Real estate 101: Here’s what buyers should know
1: I want to get out of this apartment. What should l do first to get serious about buying a home?
A. Call a real estate agent.
B. See a lender.
C. Tell my landlord.
D. Buy a lottery ticket.
Answer: B. Lisa Ramler, president of the Lawrence Board of Realtors, said a lender is a good place to start. “Get pre-qualified,” Ramler said. “That is the first thing I tell people they should do before they even start looking for a home.”
Ramler said getting pre-qualified for a home loan is important because buyers – especially those looking for a home near the $100,000 level – must be prepared to act quickly. She said during this time of year first-time home buyers usually will be able to sleep on their decision to make an offer, but during the busy spring season the pace is much quicker. “If you aren’t ready to act the minute you walk in a home,” she said, “you could lose it.”
2: I’m looking at a Lawrence house that has a beautiful open field behind it. How worried should I be that somebody might build something on it?
A: You should pretty much count on it.
B. Don’t sweat it. The city buys a lot of open ground for parks.
C. It will happen someday, but somebody would tell you if it is going to happen anytime soon.
D. You’ll probably be the last person to move to Lawrence, so there will be no need for anyone to build on it.
Answer: A. Sheila Stogsdill, assistant director of the Lawrence-Douglas County Planning Department, said a good rule of thumb is to assume that green space won’t stay green.
“If you are on the edge of the city, most likely you won’t be on the edge of the city for long,” she said.
Stogsdill said that potential home buyers can go to the planning office – located on the first floor of City Hall – to find out if development plans have been filed for property near the home you’re looking at.
“We can usually tell you if you’re in the growth path,” Stogsdill said.
Stogsdill also said people shouldn’t always assume that a dead end street will remain a dead end. She said it wasn’t unusual for newer subdivisions to have streets that end, but then later are hooked up to a major street.
“Some people have come unglued when they hear a street is going to extend and connect to Sixth Street, for instance,” Stogsdill said. She said the planning office usually can alert potential buyers to those types of issues.
3: All right, I’m becoming a little concerned that my real estate agent is just telling me what I want to hear to make a sale. Whom else should I talk to find out more about Lawrence real estate?
A. Another real estate agent.
B. An insurance agent.
C. The neighborhood association.
D. A psychic.
Answer: C. Any of the options – all right, maybe not the psychic – would be a decent choice. But neighborhood associations in Lawrence can be a wealth of information, said Jeanne Klein, a former officer with the Centennial Neighborhood Assn. and the Lawrence Association of Neighborhoods.
Klein said neighborhood associations often can shed light onto issues such as flooding, crime and one very important topic in Lawrence – landlords.
“They know where the rental homes are and what homes might be party homes,” Klein said.
And Klein said the best thing about neighborhood associations is that they don’t have any direct financial interest in convincing a person to buy or to not buy a home in the neighborhood.
The city has more than 30 active neighborhood associations. A list of associations with contact information is available at the city’s Neighborhood Resources Department or online at www.lawrence neighres.org.
4: I just drove by a cute house that I’m really excited about. Whom should I call to get serious about buying the home?
A: The real estate agent listed on the sign.
B. A home inspector.
C. A real estate agent not associated with the house.
D. My rich brother-in-law.
Answer: C. There’s no harm in calling the real estate agent on the sign if you just want to take a quick look, but if you’re serious about buying the home, get your own agent. Ramler said that’s particularly important for first-time homebuyers. She said people need to understand the difference between a “buyer’s agent” and a “seller’s agent.”
The person listed on the sign will be a seller’s agent. That real estate professional is legally obligated to keep the best interest of the seller in mind at all times. In essence, that means a seller’s agent will be trying to get you to pay the highest price possible for the home.
A buyer’s agent has a legal obligation to keep your best interest in mind at all times. A buyer’s agent has an obligation to help you get the home for the most reasonable terms possible.
One other factor to keep in mind, though, is that most real estate agents are all paid via a commission. The seller of a home typically pays a 6 percent commission on the sale price of a home to his real estate company. The seller’s agent, generally, splits the commission with the buyer’s agent.
5: I shouldn’t have to worry about flooding issues when buying a home in Lawrence, should I?
A. No. There are lots of regulations that stop developers from building in flood prone areas.
B. No, unless you are in North Lawrence. That’s the only area of town that has had flooding issues.
C. Yes, there are several areas of town where a rain of 3 or 4 inches can produce problems.
D. No. It would be obvious if a home were in an area that would have flooding problems.
Answer: C. Chad Voigt, the city’s stormwater engineer, said any buyer should carefully evaluate a home for flooding potential. Voigt said people should not assume that a house is free from flooding problems if it is outside of North Lawrence or far away from one of the two rivers that flows through the city. He said improperly graded yards were often problematic.
“The water should be pointed to flow around the sides of the house instead of into the patio door,” Voigt said. “And I can tell you that is not always the case.”
Voigt said potential buyers should instruct home inspectors to specifically look at the yard and grading issues. He said it is an important issue to catch because it often can be hard to fix a grading problem without creating a flooding issue for someone else in the neighborhood.
In addition to hiring a home inspector, Voigt said a basement with more than one sump was a good indicator that the property dealt with a lot of water.
6: So, how much dough are we talking about? What is the average selling price of a home in Douglas County?
A. About $130,000
B. About $150,000.
C. About $180,000
D. About $200,000
Answer: C. According to the Douglas County Appraiser’s office, the average selling price for a home in 2005 has been $176,100. That’s up from $165,200 a year ago and up from $116,963 in 1998. If you are looking to buy a newly constructed home, the average selling price is $218,800, which is actually down from $233,300 a year ago.
In terms of negotiating a good price, Ramler said it is much easier to get sellers to reduce their prices on upper-end homes ($300,000 and up) than it is in the starter home market.