Nolo’s Real Estate Tips for Home Buyers

If you're nearing retirement -- or just like to plan ahead -- what you'll do with the house you own is an important topic for discussion with your spouse or partner.

Yes, that sounds obvious. But an astonishing number of couples haven't had that basic conversation, as pointed out by USA TODAY's Sandra Block, in her column entitled "80% of couples disagree when it comes to retirement planning."

Among the statistics she points to, provided by Fidelity Investments: 60% of couples disagree about when to retire, 44% disagree about whether to work in retirement, 42% disagree about their retirement lifestyle, and 44% disagree about whether they'll need to sell real estate to fund their retirement.

This isn't a conversation that should wait until the last minute. For example, perhaps you're thinking about a bathroom remodel.  If you know you'll want to stay in this house during retirement, now might be a great time to take some measurements and make sure it's wheelchair accessible, just in case. But if you know you want to sell the house and move, your focus should be on what changes to the bathroom will add the most to your selling price.

What makes a house suitable for retirement, anyway? Look for features like:

• accessibility to public transport and shops, in case the time comes when you shouldn't really be driving
• minimal challenges to a person with limited mobility -- single-level homes with few stairways are best, and
  
• easy-to-grip handles and knobs, plus safety railings (these probably aren't there now, but make sure they won't be a problem to add later).

For more on evaluating your house's retirement potential, see Buying a Second Home: Income, Getaway, or Retirement, by Craig Venezia.

I love "best" lists, because they're usually:
1) short and snappy.
2) based on a decent amount of research, and
3) give you a sense (maybe artificial) that the world can be ranked in an orderly way.

And this seems to be the season for best lists. For example, Forbes magazine has named its ten best retirement spots. Yes, Florida is on there, but not in the first three, which include:
1) Montgomery County, Pennsylvania
2) Nassau County, New York, and
3) Pima County, Arizona.

U.S. News & World Report magazine has named its 2009 ten best places to live in the U.S. based on factors like strong economies, low costs of living, access to healthcare and education, and recreation. Its top three are:
1) Albuquerque, New Mexico
2) Auburn, Alabama, and
3) Austin, Texas.
(Apparently, use of the letter "A" in the name was a criterion as well.)

And not to be outdone, Kiplinger's magazine has named the ten top U.S. cities for stable employment and new career opportunities. Start packing your bags for:
1) Huntsville, Alabama
2) Albuquerque, New Mexico, or
3) Washington, D.C.

Hey, Albuquerque made two out of the three lists! Maybe I should start packing.

Thanks go to Money magazine's annual "Best List" for mentioning this website in its "Best Way Not to Sell Your House" category: Lovelylisting.com.

My coworkers have probably wondering why I've been giggling at my desk for the last ten minutes, and this is it. The website collects listing photos that would cause most home buyers to run in the other direction; you'll see photos dedicated to showing off giant cracks in the flooring, cleaning equipment seemingly tumbling down a steep staircase, obviously Photoshopped giant tulips in an otherwise drab yard, and more.

There were times when I was writing our recent book, Selling Your House in a Tough Market, that I worried our advice about making the place look good was too obvious to merit space on the page... but I've just put those fears to rest.

It's no secret that now is not the best time in recent history to sell a house. Prices are down in most areas of the U.S., buyers are taking their time and asking for lots of concessions, and the economy is keeping everyone cautious.

But life moves on, and many people can't wait for a turnaround to sell their home -- particularly those moving to a place where they can find work, moving to a retirement home, or needing a bigger house for a growing family.

That's why we wrote our most recent Nolo book, Selling Your House in a Tough Market. The book provides advice on key aspects of the process, like getting to know the local market (some are better than others for sellers), setting the right price (so the house doesn't stagnate on the market), staging it to look its best, and much more. And you can hear free tips from the authors, Alayna Schroeder and me, Ilona Bray, by listening to a podcast interview (click here). 

Moving to a new house is a thrill, and will probably offer lots of benefits to your children if you have any: separate bedrooms, a bigger play area, maybe even the possibility of their first cat or dog.

Yet despite all that, your children  may not share your excitement at moving. As child and family therapist Debbie Essex told us when we were writing our book Nolo's Essential Guide to Buying Your First Home, "One of the reasons moving is tough on children is that they've usually had very little input into the process -- they just feel like their lives are being disrupted."

One way of helping kids deal with those feelings is to read them (or gently suggest they read) books about other children who've gone through the same thing. In fact, I'm told by a Berkeley librarian that such books get a lot of requests. We mentioned a few good books in our Nolo guide, but more are out there, even a few recently published goodies. Here's a list of some I've come across:

Plum Fantastic, by Whoopi Goldberg and Deborah Underwood (Hyperion, 2008): Alexandra Petrakova Johnson moves from a small southern town to New York City, where her mother enrolls her in ballet lessons despite her wish to become a speed skater. She must learn to make new friends, conquer stage fright, and more. 

Aldo Applesauce, by Johanna Hurwitz (Puffin, 1989): Aldo, a fourth-grader and vegetarian from New York, adjusts to his family's move to a small town.

Anastasia Again, by Lois Lowry (Yearling, 1982): Fans of Anastasia Krupnik will enjoy watching her deal with her parents' move to the suburbs.

Mr. Rogers' Moving, by Fred Rogers (GP Putnam): I'm from the generation that watched Mr. Rogers so much that I can still sing "It's a Beautiful Day in the Neighborhood", so I have to trust this nonfiction, read-along guide for toddlers!

Alexander, Who's Not (Do You Hear Me? I Mean It!) Going to Move, by Judith Viorst (Atheneum, 1998): The title says it all, at least until Alexander has said goodbye to all his favorite things and come around to the idea of moving.

It seems like every media outlet in the country is now talking about the opportunity that low home prices create for first-time buyers.

On KQED radio this morning, I heard a report on how military families in Southern California are able to afford homes for the first time in about a decade -- and getting mortgages cheaper than their rent.

USA TODAY tells us, in an article by Stephanie Armour, that first-time buyers are finding bargains and helping to perk up home sales.

And CBS news reports that Florida buyers interested in waterfront property are flocking to foreclosure boat tours!

With all this news coverage, these hints of a trend could turn into a self-fulfilling prophecy. People will see that others are buying homes and figure they'd better not wait any longer until prices rise, causing more people to get into the market, causing prices to rise, and so forth. I'm just watching, not advising...

The recent economic stimulus bill lets first-time home buyers take a substantial tax credit -- either on their 2008 or 2009 taxes! This can work even if you haven't bought your house yet. You'd need to either file for an extension now or file an amended return later this year, after the purchase.

The exact amount of the credit is either $8,000 or 10% of the home's value, whichever is less.

For an excellent set of instructions on how to take the credit in 2008, see USA TODAY finance columnist Sandra Block's article, "Claiming this year's first-time home buyer's tax credit is easy," in the Tuesday, March 31st edition of USA TODAY. And for other details, see the CNN article, "Final score: $8,000 for homebuyers."

Own a co-op? Then you probably won't be happy to know (or remember) that residential buildings are a major offender when it comes to releases of carbon dioxide emissions. But as you also know too well, doing something about it will require enthusiasm, or at least buy-in, from other owners. For inspiration and advice, check out Mireya Navarro's article, "It's Not Easy Turning Co-Op Boards Green," in the March 26, 2009 issue of the New York Times.

One of the most interesting factoids was that you don't need to go all out with solar panels to have an effect on the bottom line -- the greatest bang for the buck comes from simple conservation measures like insulating pipes and weather-stripping doors.

Another interesting suggestion comes up in the article "Start Greening Your Building," from The Cooperator: The Co-Op and Condo Monthly: installing a device that measures every owner's individual energy usage -- that can certainly wake up some people who weren't too concerned about energy costs when they were spread among all owners.

And for more information for New York City residents, check out the website of Green Home NYC, a volunteer-run organization whose mission is to facilitate the adoption of sustainable building methods and materials by owners of small residential and commercial buildings in New York City.

That's right, I'm now the owner of a new (but old, made of recycled wood), Audubon-specification-compliant wren house.

Actually, I think I spent more time with this choice than with the house I'm living in. As with human houses, the particular bird houses I was checking out were all unique, made by Berkeley Rustic Birdhouses. I had to carefully consider price range, size (the entry, in particular, can't be too big if you want to attract wrens), aesthetics, and -- trying to get into the mindset of a small bird here -- which one might feel like "home." Sound familiar?

Mounting it became another lesson in home ownership -- there's nothing so valuable as a friendly neighbor with power tools! (Thanks, Joe.)

Now I'm suddenly shifting into the mindset of a home seller. Will any birds take a look? Will they peer inside in delight and say, "This is it!" or just look for signs to the next open house? I'm told it could take a year or more (for one thing, the birds need to feel sure I'm not going to move this new object tomorrow), but of course I want some to move in right now...

This almost qualifies as "weird news": For whatever reason, Experian has stopped letting individual consumers (such as home buyers) access their FICO scores. You can still get your credit history, but not the score (not even if you're willing to pay for it).

This isn't the end of the world, since the other two of the "big three" credit reporting agencies (TransUnion and Equifax) will still give you a score. But because all three of them collect different information, you might not be able to find out if Experian's score is out of whack compared to the other two -- and deal with that fact before prospective mortgage lenders see your score.

For details, see this Wall Street Journal article.

Getting the mail delivered to one's new home is always a nice confirmation -- the place is really yours, even the delivery person recognizes it!

But what type of box is that mail coming to? If it's outdoors and unsecured, you may be opening yourself up to identity theft. Enterprising thieves can steal your bank statements, tax documents, and more, thus gaining all the information they need to drain your accounts or take out new credit cards and loans. Investing in a locking mailbox might need to be one of your first steps as a homeowner.

And then there's the matter of your outgoing trash -- another possible gold mine for thieves. Make sure to shred or rip out any sensitive personal information in your papers, particularly anything with your Social Security number.

With a little knowledge and preparation, you don't have to be a victim. That's the subject of Nolo's new book, Stopping Identity Theft, by Scott Mitic, an expert in the field and CEO of TrustedID, Inc. You'll find tips on dealing with all kinds of identity theft issues, not only around your house, but while shopping, traveling, surfing the Web, and more. I learned more than a few things about how to protect myself and my family by reading it! 

It's been about a year since I posted a blog wondering whether it wasn't time for homeowners to start checking out possible rises in sea level before buying a house near the coast -- and I still haven't found a website that lets you figure out how high the water is predicted to rise in local areas.

But wait, it looks like scientists may be changing the way they calculate rising amounts anyway.  In fact, they're saying some areas may experience higher rises than others (watch out Washington, DC). Find out more here.

Too bad it's not freshwater levels that are rising -- my plants are suffering in this California drought.

I have to start with a confession -- I'm the type of person who pays bills without looking very hard at them. Once, I signed a credit card charge slip for $1,500 that should have been $15. That's probably why I married someone who is the exact opposite and will stand by the grocery store checkout line mentally adding up everything on the receipt while I'm already carrying the bags to the trunk.

But he gets the last laugh a disturbing amount of the time. In fact, having seen how often mistakes happen, I've started checking things more carefully -- in this economy, the only mistakes I want to see on my bills are the ones where they forget to charge me!

And he got to tally up one more moral victory yesterday, when our gas and electric bill came. "That's a lot higher than normal," he said. "Huh?" I said, looking at the numbers cluelessly. "C'mon, let's go read the meter," he said. "You can do that?" I asked.

Five minutes later, I was feeling much more empowered, having witnessed for myself that, indeed, the gas bill showed a meter reading that was much higher than our real-life meter showed. And it's not much harder than reading your car's odometer. Even with the old-fashioned type of meter (which we of course have), where the arrows swing around as if on a clock face, you basically just look at whichever number each arrow is pointing at, in succession. Click here for pictorial instructions.

The happy ending: We'll be getting about $150 back on our gas bill very soon.  

With the economy down, you might assume you can no longer afford the "luxury" of a home built using green construction techniques and materials. But the latest reports show that other buyers who've done the math are still convinced that the energy-saving features of green construction make it a good deal.

See, for example, this article by Mari Saito in the Philadelphia Business Journal, describing one condo buyer's shock that her monthly electricity bill went from about $280 per month in her former loft to just $76.

And in a related article by Diane M. Fiske, the Journal describes how one local developer is coming up with efficient ways to build homes that are both affordable and energy-saving. An important part of the strategy is the use of SIPS, or "standard insulated panels." These panels are made of wood (either young farmed trees or leftover wood flakes) and a foam insulating material. They're precut to the designer's specifications and put together on site, like a giant puzzle. They're getting high reviews for environmental friendliness (like reduced wood waste) and tight, heat-conserving qualities.

By the way, if you're building your own house, SIPS might be a good option as well. For more information on SIPS, see:

• http://www.toolbase.org/Technology-Inventory/Whole-House-Systems/structural-insulated-panels
• http://www.sips.org/content/technical/index.cfm?pageId=20
• http://www.usa-sips.com/faq.htm
  

by Mark Nash

[Guest blogger Mark Nash, author of four real estate books including the classic 1001 Tips for Buying and Selling a Home, has completed his annual survey of 839 real estate agents in all fifty states in the U.S. and the eight provinces of Canada. Nash's survey is distributed each fall to subscribers through his monthly electronic newsletter, 1001 Real Estate Tips.
 
What's In, What's Out with Home Buyers illuminates what's popular or what sours homebuyers in both the home purchase or sale transaction, and home decor. Compiled annually from the trenches, it offers a spectrum of tips that cover the reality of buying a home, and design no-nos and buyer must-haves for home sellers. More than 450 media outlets in North America utilized Nash's 2008 edition. For interviews, call Mark at 773-610-2074 or email him at Mark.Nash (at) cbexchange (dot) com. --Eds.]
 
IN
 

• Sidelined home buyers. Family or lifestyle additions, or changes made in buyers' households in the last three years are forcing those waiting out the market transition to finally get off the fence and say, "It's time for our family to buy the new home that suits our new needs."
• Home uplifts. Not a big renovation, but some new finishes that can visually hold over stay-put home sellers. Not a gut, rehab-to-the-studs new kitchen, but new flooring, countertops, and/or appliances.
  
• Collaborative home pricing. The old days of home sellers configuring a home's price are out. What's new is that the seller, along with their agent, looks at closed comparables, sets a price, then the buyer and their agent can agree or disagree -- but in the end, a mortgage lender and their appraiser will set the price, as they are assuming the most risk in the transaction.
• Balanced reporting by real estate and personal finance journalists. Consumers learned in 2008 that the "doom and gloom" residential real estate market headlines don't apply to all markets. What's been lost in the foreclosure hype is that there are still stories of homes selling in short market times (as little as 3 days), homes selling at full price, and some selling with multiple contracts on the table. Existing home sales will be 5.02 million for 2008, versus 5.652 million for 2007 -- a decrease of just over eleven percent, considerably less that the recent correction in the U.S. stock market -- and this realistic view shows that over five million people purchased a home despite the dire headlines of 2008.
• Creative home seller financing. Exhausted home sellers are turning to self-financing to move properties. Installment sale contracts and lease-to-own are the most popular and effective ways for sellers to begin to receive income from a property that has languished on the market in 2008.
  

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