Home improvement TV shows make it look easy: Decide to move, look at a few houses (while seamlessly selling your own), make an offer, close the deal. In reality, the process of buying and selling a home is more nuanced.
Area Realtors recently shared the top questions they get from buyers and sellers so you can have a head start on the road toward calling a new place home.
What’s the process?
Talking to a lender — ideally one you’ve worked with before — is the first thing Jeff Williams, broker and co-owner of Ek Real Estate, tells clients to do.
The lender looks at the buyer’s credit and debts to calculate a suitable price range. While the urge to buy as much house as you can afford can be tempting, Williams warns against maxing out your budget.
“There’s a huge difference between what you can afford and what you should spend,” said Williams, who advises buyers to budget for life’s unexpected events.
“You need savings for when the hot water heater goes out,” he said.
The second step is looking at homes. Williams tells his buyers to take detailed notes about each house.
After finding “the one,” the buyer makes an offer. If the seller accepts, contract negotiations begin. The buyer can then hire professionals to conduct various inspections of everything from mold to gas lines — but buyer, beware: the cost of each inspection falls on you.
During inspections, a title company investigates any liens against the house that are on public record. When both parties are satisfied, the closing is scheduled, and the buyer takes possession of the house.
What exactly is a Realtor’s role?
“Some people think we’re the person that shows the houses, then we’re done,” Williams said.
In reality, a Realtor handles much of the back and forth that comes with dealing with inspectors, contractors and title, while communicating with the other party’s agent.
“One phone call can make 20 in a day,” he said.
How do I know if the asking price is fair?
The key is to look at comparable houses in the same neighborhood, Williams says. He warned against looking at homes in other areas, since every market is different.
How much can we negotiate the price?
The average discount from list price to sales price is currently about three percent, according to Doug Barrington, Realtor and current treasurer for Sunflower Association of Realtors. This means if a home is listed at $100,000, then it would sell for $97,000.
How many inspection repairs can we expect the seller to make?
The Sunflower Association of Realtors uses an aggregate total for repairs identified in the inspections, which, Barrington said, is normally 1 percent of the sales price.
If the sales price were $100,000, for example, the buyer could expect the seller to pay $1,000 in repairs. However, if the repairs total $1,000 or less, the buyer agrees to purchase the home in “as-is condition,” meaning the seller doesn’t need to address the repairs. If the total comes in at $1,500, then the seller and buyer negotiate on the $500 over the $1,000 aggregate.
Sound complicated? Sometimes it is.
“This can be very stressful,” Barrington said. “Sometimes contracts don’t work out at this stage.”
How is the market?
In the areas from Holton to Emporia, Barrington said, for the past three years, it has been a seller’s market. The low inventory of homes has driven up prices, making it a good environment for sellers.
While Barrington said Topeka homes appreciate, they do so below the national average.
“Each year, the local real estate has been increasing in value after we all saw property values decrease around 2008,” Barrington said.
Do I need to make major improvements to sell my home?
If you have significant damages, maybe. For issues like cracked foundations or other structural issues, Williams said to consult with an expert to determine if something needs to be replaced.
What cosmetic changes can I make?
Switching out bold, bright colors on the walls for more neutral earth tones can help make your home more appealing to today’s buyers. Williams said shades of gray are currently on trend.
If you budget allows for other updates, Williams said hardwood floors, subway tiles and brushed bronze fixtures are popular with buyers.
Regardless of whether improvements are made, Williams said, cleanliness is a must.
“It makes a big difference if you walk in and there’s dishes in sink,” Williams said. “People use all of their senses when they buy a house.”
Can I buy a house first?
Yes, but make certain that you have contingencies in place, such as a clause in the contract that says the purchase of the house is dependent on whether the buyer sells their current one.
“Otherwise you’re going to own two houses,” Williams said.