Smart Moves

The value of all U.S. homes is approaching $50 trillion -- exciting countless older Americans who can finally consider a range of fulfilling retirement scenarios they could now afford if they sold their houses.

Take the case of a 66-year-old accountant married to a therapist of the same age. The pair live in Milwaukee, but spend every free vacation day in Alaska, where they relish fishing, hiking and moose hunting.

“Since we bought our house in 1994, it’s quadrupled in value. The big pickup came during COVID. We still can’t believe our good fortune,” says the accountant.

Until recently, the couple assumed they’d simply age in place -- enjoying the comfort and familiarity of their lakeside contemporary. But their unexpected gain in value has given them new options. Their current dream is to exchange their Milwaukee place for a log cabin-style property in an Anchorage suburb near a nature preserve.

“We can’t wait to retire, sell the house and move to Alaska. But we think the window to maximize our sale and make this happy exchange won’t last forever. Plus, it’s obvious we’re not getting any younger,” the accountant says.

The accountant points to recent changes in the housing market. Mortgage rates, though unpredictable, have been trending downward lately. That’s encouraging more owners to sell and giving buyers more bargaining power. Meanwhile, listing prices are starting to fall in some metro areas, and more sellers are finding it necessary to make concessions.

“The rise in housing inventory is beginning to lead to more contract signings. Multiple offers are less intense, and buyers are in a more favorable position,” says Lawrence Yun, chief economist for the National Association of Realtors (nar.realtor).

But the Wisconsin couple are much less driven by economic data than by their emotional attachment to their lifestyle dream.

“We always ask ourselves, if not now, when could we ever make this Alaska move possible? At this stage of our life, this could be our last chance to make this big transition both in terms of our health and our finances,” the accountant says.

Stacy Berman, a longtime real estate agent in a Washington, D.C., suburb, doesn’t know the Milwaukee couple pining for an Alaskan log cabin. But she says an increasing number of boomer-age couples are just now tuning into the housing options their equity could give them.

“Until lately, many people who’ve owned their houses for 30 years or longer haven’t focused on moving. They’ve been stuck in place. What’s different now is that they’re starting to run the numbers, which opens their eyes to possibilities, like selling a house and moving out of state to live near the grandkids."

Here are a few pointers for boomer-age sellers:

-- Refuse to sell in “as is” condition.

Though equity rich, many older owners are relatively short on cash for presale repairs and cosmetic upgrades. Yet real estate specialists caution that skipping minor improvements can be costly to a seller’s net proceeds.

“Letting go of a house in poor superficial shape is almost universally an error, because most buyers, especially young buyers, can’t see past the surface problems,” says Eric Tyson, author of “Personal Finance in Your 50s.”

Tyson says cash-short sellers are typically better off taking a short-term loan to fund basic repairs and cosmetic improvements than letting them go.

Alternatively, you could consider using a low-interest-rate credit card or a traditional consumer installment loan from a community bank.

-- Acknowledge that minor kitchen renovations can pay off well.

“There are so many amazing things you can do in a kitchen for under $1,000,” says Sid Davis, a Utah real estate broker and author of “Makeovers That Sell.”

Among the worthwhile projects you might consider: adding new facings to your kitchen cabinets or sanding and repainting them in gloss white; replacing your floor tile; upgrading your countertops.

“It’s the most important room in the house for most homebuyers,” Davis says.

-- Redo your laundry room in minor ways.

“Laundry rooms are rising in importance for today’s homebuyers. The laundry room is no longer the afterthought it once was, especially in bigger and newer homes where they can get very fancy,” Davis says.

What are some inexpensive steps you can take to enhance the appeal of your laundry room? Davis recommends you consider hiring a carpenter to install built-in shelving. You can also repaint, replace worn flooring or upgrade the lighting in this area.

-- Realize the rewards of in-depth cleaning.

“(I)f people think your place is super neat, they’ll give you the benefit of the doubt. If it’s dirty, they’ll assume it’s ridden with hidden defects,” Davis says.

Are you unsure if your house meets the cleanliness standards required to satisfy the most fastidious of purchasers? Then Davis suggests you invite over one or more of your relatives and request a candid critique of areas that need further cleaning.

-- Complete your upgrades before putting your place on the market.

Some would-be home sellers who invest in cosmetic improvements assume there’s no need to wait until the work is done before inviting visitors in.

But Davis says showing your home as a work-in-progress can easily undermine your sale.

“When the contractors are still there with their drop cloths and ladders, people can’t picture just how good the finished product will be. Worse, they can’t envision themselves living there,” he says.

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

A couple of tech entrepreneurs living in Brooklyn are eager to trade up from the two-bedroom townhouse they rent. They’d love to stay in the same neighborhood, but yearn for more space to house their three toddlers.

“They’re feeling incredibly smooshed in that townhouse. They want to buy a place with at least four bedrooms for the family, plus a garage so they won’t have to fight for street parking,” says Margaret Lebenson, the buyer’s agent they engaged to assist in their search.

Like nearly all purchasers, the Brooklyn couple confront major affordability challenges. With the move, they anticipate high mortgage outlays, along with substantial property taxes, as well as more maintenance, insurance and renovation expenses.

“Everybody wants a house at least 10% over what the bank says they can afford,” says Lebenson, who’s affiliated with the National Association of Exclusive Buyer Agents (naeba.org).

Though this couple has begun house hunting, they’re tempted to delay any purchase until late fall in anticipation of substantially lower mortgage rates. Why? Because many economists now expect the Federal Reserve to drop its rates at its September meeting.

“Frankly, I wouldn’t blame them if they sat on the sidelines for just a few more weeks to get lower rates. I’d do the same if I were in their position,” Lebenson says.

Still, she’s advising the couple to lay the groundwork for a housing transition.

“If you’re sure you want to move in a matter of months, it’s not too early to get started now,” Lebenson says.

Here are a few pointers for would-be buyers:

-- Seek the backing of a reputable mortgage lender.

Most lenders go to great lengths to ensure that the loans they originate are solid. That means borrowers must be well prepared to respond to their lender’s request for documents.

“The lender should tell you precisely what documents you’ll need for mortgage approval,” says Sid Davis, a real estate broker and author of “A Survival Guide for Buying a Home.”

As proof of income, many lenders now insist on more than the customary pay stubs and W-2s. For example, they’ll likely ask for at least two years’ worth of tax returns. Also, they’ll probably want proof that the funds for your down payment have been in your savings and checking accounts for some time and weren’t borrowed from your aunt just last week.

In addition, a good lender will provide you lots of guidance on how to overcome hurdles, like rectifying errors on your credit reports.

The time you spend documenting your financial fitness to buy a home is well spent if the lender gives you a preapproval letter, a vitally important tool as you negotiate for a property.

“Another advantage of preapproval is that it helps you define your comfort zone on how big a mortgage you can afford,” Davis says.

-- Don’t rush into home selection.

During the worst of the pandemic, many neighborhoods were short on available properties. But inventories are now gradually rising, and more would-be sellers are expected to surface in the near future. That’s why buyers now have more time to be choosy.

“You want to be open-minded. But you also don’t want to look for a level of perfection that’s impossible, because every house has flaws,” Davis says.

Having more choices is a positive for buyers, but not if it promotes perpetual indecision. Those who find themselves delaying indefinitely may wish to work with an agent to formulate tighter screening criteria.

“Start with a list of maybe 10 or 12 houses in the best neighborhood you can afford. Then gradually narrow that list to a shorter one,” Davis says.

However, he cautions wariness of any agent who tries to convince you to buy a place that doesn’t meet your core criteria, no matter how favorable the price.

“If an agent pressures you, stop working with that person and find another one,” Davis says.

-- Seek homeowners eager to sell.

Tom Early, an independent real estate broker, says that there are always some “test-the-market” sellers who have no urgent need to move. But there are also highly motivated homeowners who must move due to a job relocation, a financial setback or divorce.

“If a property is vacant, it’s likely the sellers are eager,” Early says.

Even if the home isn’t vacant, there are ways to assess the sellers’ level of motivation. Early says many owners and their listing agents are remarkably frank.

“You don’t need to pry, just ask why they’re moving, and they’ll open up,” Early says.

-- Don’t postpone a purchase beyond what is realistic.

Fear is a powerful factor that can stop people from realizing their home-buying plans, even when logic tells them to go forward.

Of course, there are legitimate reasons to postpone. Perhaps you have evidence your employer will soon begin a round of layoffs or that your spouse’s job is vulnerable. And it's not unreasonable to delay in anticipation of lower mortgage rates.

But absent such concerns, and assuming you’re sure that buying the right home is a good move for you from financial and personal perspectives, there’s no point in ruminating over what could go wrong, Davis says.

“[I]f your dream is to own a home of your own -- one where you could paint the family room lavender if that’s what your heart desires -- you might kick yourself later if you let worry stop you indefinitely,” Davis says.

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

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.)