As Boomers Downsize, Competition Grows for Simpler—but Not Always Smaller—Homes

As Boomers Downsize, Competition Grows for Simpler—but Not Always Smaller—Homes

By Julia Carpenter

Wall Street Journal
Nov 1, 2021

Older buyers seeking smaller or easier-to-maintain homes are crashing into younger buyers in a housing market where the competition is fierce.

Soaring home prices and new construction favoring bigger builds have interrupted traditional patterns of homeownership for buyers across the country. Smaller houses, desired by aging seniors and young couples alike, are among the toughest to find. The supply of homes up to 1,400 square feet is near a five-decade low, according to data from Freddie Mac.

In 2020, about 28% of real-estate transactions could be characterized as downsizing, said Lawrence Yun, chief economist at the National Association of Realtors. The majority of these transactions are made by buyers 55 or older.

“We have a housing shortage,” Mr. Yun said. “Clearly from the age patterns, young people want to upsize, and the older generation is looking to downsize, but not greatly—only 100 or 200 square feet smaller than where they’d been living.”

The typical housing cycle for many families—kids go off to school, household sizes shrink, empty-nesters hand off their family homes to new households raising their own children—has been disrupted in recent years, said Len Kiefer, deputy chief economist at the mortgage giant Freddie Mac. The large baby boomer population outnumbers the rising Gen X-ers, who would be the ones to traditionally take over the family homes.

Many boomers want to “age in place,” meaning living in their original home independently into their later years. A 2018 survey of 2,287 adults from the AARP shows seniors would prefer to stay in the communities where they already live.

“They like their grocery store, they like their doctor, they like their local options,” said Karan Kaul, senior research associate at the Urban Institute.

Once they decide to move to a smaller home, they end up competing with first-time buyers and limited supply, Mr. Kiefer said. Price growth has been strongest for smaller, less-expensive homes. “That works against you in terms of what you can get for your buck,” Mr. Kiefer said.

If they haven’t paid off their mortgage, older buyers might find they could sell their current home at a high price but then pay more in mortgage payments on a smaller place. The share of older homeowners with debt has steadily increased over the past decade, rising to 55.4% in 2019 from 33.2% in 2007. This rise is driven in large part by mortgage debt, according to data from the Urban Institute.

After retiring from working at the New York Department of Education for 33 years, Enid Maldonado-Salgado started to make a plan to move from her current home in Flushing, in New York City’s Queens borough, to further east on Long Island, where she and her husband can be closer to family.

The 60-year-old worked with a Realtor for a year before retirement. Ms. Maldonado-Salgado said her goal was to find a home valued at 80% of her current home’s worth. She found the house-hunting process difficult, even with the money she had saved from refinancing her existing home and the substantial profit she expects from selling it.

For Ms. Maldonado-Salgado, downsizing meant finding an affordable home that wouldn’t require too much maintenance or upkeep. She wanted the freedom to travel and to be closer to her grandchildren.

Ms. Maldonado-Salgado is now in the process of closing on a new house in Smithtown. The new house is nearly equal in square footage to her house in Queens.

“It wasn’t about finding something smaller, it was about finding something that benefited my budget,” she said. “We wanted to make things simpler for ourselves.”

 

15 Best Projects to Do in Fall

15 Best Projects to Do in Fall

Blog Post by: FamilyHandyman.com
T. Lacoma
Updated: Apr. 18, 2018

As the weather starts to cool down, you have the perfect opportunity to clean up summer messes and prepare your home for colder days. Use this time to get these fall maintenance and renovation projects done before it's too late!

1 / 15
Upgrade Your Old Furnace
NEIL LOCKHART/SHUTTERSTOCK

Upgrade Your Old Furnace

If your furnace is 10 to 15 years old and is taking longer to heat up the house than usual, it may be time to replace it. Pay close attention to the SEER ratings and choose an efficient fuel like natural gas to help save money. Plus: Do I Need a New Furnace?
2 / 15
Check On Important Insulation

Check On Important Insulation

Specifically, check on weatherstripping around your doors, windows, and garage door. The felt strips seal these openings to prevent drafts, but they can wear down over time. Replace any faded weatherstripping and complete any other insulation tasks you've been putting off. Plus: Replace Weatherstripping
3 / 15
Seal Any Air Leaks in the Attic
FAMILY HANDYMAN

Seal Any Air Leaks in the Attic

If you see any light shining through chinks in your attic, you have air leaks (and pest entrances). Seal those off with foam insulation to keep your house warm over winter. Do not try to close off any attic vents, however, as you'll need those to get rid of humid air. Plus: Learn More About Attic Insulation
4 / 15
Clean Out Your Gutters
INDY EDGE/SHUTTERSTOCK

Clean Out Your Gutters

Your gutters work hard over fall and winter, and they need your help. Clean them out before it gets too cold. This will prevent gutters from overflowing with rain or snow and damaging your roof. Plus: Gutter Repair
5 / 15
Replace Old Single-Pane Windows

Replace Old Single-Pane Windows

Single-pane windows are poor insulators. If you have any of these windows, consider replacing them with double-pane windows. You can also upgrade double-pane windows to models sealed with a neutral gas like argon to improve insulation. Plus: Learn More About Window Replacement and Installation
6 / 15
Spread Mulch to Protect Perennials
FAMILY HANDYMAN

Spread Mulch to Protect Perennials

Spread mulch among your perennial flowers and plants. This will help insulate them from frigid temperatures and also provides a bit of extra protection against hungry creatures. Plus: The Family Handyman Guide to Mulch
7 / 15
Replace Missing Shingles
FAMILY HANDYMAN

Replace Missing Shingles

Your roof needs to be in good shape to resist wind, rain and snow. Replace any missing shingles and fix other signs of damage before those eyesores turn into serious and expensive leaking problems. Plus: Easy Shingle Repair
8 / 15
Prepare Your Fireplace

Prepare Your Fireplace

For wood fireplaces, clean them out thoroughly, check the chimney, and make sure that you have an ample supply of wood. Gas and electric fireplaces can also benefit from an annual inspection before winter begins. Plus: When to Clean a Chimney Flue
9 / 15
Switch Your Ceiling Fan Direction
FAMILY HANDYMAN

Switch Your Ceiling Fan Direction

Ceiling fans should turn clockwise in the colder months, which pushes warm air back down into the room. Most fans have a simple switch that reverses the direction. Plus: How to Balance a Ceiling Fan
10 / 15
Hibernate Outdoor AC Units
FAMILY HANDYMAN

Hibernate Outdoor AC Units

Clean and cover your outdoor air conditioning unit to protect it from rain and snow. Note, that this doesn't apply to heat pump models, which are designed to switch to a heating mode in winter and cannot be covered. Plus: How to Clean Your Condenser Unit
11 / 15
Clean Up Your Lawnmower and Other Yard Tools
FAMILY HANDYMAN

Clean Up Your Lawnmower and Other Yard Tools

Your lawnmower and other yard tools are probably dirty after a spring and summer of use. Don't let that dirt and grime sit around all winter. Instead, clean and tune up these tools so they will be ready for the next heavy work season. Plus: Tune Up a Lawn Mower
12 / 15
Clean and Cover Your Grill

Clean and Cover Your Grill

It's time to break out the cleaners and steel-bristled brushes, because your grill needs attention. Get rid of any remaining scraps of food, turn off the gas, and cover the grill to protect it from weather and pests. Plus: How to Tune Up Your Outdoor Gas Grill
13 / 15
Clean Carpets

Clean Carpets

Fall is an excellent time to clean your carpet. They tend to be at their dirtiest after summer activities, and you want them clean for indoor winter activities. Be sure to open your windows and air out your house as the carpet dries. Plus: Carpet Repair, Cleaning and Installation
14 / 15
Winterize Irrigation Systems
FAMILY HANDYMAN

Winterize Irrigation Systems

In colder climates, your irrigation system should be blown out to remove any water and prevent freeze-ups that can ruin sprinklers. Make sure that you also store your garden hose and shut off the water to exterior faucets, if possible. Plus: How to Install a Drip Irrigation System
15 / 15
Trim Problem Bushes and Trees
SAULETAS/SHUTTERSTOCK

Trim Problem Bushes and Trees

The last thing you want are branches to hit your house during a windstorm. Now is the time to inspect nearby trees and shrubs, and cut any low-hanging or dying branches before they can do damage. Don't go crazy, though. Trimming promotes new growth, so wait until your bushes and trees are truly dormant (after winter, early spring) to do your annual pruning. Plus: Tree Pruning Techniques
Blog Post by: FamilyHandyman.com
T. Lacoma
Updated: Apr. 18, 2018

7 Best Things About Buying A House In The Fall

Shared from the Trulia Blog

7 Best Things About Buying A House In The Fall

The summertime real estate season is as hot as the weather, but you might want to postpone your purchase until fall.

For the first time in recent history, October surpassed June as the most popular month to get married. And these autumn-loving brides may be on to something: Although the spring months are notoriously the best time to buy real estate (as well as have a wedding), fall may be the new ideal season to buy a home.

Hear us out: One obvious reason is that it’s easier to get from open house to open house without questioning if you’ll need an AC repair ASAP upon moving into that home for sale in Phoenix, AZ. Also, families on a mission to move into a new home before school starts are out of the picture. Besides these two more obvious reasons, here are seven expert insights on why you should consider a fall real estate purchase.

1. There’s less competition

Competition for houses drops off in the fall, a time many people consider to be off-season in real estate. But there are still homes for sale — and in some cases, there’s just as much inventory as there was during the spring and summer. “[Fall] means new inventory and repositioned old inventory that did not sell in the prime season,” says Wesley Stanton, a New York, NY, agent with The Stanton Hoch Team.

This puts you in a great position to negotiate. “Fall homebuyers should consider [making] lowball offers, followed by more aggressive negotiation,” says Brian Davis, a real estate investor and director of education at Spark Rental. Davis points out that many sellers are very motivated to sell before the holidays. If possible, buyers should let these sellers know that they can close before Thanksgiving or before the school winter break.

2. Sellers are worn-out

Some sellers who put their homes on the market during the prime selling times of spring and summer might have been a tad overconfident by listing their homes for more than buyers were willing to spend. After months of no action, these sellers are often ready to make a deal. “Sellers who were unrealistic earlier in the year about price will now be more willing to reduce the price come fall,” says Thomas Miller, a Washington, DC, real estate agent. “Because there [are fewer buyers] and because the sellers are now eager to sell, they are more inclined to take the low offer than wait another six months for spring to come around.”

3. Sellers are serious

Not all homes on the market in fall are summer leftovers. Some people need to sell in the fall because the timing is right. Maybe they were having a home built, and it’s now ready. Maybe they need to move because of a job. “The sellers with houses on the market in the fall tend to be serious,” says Sam Heskel, president of Nadlan Valuation, an appraisal management company in Brooklyn, NY. “That means sellers could be more open to negotiating and accepting a lower offer.”

4. You can take advantage of tax breaks

First-time homebuyers, take note: Although you can’t escape paying income tax, you can make a dent in what you owe when you become a homeowner. “Property tax and mortgage interest are both deductions you can take for your whole year’s worth of income, even if you closed on your home in December,” says David Hryck, a New York, NY tax adviser, lawyer, and personal finance expert. “Any payments that are made prior to the closing of the loan are tax-deductible. This can make a serious difference in the amount you owe the government at the end of the year.”

5. Fall is a safer time of year

Did you know that burglars have peak seasons? They do, says Sarah Brown, a home safety expert for SafeWise.com. “July and August are prime months for burglaries to take place,” she says. “Waiting until the fall [to buy] gives you an advantage when learning about a home and the neighborhood.” You’ll be settled in your home and can take precautions — like setting up that new alarm system — before the next burglary season rolls around. Note: Check Trulia’s local maps with the crime filter before you buy.

6. You’re the center of attention

Because spring and summer are ideal times to buy a home, real estate agents are usually busier then. And that could mean you might not always get the attention you want. This is also true for other professionals you’re working with to buy a house. “Service providers, such as mortgage lenders and title companies, are moving out of the summertime sales swamp and can often respond more quickly,” says John Lazenby, president of the Orlando Regional Realtor Association in Orlando, FL.

The same goes for movers. “Because summer is peak moving season, people often experience more delays and service issues, such as moving companies reaching capacity and running out of trucks to pick up shipments,” says Jack Griffin, president and chief operating officer of Atlas World Group. “The probability of experiencing a delay goes way down in the fall season.”

7. You can take advantage of end-of-year sales to outfit your home

There are bound to be improvements you’ll want to make after buying a house. You’ll also probably need to buy items to maintain your home, and if appliances weren’t part of the deal, you’ll need those too. Wouldn’t it be great to coordinate your home purchase with sales on items you’ll need? According to Consumer Reports, the calendar determines when it’s a good time to buy all sorts of consumer goods. In particular, September is a great time for buying carpet and paint. October means lawn mowers go on sale, and appliances and cookware are cheaper in November.

 

Shared from the Trulia Blog

 

 

 

8 Reasons to Choose a Real Estate Agent Over For Sale By Owner

The Bottom Line

When you sell your home yourself— also known as "for sale by owner” (FSBO)— it may seem like a great way to save thousands of dollars. After all, the standard real estate agent’s commission is 5% to 6%—that’s $12,500 to $15,000 on a $250,000 home.1 Given the size of this fee, you may think that acting as your own seller’s agent will surely be worth the savings. Here are eight reasons why you may want to reconsider.

KEY TAKEAWAYS

You might be tempted to avoid a real estate agent, save the commission, and just sell your home yourself—also known as “for sale by owner” (FSBO).
While tempting, in most cases the risks of going it alone likely outweigh the benefits.
Risks include having few potential buyers (let alone qualified buyers), making emotional decisions, not knowing how to negotiate properly, and not having enough free time to dedicate to finding a buyer.

One of the biggest risks of FSBO is not having the experience or expertise to navigate all of the legal and regulatory requirements that come with selling a home.

1. Realtors May Not Show a "For Sale By Owner" Home

In an FSBO deal, the buyer’s agent knows there won’t be a professional colleague on the other end of the transaction. Even if a client insists on seeing your home, the agent might discourage making an offer, citing the hassles and risks of trying to close the deal without a professional representing the seller—and without a guaranteed commission.

“There are only two reasons why I show an FSBO: There is no other inventory available or the price is ridiculously low,” says Bruce Ailion, a realtor with RE/MAX Town & Country in Alpharetta, Ga., near Atlanta. Experienced brokers have generally been burned by an FSBO transaction in which the seller did not pay the full agreed commission—or any commission at all—to the agent who brought the buyer, says Ailion. “FSBO sellers are viewed as unrealistic, unreasonable, and difficult sellers whom professional realtors have rejected,” he says.

Still, there are buyers’ agents who will show your property under the right conditions. That may mean signing an agreement with the agent that states the percentage fee that you, as the seller, will pay the agent. (The agent may specify a 6% commission, trying to nab both the buyer’s and seller’s side. Instead, negotiate the total commission to a more reasonable 2% to 3%.) An agreement should also clarify that the agent is only working on behalf of the buyer. It may also state that as the buyer’s agent, the real estate agent has a duty to disclose to the client all the information the seller provides to them, such as the need to sell by a certain date.

If you want to be taken seriously by sellers’ agents, get the best price, and make sure you don’t miss any key steps in the process—or risk a lawsuit—it’s better to use a real estate agent than to try to sell your home yourself.

2. Agents Avoid Emotional Sales

Selling your home is typically an emotional process. Having an agent keeps you one step removed and makes you less likely to make stupid mistakes, such as overpricing your home, refusing to counter a low offer because you’re offended, or giving in too easily when you have a deadline for selling. “A realtor can follow up without communicating a sense of eagerness or desperation; following up is their job,” says Ailion. “When a seller repeatedly checks, it signals, rightly or wrongly, the willingness to accept a lower price.”

If you forgo an agent, you’ll also have to deal directly with rejection every time a buyer’s agent tells you that the client isn’t interested. “As the homeowner, it can be quite upsetting hearing some of the comments that are made by buyers and, oftentimes, their agents,” says David Kean, a realtor with Beverly & Co. in Beverly Hills, Calif.

An agent can take the sting out of the rejection and put a positive spin on any negative feedback. “It is more difficult for [the seller] to keep their emotions out of the sale, because there’s no third party to bounce anything off of,” says real estate broker Jesse Gonzalez, president and founder of North Bay Capital in Santa Rosa, Calif. “For instance, if the property sits on the market, the homeowner doesn’t know the reason the home is not selling."

“The emotions will always be there for the seller,” Gonzalez adds, “but constructive criticism can be easier to digest for the seller when it comes from a broker who is on their side, trying to get the best for them.”

3. Real Estate Is a Full-Time Job

Can you rush home from work every time someone wants to see your home? Can you excuse yourself from a meeting every time your phone rings with a potential buyer? At the end of a long workday, do you have the energy to take advantage of every possible opportunity to market your home? Are you an expert in marketing homes?

Do you have any experience doing so? Your answer to all of these questions is probably “no.” An agent’s answer to all of these questions is “yes.” In addition, by going through an agent, you’ll get a lockbox for your front door that allows agents to show your home even when you aren’t available.

4. Agents Access Large Networks

Yes, you can list your home yourself on Zillow, Redfin, Craigslist, and even the multiple listing service (MLS) that agents use. But will that be enough? Even if you have a large personal or professional network, those people will likely have little interest in spreading the word that your house is for sale. You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home. A smaller pool of potential buyers means less demand for your property, which can translate into waiting longer to sell your home and possibly not getting as much money as your house is worth.

“A good real estate agent should have a Rolodex of names and contact information, so they can quickly spread the word about the property they just listed,” says real estate broker Pej Barlavi, owner and CEO of Barlavi Realty in New York City. “I have a distribution list of over 3,500 contacts that get an email blast from me within 48 hours that we list a property. Then I start to market the property in every available website, MLS, and site for real estate to keep the momentum and [to keep] showing consistently.”

5. Weeding Out Unqualified Buyers

An agent can find out whether someone who wants to view your house is really a qualified buyer or just a dreamer or curious neighbor. It’s a lot of work and a major interruption every time you have to put your life on hold, make your house look perfect, and show your home. You want to limit those hassles to the showings most likely to result in a sale.

“Realtors are trained to ask qualifying questions to determine the seriousness, qualification, and motivation of a prospect,” says Ailion. Realtors are also trained to ask closing questions about how long buyers have been looking, whether they’ve seen any other homes that would work for their needs, if they are paying cash or have been prequalified, what schools they are looking for, and so on. They can move a qualified and motivated person to the point of purchase. FSBO sellers lack this training and skill set, he says.

It’s also awkward for buyers to have the seller present, rather than the seller’s agent, when they’re touring the home. “When showing a house, the owner should never be present,” says Kean. “Nothing makes a potential buyer more uncomfortable than the current owner being in the house. When a seller is present, most buyers will rush through a house and won’t notice or remember much about what they saw.”

6. Price Negotiations Take Skill

Even if you have sales experience, you don’t have specialized experience negotiating a home sale. The buyer’s agent does, so they are more likely to succeed in the negotiation, meaning less money in your pocket. “An experienced selling agent may have negotiated hundreds of home purchases,” says Kean. “We know all the games, the warning signs of a nervous or disingenuous buyer.”

Not only are you inexperienced; you’re also likely to be emotional about the process, and—without your own agent to point out when you’re being irrational—you’re more likely to make poor decisions. According to Kean, instead of an offended seller making an emotionally charged, inappropriate response to a buyer, an agent will say something more professional, such as, “The seller has declined your initial request but has made the following counteroffer.”

Sellers who go solo also typically aren’t familiar with local customs or market conditions. “Agents know the pulse of the market and what’s driving demand, which gives them an advantage by knowing what terms are worth negotiating for and which are worth letting the other party win,” says Rob McGarty, owner and designated broker with Bushwick Real Estate in Seattle.

Furthermore, says Gonzalez, agents know the local customs for selling a home, such as whether the buyer or the seller typically pays fees such as transfer taxes and closing costs.

7. You Ignore Your Home’s Flaws

Agents are experts in what makes homes sell. They can walk through your home with you and point out changes you need to make to attract buyers and get the best offers. They can see flaws you’re oblivious to because you see them every day—or because you simply don’t view them as flaws. They can also help you determine which feedback from potential buyers you should act on after you put your home on the market to improve its chances of selling.

“Anyone who’s determined to sell their own home should hire an interior designer or property stager to assess the current condition and market appeal of the home,” Kean says. “All sellers need to hire a professional cleaning service to give a home a deep cleaning before putting it on the market. A good cleaning will help remove any distinct odors, such as pets, that the inhabitants can’t smell, since they live with them every day.”

8. Exposure to Legal Risks

A lot of legal paperwork is involved in a home sale, and it needs to be completed correctly by an expert. One of the most important items is the seller’s disclosures. “A seller of real estate has an affirmative duty to disclose any fact that materially affects the value or desirability of the property,” says attorney Matthew Ryan Reischer, founder and CEO of LegalAdvice.com. A seller can be held liable for fraud, negligence, or breach of contract if they do not disclose properly. “The issue of whether a fact is material or not is generally established in the case law of the state in which you live,” says Reischer.

Unless you’re a real estate attorney, your agent probably knows more about disclosure laws than you do. If you fail to disclose a hazard, nuisance, or defect—and the buyer comes back to you after having moved in and found a problem—the buyer could sue you. Agents can make mistakes, too, but they have professional errors and omissions insurance to protect themselves and give the buyer recourse, so the buyer may not need to pursue the seller for damages.

The Bottom Line

It’s a tall task to learn how to sell your house without a realtor—and selling your home will likely be one of the biggest transactions of your life. You can try to do it alone to save money, but hiring an agent has many advantages. Agents can get broader exposure for your property, help you negotiate a better deal, dedicate more time to your sale, and prevent your emotions from sabotaging it. An agent brings expertise, which few FSBO sellers have, to a complex transaction with many potential financial and legal pitfalls.

 

8 Reasons to Choose a Real Estate Agent Over "For Sale By Owner"
Why it's worth getting a pro to sell your home

By AMY FONTINELLE
Reviewed by ERIC ESTEVEZ on August 26, 2021