Are the kids are all right; how kids cope with moving

Buying and selling a home is surely an exciting time, but it’s also a stressful time. Even the most organized person can feel the pressure. Of course, most people tend to redirect their energy into the practical aspects of buying, selling, and moving; such as ensuring their loan documents are in order, packing, and/or lining up a mover. If you have children, then additional things to worry about may be added to your already full plate of “to do” items, such as school matriculation and finding summer camps. But how are your kids coping with the move?

Like most things in life, moving to a new home is a process; the emotional process of moving involves various feelings that are expressed in no specific order and can sometimes be felt simultaneously. To complicate matters, your reasons for moving can also amplify this stress (divorce, job, etc.). Most children and their parents cope adequately during this time, but some may need additional attention and assistance.

Once you realize how hectic the pace can be while home searching/selling combined with moving, your attention to your kids may be slightly different. Although your children can experience the same feelings you may feel, their expression of those feelings can be vastly different. Some children may not be able to verbalize their feelings and their coping skills can vary.

Change can elicit both welcome and unwelcome feelings. The excitement and anticipation of a new neighborhood and school, and the sadness of leaving friends behind are just some of the feelings that children may experience while going through the process of moving to a new home. However, some kids may be more affected than others by the stress of the process and may seem more anxious, angry, and/or exhibit other behaviors.

Because children do not articulate their feelings like adults, some experts recommend that you “tune” into your children to determine how well they are coping. Of course, depending on your child’s age, indications that they may be having difficulty may vary: younger children may have increased incidents of bed wetting, incontinence and thumb sucking; while adolescents may become truant, defiant, and/or agitated.

Experts discuss the benefits of being open and honest with your children about moving, as well as informing them as soon as possible. Child experts have also recommended increasing your availability to your kids as well as acknowledging their feelings during the process. Younger children may need more comforting than usual, while older children may need to talk about the process.

Additionally, establishing continuity and allowing involvement in the process (when appropriate) can make the transition easier on children. Before the move, depending on the distance, you may be able to have your children visit the new school and possibly meet some of the kids in the new neighborhood. Have children help in packing and/or engage in other appropriate activities.

Many resources exist to assist you and your children cope with the process of moving to a new home, as this article is not intended to provide medical or psychological advice. Besides the many books written about the subject, school counselors, teachers, and pediatricians, are just a few professionals who may be able to assist you during this process. Of course, you should consult a medical, psychiatric, and/or a psychological professional if you have concerns about your child.

by Dan Krell © 2011

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

Home sellers and sale prices; what is the data saying?

by Dan Krell © 2010
real estate for sale
As the housing market goes into a third year of turmoil, you have to wonder how area home sellers are coping with a prolonged challenging housing market. One indicator to consider is the home seller’s price expectation versus what home buyers are willing to pay; which is the list price as compared to the actual sale price of a home.

Before we check out the percentage of list price received at settlement, let’s review how home sellers may have become used to consistent and significant home price appreciation. One indicator to consider is the House Price Index (HPI), which is used by the Federal Housing Finance Agency (FHFA) to indicate changes to residential home prices. The HPI is the percentage home value change relative to the prior year; the HPI indicated in this column is for the local Metropolitan Statistical Area (MSA) of Bethesda – Rockville- Frederick.

During the 1990’s home price appreciation was sluggish at best and did not have significant quarterly appreciation until the late 1990’s. The HPI indicated that area home prices depreciated in Q4 1990 and Q1 1991. However through Q3 1992 to Q3 1997, home prices were mixed; there were eight quarters of depreciation and ten quarters of appreciation of less than 1%. The last two years of the decade showed increasing appreciation when the HPI ranged from 2.25 to 3.63; then a significant appreciation for Q3 and Q4 of 1999 when the HPI exceeded 5.

But oh the 2000’s! If you compare the sluggish housing appreciation in the 1990’s to the seemingly ever increasing market in the 2000’s, it appears to be a stark contrast. The 2000’s saw quarterly appreciation through the second quarter of 2007. During the beginning of the 2000’s, the HPI increased the first eight quarters from 6.76 to 13.82. Then from Q4 2003 through Q2 2006, the HPI did not fall below 12 and had four quarters when the HPI was above 20 (yes, there was annual appreciation over 20%)!

home for saleHistorically, area housing prices have not been affected by economic turmoil as much as it has recently. Even during recessionary periods in the 1970’s and the 1980’s, the HPI was negative for no more than four consecutive quarters (for example: Q4 1982 to Q3 1983). Unfortunately, recent housing prices have had a negative HPI for thirteen consecutive quarters (since the second quarter of 2007).

Thirteen consecutive quarters equates to just over three years of home price depreciation for the local MSA. So, just how well are home seller’s acclimating to the new housing market?

According to single family home data collected and reported by the local MLS, Metropolitan Regional Information Systems, Inc. (MRIS), Montgomery County home sellers received a price shock in 2007 and 2008; sellers received about 92% of list price in 2007 and about 89% of list price in 2008. Since then, Montgomery County home sellers seem to have adjusted to the market as indicated by more recent percentages of list price received at settlement, which appears to have returned to pre-crisis levels (about 94% or more of list price).

Now that the housing market changes are no longer dramatic, most home sellers have accepted the nature of the housing market and price their homes accordingly. For those who haven’t yet accepted the new housing market, you may be in for a (price) shock.

Comments are welcome. This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of November 1, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.

A developmental theory of home buying

by Dan Krell © 2010

The average number of lifetime home purchases by a home buyer.

Recently, a home buyer told me that it will take him time to find his “perfect” home. You see, he is looking for the perfect home because, as he put it: “I only have one more move left in me…” Although no one has ever calculated the number of homes an average home buyer purchases over their lifetime, someone once decided that people typically purchase a home every five to seven years. Keeping this rule in mind, he has at least two moves left.

Interestingly, with all the life planning people maintain for their finances, career, and estate, most people do not say things such as, “I will own four homes in my life…” For many, home buying and selling tend to revolve around life events and personal preferences that change during a person’s lifetime. Of course some people contently live in one home for their entire lives, and some never become a home owner.

If the National Association of Realtors® data regarding first time homebuyers is correct, then it very well may be that the average person may have three home purchases during their lifespan, notwithstanding life or financial crises or job relocation. According to the National Association of Realtors® Home Buyer’s Home Preferences (published by NAR, 2007), most people tend to move within a fifteen mile radius from their previous home; a majority of these moves are within five miles. These three moves may actually parallel the adult stages of Erik Erikson’s theory of human development.

Home_buyer_movingThe National Association of Realtors® Profile of Home Buyers and Sellers (published by the NAR, 2008 and 2009) states that a majority of first time home buyers fall into the 25 to 34 year old range with a median age of 30 years old. This is a time period that coincides with Erikson’s Intimacy vs. Isolation stage (ages 20 to 34) when people are forming commitments; people are beginning in their chosen careers and formulating family plans.

A person’s second home is purchased for various reasons. However, the National Association of Realtors® Home Buyer’s Home Preferences (NAR, 2007) states that most home buyers prefer newer homes; and of those home buyers, the greatest majority desire a newly built home. This time period may coincide with Erikson’s stage of Generativity vs. Stagnation (ages 35 to 65); when a person focuses on their societal contributions and their growth in public prominence.

Erikson’s final stage of Ego Integrity vs. Despair may coincide with a person’s third home purchase because it is a time when people begin to define their life and accomplishments. The third home purchase may be the “reward” for working many years; often focusing on amenities and luxuries. Even though many downsize during this stage, the home tends to be focused on making them comfortable; not only having home features that are a luxury to them but also convenient to local services.

So the buyer proclaiming having only “one more move” in him, may in due course decide he was wrong. Although he may be anticipating how the buying and selling process relates to his life, he is certainly looking for a home he will not outgrow. However, it may be that in seven to ten years I may again hear him proclaim, “I have only one more move left in me.”

Comments are welcome. This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of October 25, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.

How unknown problems jeopardizes the home sale

by Dan Krell © 2010 home search

“What you don’t know won’t hurt you” is an idiom that implies that you can be happier by not looking into the unknown. However, this does not apply to real estate transactions. Homebuyers and sellers both invest a great deal of time and money in the process prior to settlement and do not want to have it all squandered on an unknown that can ruin their home sale.

Homebuyers typically spend about twelve weeks searching for a home (according to NAR’s Profile of Home Buyers and Sellers 2009), and can spend a nice sum of money when the cost of a home inspection, loan application, appraisal, gas for driving, time off of work, etc. is totaled. Likewise a home seller invests time and money in preparing for closing all the while having their home sale depending on the performance of the buyer.

Unfortunately, a transaction can sometimes become laden with unknown landmines waiting to blow up the deal. Although most real estate agents try to vet their clients before entering into a contract, hidden issues threatening the closing may not be revealed until weeks after a ratified contract and sometimes not until closing. If you’re a buyer or a seller, it makes sense to ask about your counterpart; and if there’s opportunity, take the time to find out more about them prior to becoming invested in the sales contract.

Take, for example, divorce. Although divorce is a common issue that is encountered within a transaction, it is sometimes not fully disclosed and can affect the outcome of the home sale. A homebuyer’s ability to purchase a home could be affected by shared accounts that have not been revealed or responsibility is refused by their spouse; the resulting homebuyer’s high debt ratio could disqualify them from their mortgage. Likewise, a home seller going through a divorce can be tripped up by an uncooperative spouse who is unwilling to sign the deed.

home buyer informationHomebuyer issues can pose potential problems if not evaluated properly. Undisclosed credit, financial, and legal issues can pop up any time throwing a wrench into the home sale; sometimes these issues don’t reveal themselves until the end of the process because the loan officer and/or agent did not ask the right questions or ask for all the required documentation. Additionally, unlicensed lenders and loan officers that continue to attempt to do business can also be a potential problem as they may be prevented from providing the homebuyer a mortgage.

Unknown home seller issues may also jeopardize the home sale; surprise issues are typically related to providing clear title to the buyer, but can also include various legal problems. Title defects may include unpaid mortgages and (tax and mechanics) liens. Sometimes a seller may need third party approval from a trustee or lender (such as in bankruptcy or foreclosure), which can either prevent or prolong the sale.

Due diligence prior to entering a sales contract may prevent sticky problems; searching available public records and reviewing disclosures for discrepancies could provide extra information that can assist you in your decision process. Undisclosed buyer and seller issues, although aggravating, do not always kill the home sale and often are resolved. However, consulting an attorney about recourse over a soured real estate transaction is always a good idea.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of September 27, 2010. Using this article without permission is a violation of copyright laws. Copyright © 2010 Dan Krell.