Saturday, June 10, 2017

Big house, small house.....My personal baby boomer journey

As part of the baby boomer generation either I or one of my family members has transitioned through all phases of the real estate cycle.  When I was born, my parents first lived-in an apartment and in the late 60s bought a small but affordable ranch house in Oak Hill Park, Newton.    It was on a quarter acre lot with 3 bedrooms and one bath and cost $24K.  At the time Newton was ranked and still is ranked as one of the top public school systems in the state.  Their top priority was for my younger brother and I to be able to attend the Newton public school system.  As a child, I perceived this home to be the tiniest house of all my friends and an embarrassment to bring people over.  Looking back this may have been a predecessor for the Tiny House  movement although my parents did not live a minimalistic lifestyle (this was early days of collecting habits of my dad.)  See my blog decluttering.

As I went through high school, interestingly,  this little house became the destination for many of my friends particularly after a movie or date.  My parents always had an open door policy and welcomed my friends to visit whenever they wanted.    The small cozy space had a welcoming warmth that guests enjoyed the minute they entered the front door.  One time, although a bit late (I think 1:00 am) a friend, Billy rang our door bell and said "he was home from college".  Although we told him it was a bit late for a non-college setting the idea that he would stop by was actually heartwarming and became a long time family joke that "Billy was home from college"(he was studying nearby at Bentley). I learned from my parents how to make a house a home and have since carried this philosophy throughout my adult years.  They were always open to hosting dinner guests or having friends over for fine tea and coffee served in the nicest of bone china.

Once I went away to college and then graduated I moved to my our series of apartments before getting married and buying a starter home.  Right out of school,  I moved outside West Hartford Connecticut for an auditing job with Emhart Corporation.  I had searched through for a roommate through the West Hartford JCC at the time and found a two bedroom to share with someone already there in a very family oriented suburb which was not fun for a single college grad.  After one year of discontent with both my job and my living situation I decided I really wanted to be in a NYC and got a great job at Dunn & Bradstreet Corporate and my own apartment.  I found a small studio in Forest Hills New York with an easy commute to Manhattan where I was working for two years.

Missing my family and close friends as well as starting to date my now husband,  after two years it was time to move back to the Boston area.  I again started a new job in Needham and found an apartment in Chestnut Hill that I lived in for a year prior to getting married and moving to a 2 bedroom apartment in Newtonville.  During this time my husband was finishing a residency program in Boston and I studied for my MBA at BU. At this point an apartment was perfect as we both had full-time jobs and studying to do.

Once my husband finished residency and we were about to start a family we were ready to enter the housing market and started our search for our first home.  At the time we couldn't afford the high property prices in Newton or Needham ( my husbands family lived in Needham Heights) where we both grew up and a work colleague of my husbands encouraged us to look in her neighborhood of Dover, a rural community closeby.  In the mid-80s housing prices were booming and increasing much quicker than inflation and salaries. The starter home of my parents generation was now in the mid to high 200's.  

We ended up buying a raised ranch in Dover and closed one month to the date before our first child was born.    The house was structurally sound with 3 bedrooms, 2 1/2 baths.  It was larger than the typical starter home and to me seemed like a huge home compared to where I grew up.  The lot size was an acre which is standard for Dover.  The area was very residential and only a few miles from the Needham line.   The house itself just needed some cosmetic updates which we would do.  The immediate needs of painting and redoing hardwood floors were tackled before we moved in but updating bathrooms and the kitchen could be done at a later time.  We were of the generation that understood that the first house would not be perfect.  We quickly learned that we had to compromise a bit and would need to put in our own money or sweat equity into tailoring it to our wants.

As part of our due diligence we drove around the area and went to the town hall to learn more about life in the community.  We learned that Dover had one of the top rated public school systems  and the amenities Dover had to offer fit our soon to be family needs.   As we drove around different areas in Dover we set our eyes on a few neighborhoods we admired as well but agreed that the location and size of this home was perfect for our family at the time.  We ended up staying in the house close to 17 years.

A few generations later, the starter home of our time may be a thing of the past. Todays millennials often seek out the maximum house they can buy.  Real estate is one of the largest single investments Americans will make and therefore it is important to buy the property you choose for the right reasons.  For insight into recent buying trends of millenials see a recent new article story on posted by CNBC.

As time progressed our family grew from three to five and in the late 90s we began to think about moving to a larger home.  We looked  off and on over a few years but truly did love our neighborhood.  As our daughters approached middle school though we decided it was time for them to each have their own bedroom.  We were bursting at the walls with clothing and things they needed and all felt we needed to upsize.  We ended up finding our dream home, a colonial, in one of the neighborhoods we aspired to move in when we bought our first home in Dover.  At that time it was just being built and didn't have trees.  Now in full bloom almost 15 years later it was bursting with families our age and we excitingly made the move.  The house was perfect and like my parents small home in Newton quickly became the "go to" place for our kids throughout their high school years.  We had a large basement and TV set up and always welcomed their friends.  Many a party and sleepover as well as a great cul de sac lot made our yard the perfect prom photo-op destination.

As the next decade approached our kids started to go off to college and leave the nest.   During this time we also had to deal with the process of helping our parents downsize and transition to care facilities as health care issues developed.  In addition to accumulating our own things we suddenly inherited our parents collections and items to deal with.  See Blog here Transition.  We now have a large house filled with things but the kids have all moved out of state.  The upkeep of this size house is high and a lot of work for two people.  We have since bought a townhouse on the Cape which is half the size and a the perfect space for our current needs.  Eventually we will decide what to do with our primary house.  

We are now seeing may of our neighbors downsizing from the suburbs towards an urban or resort lifestyle.  Many of my friends and colleagues are asking me, where I plan to retire?.  Although not quite ready ourselves I do have some suggestions for those who may be ready right now.  As we start to age, floor layout and ability to navigate a larger home may start to become difficult. For those who want to stay in their homes,  there are often renovation options to allow you to age in place.  The National Association of Home Builders has out together a checklist (click here)  NAHB.   

Today Baby boomers are changing the trends on the real estate market and will many opt to remain in place many choose to seek alternative living situations.  The options are growing now for our generation.  In California, for example a new law was just passed to expand the concept of Granny houses, small houses that could be adjunct to a property as an in-law or millennial type home for your extended family.  For those who may be aging and not be able to age in place or near family members there are senior housing options also available.  I suspect that as time goes on as the trendsetting generation there will be more innovative ideas coming along and I will share them as I become so informed. 

The other day, coincidentally my parents home in Oak Hill Park, Newton came on the market.  It is now listed at $659K and will probably sell in a bidding war above asking price.  As part of the weekly real estate brokers tour I went to visit the small ranch I grew up in.   The rush of great memories came flooding as I walked over the threshold.  I introduced myself to the listing broker and told her this was my childhood home.   She was actually the buy side broker when my parents sold the house in 2000 and remembered my parents quite well.  She asked if my Dad was the one with the large collection.   She moved to her Oak Hill Park house over 30 years ago  and raised her family there.  She said she went through a phase of thinking about upsizing but loved the area so much instead she chose to stay.  She too is an empty nester and said she is glad she did as this home is the perfect size for she and her husband today.  When I mentioned downsizing she suggested I consider making an offer as this would be the perfect size home for an empty nested baby boomer.  As I thought briefly about this idea I reflected on my own personal journey of living in this area most of my life.  

Wendy recently joined Coldwell Banker Needham.  She has been a realtor for over 8 years and knowing the area quite well can share a hands on local perspective.  She has also recently earned the SRES  designation and looks forward to helping other baby boomers as they approach their next transitions.  Feel free to contact her directly or click here if you would like to learn more.  

Thursday, June 8, 2017

Transitioning to Senior Living Options

Discussing retirement and longterm elder care planning with ones parents can be an uncomfortable conversation.  Often the topic arises at a time of necessity.  When confronted with this situation, it may be difficult to objectively seek out the best options as time can become of the essence.  When my father-in-law became ill a few years ago we confronted this issue first hand.  He was having a difficult time walking up and down a short flight of steps and his primary care doctor became very concerned about his stability.  She feared he could potentially break his hip and stated she would not give him a medical release after a short inhospital stay to return home.  She said he needed to more to an assisted living facility or would eventually end up in a nursing home.  We panicked and in a one week turnaround had to find a place where he would be able to move with his wife that would be acceptable as their next home.  My mother in law was beginning to show early signs of alzheimers and also needed a better living situation.  She appeared very upset and resistant and did not want to leave their home of 50 years.  

Understandably it would be a challenge to move them both to a new place and make it their home.  In order to get them to agree to move it became important to emphasize the safety aspects of finding a new place.  Click here for some suggestions on how to Convince an elder.  We had to take my mother in law to see many places while my father in law was in rehabilation care.  We emphasized that she couldn't live with him any longer unless they both moved to a safe place.  We met with the marketing agents and had her dine at the places we visited.  They showed us their best activities and tried to embrace her interest.  A key selling point was the food at each venue.   

We were fortunate to find an assisted living facility that had an apartment available in the same area where they lived.  The building was brand new and they became one of the first residents.   Their new home was physically located behind the street where they raised their family and my mother in law could still do her usual daily routines including playing mah jong and going to the nearby hair salon and CVS.  My father in law would be able to get the medical attention he needed and both would have all the amenities including home cooked meals, personal hygeniene and health care services.  

Once we found the place,  my sister in law and I managed the transition process from beginning to end.  We had to plan which items they could bring to the new place, arrange movers, organize the items needed in the new home and for a few months we kept their primary home up and running.  We set their new place up to look like a smaller version of their primary home with many of their favorite furniture pieces including their bed and china cabinet as well as some artwork.  My in-laws adapted quickly and became very happy in their new home.  

At first they wanted to see their old place but after a few weeks seemed to feel this was their home.  A big help was that we visited constantly and ate with them in the dining room.  They got a lot of attention when they moved and seemed to enjoy being in the spotlight.  A key selling factor for them became the meals.  They felt like they were in a restaurent for each meal and particularly loved the desserts.  We treated this as their new normal and arranged to have frequent visitors until they started to phase in the activities available.   My father in law continued to have medical issues and found the care he received was essential while my mother in law became immersed in the social activities.  

After a few monthes we determined they were settled and would permanently stay at the facility.   We then were ready to prepare their home for sale.  Sadly we had to go through all their belongings and determine each items ultimate fate.  Their new home had limited space and if up to my mother in law she would want to keep every item she owned.  We had her work with us for a few days but then realized we were not getting anything done.  We soon started to go over and clean when she was busy and unaware we were doing the job without her.  As her dementia increased she soon forgot much of the task and soon things that were out of sight were out of mind.  We spent a few months cleaning and purging.    We spent countless hours going through over 50 years worth of accumulated stuff.  We donated much to Goodwill and called the trash man to come pick up filled barrels every Thursday during this time. 

At this point we did not know about most of the services available to help with this process and did the bulk ourselves.  We didn't think about doing an estate sale but now retrospectively definitely could have easily had a weekend garage sale to purge the bulk.  The benefits of an estate sale company is that they come in, organize and sell.  Then they typically will broom clean the place.  Instead towards the end we ended up hiring to help us clean prior to listing to rid of the remaining clutter and empty the attic.  We ended up paying them to take away a lot that could have instead been sold.  Since this experience I have visited many sales where people buy just about everything from clothes to used tupperware and we could have sold it all.  I have now built a database of estate sellers to recommend to my future clients.  If only I had known 4 years ago.    

Once the house was emptied we had to also fix some minor things up prior to getting ready to sell.  We repainted, repaired some minor items and staged the place to look clean.  I took the role of Realtor at this point and worked to get the house marketed and sold.  The process became emotional for the family once an offer was made and my challenge became to keep this as the best deal for my in-laws. The main objective was to have enough proceeds available to pay for their new place.  It was a sad process and our best offer ended up being from a builder who has since torn down and rebuilt the house. I tell my family the house was the chapter of their life at this property and they were now entering a new chapter at the Assisted Living facility.  My in-laws transitioned smoothly and for them there was no looking back.   They ended up being very happy with the transition and we knew they were in a safe environment.  

I have since become interested in helping others going through this process and earned my SRES.  I have many good resources for baby boomers who may have parents going through this phase of life.  

Wendy recently joined Coldwell Banker Needham.  She has been a realtor for over 8 years and knowing the area quite well can share a hands on local perspective.   Feel free to contact her directly or click here if you would like to learn more.  

Tuesday, June 6, 2017

Which do you value more Time or Money?

There is often an interesting paradigm when I ask this question to my friends and family members.  On one hand it may seem more practical to do something yourself as it would save you money but on the other hand, it could end up costing you more time than expected.  Perhaps this would have been time you could have spent at work or vacationing.  If you factor in the amount you are paid per hour, perhaps this is lost income and it would have been more effective to hire someone to do the job.  This can be a common dilemma when it comes to smaller household projects and it may come down to the pleasure factor, if in fact, you enjoy cleaning your home, mowing your lawn or assembling a piece of IKEA furniture.  

When you get to projects on a larger scale usually it is more cost effective to hire a professional to get the job done.  For example,  a tax accountant may be able to put together your return in a few hours and save you money by locating tax deductions you were unaware of.  You could alternatively spend a full weekend doing a return and end up missing some key deductions.

The old saying that "A penny saved is a penny earned" is not relevent when one is making a large monetary or life changing decision.  I have learned the hard way that in the long run it is always best to hire the person who will do the best job to get something I need done.   Even with IKEA furniture,  we have had to deal with the long lines at the store in the midst of putting a dresser together only to realize a critical piece was missing.  For a small amount more we could have paid someone to assemble and deliver a comparable piece of furniture and be done in an hour vs spending a good Sunday afternoon to get to the same point.  

In the real estate business it is always best to work with someone who knows the local area and market conditions.  A realtor will interview the buyer or seller to gain an understanding of their specific needs.  Their sole job is to work for the interest of the client to help them buy or sell a house.  They do not get paid until this job is complete.  It is recommended to do your research upfront but to work with an expert to guide you through the search or sell process.   

Too many times have I seen first time buyers spend months trying to search for a property, only to be unprepared or well positioned when ready to make an offer.  They often lose out to the buyer working with a realtor negotiating on their behalf to seal the deal.  The buyer needs to be in a competitive position with financing and readiness to understand the best terms when making an offer.  A buyers agent works on their behalf to help them be positioned and find the best property.  The cost for this service is most often paid through the sellers commission to the buyer and seller agents.  For the buyer,  there is no real logic for doing this on their own.  

Sellers often think they may save money by going about their property sale by themselves.  How many times do you drive by a house that says  FSBO "For Sale by Owner" one day and then see it hasn't sold a month later.    In the longer run,  the house hasn't had full market exposure, may not be well staged or may be overpriced.  

A seller agent would have guided the seller to best prepare this property for the optimal market exposure.  The commission fee they tried to avoid will be covered if they can sell their home quickly and for a competitive market price vs having the price driven down by keeping it on the market too long.   For the seller side to answer the true question of "Why"  one must also look at sales statistics.  Typically the home sold through a professional sells for 10-15% more therefore offsetting the commission cost.  On the time side, the seller who sells on his own will need to be available whenever a showing is requested.  In addition, once the home is sold often the buyer needs access to the property for inspections and follow up items.  A sellers agent will be there to help with these appointments and follow up on some time consuming things that may need to be handled along the way.

A well trained agent will advocate and help a buyer search for a property.  They will be able to walk a buyer or seller through any issues that may arise and refer the client to appropriate professional services as needed. In addition,  it is a real estate agents job to provide relevant  buyer information to a prospective buyer that may influence the buying decision.  The agent has a wealth of knowledge about the area and can refer the buyer to well known vendors or service professionals already well vetted.  

Beyond mandatory disclosures a seller is not obligated to disclose every issue about a property unless asked.  An experienced agent will lead the buyer to ask the right questions or prompt the buyer to have the appropriate professional inspect the property if he or she senses some concern.    Someone who tries to purchase a property without a professional runs the risk of being mislead.  On the seller side, an agent will advise the seller on which information must be shared with prospective buyers.  Someone who misinforms a buyer may be subject to liability.  Laws are constantly changing and both the buyer and seller have an increased risk of errors and liability if they are not properly guided through the transaction process.  I encourage both buyers and sellers to seek out professional services to help them save money and time in the long run.  This is when the saying "Time is Money" can be true.

Wendy recently joined Coldwell Banker Needham.  She has been a realtor for over 8 years and knowing the area quite well can share a hands on local perspective.  She has also recently earned the SRES  designation and looks forward to helping other baby boomers as they approach their next transitions.  Feel free to contact her directly or click here if you would like to learn more.