seeking assistance to finally get their foot in the door of a first property.

“Saving enough is a tall task without outside help -- a gift from family or perhaps a stock windfall. To make the finances work, some folks are making a big move across the country, co-buying or buying a home with an extra room to rent out,” she says.

Of course, each year many young adults do achieve a first-home purchase, even in popular neighborhoods where available properties remain scarce and prospective buyers abound.

One important factor determining who succeeds is how an offer is crafted once the right property is found. Here are a few pointers:

-- Show your love for the house that you want.

When making a fair offer, how can you convince the sellers that you’re sincere? Sid Davis, a real estate broker in Utah, says his clients have gotten results by attaching a brief handwritten note to introduce themselves to the sellers.

“Home sellers are much more likely to warm up to people who appreciate their property. It’s an art form to convince the owners you’re not just a ‘grab and run’ opportunist, particularly now that investors are coming out of the woodwork,” says Davis, the author of “A Survival Guide for Buying a Home.”

But Michael Connerly, the author of “How to Win With Real Estate,” cautions buyers against writing long or flowery letters to owners.

“[T]here’s always the risk that the sellers will get the impression you’re trying to manipulate them or take advantage with a lowball offer,” says Connerly, who worked as a real estate broker for more than 17 years.

-- Always attach a preapproval letter to your offer.

Because sellers are beginning to outnumber buyers in an increasing number of areas, some purchasers see no point in bothering to obtain preapproval for mortgage financing. But bargain-minded buyers know better, says Tom Early, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org).

“In the present market, you absolutely want preapproval to remove all doubts in the seller’s mind that you’re qualified,” Early says.

Granted, those with tarnished credit or checkered employment situations always face a big challenge when seeking to secure home financing. But if you have a steady job, reasonably good credit and a minimum of debt, your odds of obtaining a mortgage preapproval letter from a reputable lender are still very good, Early says.

-- Never surrender your right to a home inspection.

While it’s true that a condition-free offer is a stronger bid, Early urges you not to waive your right to make your purchase contingent on a satisfactory home inspection.

“I tell my clients that either you have the house inspected or face the prospect of buying a pig in a poke,” Early says.

In most cases, home inspectors find only minor problems, such as leaky faucets, shaky stair railings or a malfunctioning doorbell. These issues are soon resolved at the owners’ expense, and the deal goes through as planned.

“But sometimes, inspectors find catastrophic problems -- like a serious issue with the foundation or a major problem with the home’s electrical system. With a discovery like that, you’ll want the right to walk away from the deal,” Early says.

-- Face the reality that timing is critical to the highly motivated seller.

Whether or not sellers accept an offer, especially a low one, often depends on how much pressure they’re under to sell, Davis says. Obviously, those in a rush are usually more willing to entertain a lowball bid, even if it means making a counteroffer to bring up the dollar amount.

One retired accountant was a case in point. Once she reached her late 60s, she lacked the energy to keep up her elaborate landscaping. So, when a condo-apartment came up for sale in a retirement community where several friends lived, she immediately snapped it up. By the time the young couple came along, however, her house had languished unsold for months, and she was in a financial pinch.

“Of course, she didn’t get as much money as she’d hoped for her property. But she was delighted at the chance to sell to nice people and move on with her life. So, in the end, this was a win-win deal for everyone concerned,” Davis says.

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