Real Estate Weekly: October 28, 2022

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What to do with a spare room now that you’re an empty nester

By Erik J. Martin

CTW Features

Your adult children have picked up and moved out. While that can leave an emotional void, it can also leave a vacancy in a spare bedroom or another area of your home that now begs for reinvention.

Sure, you can always choose to leave the aban doned room untouched –perhaps as a glorified closet

for your grown offspring to store things in, at least temporarily. But a more practical and long-term so lution is to reimagine and repurpose the living space as something new.

“Reinventing it has many benefits. For one thing, having a well-designed and inviting space can improve your overall well-being and happiness,” says Julio Arco, an interior designer and architect. “Addition-

ally, having a lovely space to relax in can be especially beneficial as you enter retirement, giving a sense of purpose and helping you stay active and engaged. Also, if you downsize your furniture and get rid of unused belongings in that room, you can create a more efficient and organized home.”

The popular option many empty nesters choose is to transition a vacant child’s

room into a spare guest bedroom. If you already have a bed and dresser/ furniture in the room, this is easily done. All that’s needed is perhaps a reorientation of furnishings along with new linens and a fresh blanket/comforter, new window treatments, and an overall decluttering. But particularly if you don’t plan to host over night guests, or if you already have another room

for that purpose, give care ful thought to a different option.

“If you are someone who is into arts and crafts, you can make your own art studio,” suggests Che nise Bhimull, an interior designer with his ZFC Real Estate. “Put up lots of shelves for your art supplies and keep indoor plants for a pop of color. It’s best if you have large windows in the room to let in natu ral light, giving the space a warm ambiance. You can place an easel stand opposite the window, put some music on, and work in peace.”

Or consider converting the space into a study room/library.

“I love having a room dedicated to reading and working. You can put up shelves for books, insert a minimalist table for working, and decorate the space per your preferences,” says Bhimull. “I love neutraltoned walls with some decor, like a statement art piece. Warm lighting can give the room a relaxing vibe, too.”

Dino DiNenna, a broker/ Realtor with Southern Life style Properties in Hilton Head, South Carolina, is a fan of movie rooms and home gyms.

“You can turn your unoc cupied room into a mini movie theater. Include some cool and luxurious seating options, a large flat-screen TV, and pick out a modern surround sound system. Replace the flooring with classic movietheater carpeting and purchase a popcorn maker so you don’t miss out on anything from your overall home theater experience,” advises DiNenna. “Alterna-

tively, incorporate a home gym, where you can ar range the required exercise equipment and reserve a quiet corner for yoga and meditation.”

Here’s an offbeat but prac tical idea: Turn that space into a pet room.

“Pets should have their own space now that you are an empty nester, and the kids are grown and gone. Think about giving your dog or cat the entire spare room and furnishing it with all their favorite items – like noisy balls and rope toys for puppies and tubes, ledges, and hanging fabric strips for cats,” says Dustin Fox, owner/Realtor of Fox Teams in Fairfax, Virginia.

Instead, ponder becoming a landlord and renting out your vacant space for an extra income.

“For owners looking to capitalize on an opportuni ty to make some spare cash, the continued shortage of housing across the country and the rising cost of living presents an interesting op portunity to make money on the side. Assuming the layout is suitable to provide a studio with private access to a bathroom and perhaps an area for a small kitch enette, you could wind up being an attractive rental space,” explains Shane Skelly, president of San Diego-based Left Coast Realtors.

“Ideally, this would be a first-floor bedroom where an exterior private access could be created, a bath room can be accessed, and the area can be walled off from the rest of the house.”

Overcoming financial hurdles to purchase your first home

Question:

We want to buy a new home but we’re not quite there yet. We don’t have the cash we need for a down payment, and our monthly payments mean we have too much debt. How can we get past these hurdles to buy a first home?

Answer:

Mortgage applications that get declined might actually be accepted if borrowers – and lenders – can bring additional resources to closing.

A recent study by Down Payment Resource (DPR) found that many failed mortgage applications were actually “recoverable” with the use of down payment assistance programs to improve debt-to-income (DTI) and loan-to-value (LTV) ratios. Improving these benchmarks, in turn, often allows borrowers to qualify for needed financing.

Many applications – 33% – “were declined for either insufficient cash-to-close or disqualifying DTI” but were eligible for one or more homebuyer assistance programs,” according to the study.

DPR found that “applying homebuyer assistance to eligible declined loan applications would have

reduced LTV by an average of 5.85%, making many of the loan applications recoverable. Lowering LTV can open the door to better and more affordable first mortgage scenarios, including conventional (rather than FHA) financing, reduced mortgage insurance costs and better interest rates.”

The typical borrower, according to the study, was eligible for 10 homebuyer assistance programs.

There are a variety of down payment assistance options offered through more than 2,000 programs nationwide. They are available from companies, unions, private organizations, and often governments at the local, state, and federal level.

What you can get depends on your eligibility situation. For example, some programs are for those in specific professions such as education, healthcare, law enforcement, or fire protection. There are also programs when someone in the household has a disability.

Some are directed toward first-time buyers and some not. However, the definition of “first-time” buyer is not as absolute as it sounds. In many cases, the term “first-time” buyers means you have not owned real estate during the past three years. Also,

Q&A Q&A

By Peter G. Miller

there may be special provisions to help divorced individuals who were real estate owners when married.

A down payment assistance program can be an outright grant, but other options are often available. There are down-payment reduction programs that allow you to purchase with 1% down, second loans, loans that are forgiven if you stay at the property for a certain number of years, interest-free financing, and deferred loans you don’t have to repay immediately.  Be sure to look at down payment assistance programs carefully. Ask about repayment terms – in some cases, you may be required to repay the grant if you sell before a certain number of years. Some programs require that you attend special classes, and most programs will look at such factors as your income, credit standing, debt-to-income ratio, and loan-tovalue ratio.

For additional information, speak with non-profit homeowner organizations, government housing offices, local real estate brokers, and local mortgage lenders.

Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.

Skagit Bay

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Can a new home lead to better retirement living?

By Marilyn Kennedy Melia CTW Features

Rising mortgage rates have pulled prices down some what, but a scarcity of homes for sale is preventing a significant price slide.

Many older homeowners, like those in the Seattle area that financial planner Samantha Kennedy counsels, wonder if cashing in on their home value and using part of their proceeds to fund retirement expenses would be a smart move.

Finding the answer, says Kennedy, involves probing whether the older owner will really find a suitable, less expensive home; and projecting future expenses against expected income with home sale proceeds fattening their nest egg.

Sell high, buy low?

Despite the dramatic price run-up recently, typically owners “over-value [their home price], thinking nothing is wrong with their house” says Raleigh, NC financial planner Jason Miles Deshayes. Call several real estate agents to garner value estimates, he suggests.

Factor in selling costs, which can run ten percent of sale price, adds Kennedy. Finding a less expensive home

may call for trade-offs, like moving farther from a city center.

Older downsizers often want to move into a continu ing care retirement community, adds Mark Johannsen, McLean, VA financial planner. He suggests selecting a community “well in advance of the sale of their home,” since there’re often waiting lists. Counting new home costs.

Kennedy says she first asks clients to add up day-to-day expenses like meals, and housing charges like property taxes and insurance, and then factoring in probable medical expenses and then including indulgences, like travel.

Because unexpected expenses can arise, Kennedy adds ten to twenty percent of clients’ living costs estimates. It could be that a lower priced home doesn’t pare back expenses significantly.

Reliable investment income?

Rising interest rates are a “double-edged sword,” says Kennedy. On the positive side, downsizers could earn three or more percent on safe, dependable investments like U.S. Treasuries. But inflation could outrun those returns, if it holds at current levels, she concludes.

in garage

areas,

East Jones Road in Sedro-Woolley,

NE W TODA

Welcome home to this beautifully appointed NW contemporar y home with upscale touches yet it feels inviting The fabulous sky painting on the vaulted, beamed ceiling in the living room is just one of many ar tistic features in this home. The dining room has a window seat and two sliding doors to access the covered brick patio. The kitchen has a breakfast room, a window seat, stainless steel appliances, granite counters, and so many cupboards and ex tra counter space for all your enter taining needs. Primar

bedroom has private access to the beautiful trex deck overlooking the landscaped backyard and concrete patio. The primar y bedroom also offers an en suite bath with, a shower, and vanity with ex tra storage & counter space, and a walk-in closet Upstairs there is a bonus room/ office/guest bedroom, with walk-in closet and a bathroom, with tons of storage. Large 2- car garage with ex tra space, all sitting on 1/3 of acre MLS#20007767

on peaceful, mostly pastured 5 acres with outbuildings (a barn and a storage building). A large, covered front porch and a two -tier deck on the west side of the home enhance your enjoyment of the outdoors; the back door deck is covered and offers built-in seating Gated drive Fruit trees, grape vines, and a garden

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with the four th side being the

Custom build your commercial enterprise: 13,361 square foot commercial tract (two lots) zoned C-2. Great location near recreation center; major grocer y store; hotel; restaurants; offices; health club; house and farm supply stores; gas stations; banks; and I-5. Water, Cascade Natural Gas, Puget Sound Energy, City sewer, and Comcast are all in the street.

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Danya Wolf (360) 708-8294

Danya Wolf