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Georgetown Real Estate Law Blog

Tips for selling a home during the holidays

The holiday season isn't usually the best time for a home to be on the market because of all the celebrations that take place and the number of people who enter and exit the home. With a few tips and the assistance of a real estate agent and attorney who can help complete the paperwork required for the sale, the process can often operate in a smooth fashion.

Holiday decorations should be kept at a minimum with a few simple decorations to adorn the front door and the walls that will offer ideas to someone interested in buying the home. A home that is for sale needs to be kept as clean as possible, even in the winter months. Leaves should be raked out of the yard, and a rug could be placed at the entry doors for guests to wipe their feet to prevent mud from getting on the floor.

Home buying mistakes

Many individuals and couples living in Delaware are interested in purchasing a new home. It isn't unusual, however, for prospective homebuyers to begin the process only for things to go awry when it comes to securing financing and closing the deal.

Many of the mistakes people make when buying a home are financial. One significant issue is that many people begin shopping for a home before they know how much of the mortgage they could qualify for. Financial experts generally recommend that homebuyers find a reputable lender and get pre-approved for a mortgage before searching for a home in earnest. After all, there are few things worse than falling in love with the home only to find that one simply can't afford it.

Titling a home owned with a partner

Delaware residents who buy a house with a spouse may have legal protections. However, those who buy a home with someone they are not married to may not have many options if something goes wrong. According to a 2013 study from Coldwell Banker, roughly 25 percent of millennial couples owned a home together. Low mortgage rates and tax advantages were among reasons cited for making such a decision.

One issue that those living together will need to resolve is how to handle the cost of owning a home. It is rare that costs can truly be split 50/50, and it may be necessary to determine that repairs or other housework have a monetary value. The couple may also need to decide who holds the title. If only one person holds the title, the other will essentially pay rent even if both call the house their home.

Selling a home during the holidays

Selling a home in Delaware during the time of year when most people are preparing for the holidays can be challenging. Sellers who are willing to be creative might find it's a lot easier to find a buyer than they originally thought. Halloween through New Year's could turn out to be a great time to market and locate interested buyers without having to lower the selling price.

The holidays are a great time of year for themed open houses. Homeowners could be successful at selling their house more quickly if they decorate in a holiday theme and invite real estate agents and buyers to take a look. This might be even more fun if most of the homeowners in the subdivision decorate the outside of their homes as well. The festive spirit might induce a buyer to consider homes that weren't previously on their radar.

Looking for a home during the fall

Prospective homebuyers in Delaware may be interested to know that they are still able to find the home that they want even if they do not find one from May to September, which is believed to be the best time of year to purchase a home. The season of fall also offers some advantages for people looking for a new home.

Because the housing market tends to slow down near the end of summer and the interest in homes is not as high, sellers may be more willing to negotiate. This is a good opportunity for homebuyers to get a better sale price and to push for more incentives, like using a seller credit to have the carpeting replaced.

Higher home prices push demand for adjustable rate mortgages

Families shopping for homes in Delaware earlier in the year probably needed to make high offers to buy a property. Economists at CoreLogic and Capital Economics agreed that the low inventory of homes for sale has driven prices higher. Although mortgage interest rates remain extraordinarily low, higher home prices have caused people to select riskier adjustable-rate mortgages instead of predictable fixed rate 30-year mortgages.

From the first quarter to the second quarter of 2017, the demand for ARM loans increased of 40 percent. The year before, the spring-time bump in applications for ARMs only reached 15 percent. Real estate analysts interpret the greater demand for ARMs as a sign that high home prices are straining people's ability to finance home ownership.

Why Americans have lost interest in buying homes

The U.S. home ownership rate is currently at 63.7, which is one of the lowest numbers in American history. It has become increasingly common for Delaware residents and others to rent instead of buy. According to a survey of 2,000 Americans, 71 percent said that this was because the process of buying a home was too complex. In some cases, getting a mortgage can take about a month whereas the process of renting a home or apartment may only take days.

Of those surveyed, 70 percent said that it was too hard to come up with a down payment. Many believed that they wouldn't be able to afford one until their late 30s. However, it may be possible to use an FHA loan that comes with a down payment of just 3.5 percent instead of the standard 20 percent. The average down payment for a first-time buyer is just 6 percent.

What to know about buying a home after age 50

In 2016, 30 percent of first-time home buyers were people between the ages of 52 and 70. Although it may be possible for older Delaware residents to buy a home, it may not necessarily be the best decision. First, older buyers need to make sure that the home they buy will fit their needs as they age. For instance, it may not be a good idea to buy a home with stairs if a person can't climb them.

It should also be in an area that fits a buyer's lifestyle. Ideally, a buyer will spend time in that area before acquiring a property to live in for the long term. Those who don't like to do a lot of maintenance may also want to look into the cost of having someone mow the lawn or take care of other tasks. As with anyone looking to buy a home, financial factors will also need to be considered.

Tips for first-time home buyers

Many Delaware residents are planning to buy their first home this year. However, as they approach this exciting milestone, there are several things that they should keep in mind to make sure things go as smoothly as possible.

The first thing people should do is calculate the real estate price they can comfortably afford. According to financial experts, housing costs should not exceed 30 percent of a buyer's income. In fact, some mortgage lenders recommend that loans do not exceed 28 percent of a buyer's income. Once a price range is established, people should work on saving for a down payment of 20 percent and an emergency fund that will cover at least three months of emergency repairs and other unexpected expenses. That down payment cushion will help to mitigate the chances of the buyer being upside down if home values drop.

Bill would allow use of alternative credit scores for mortgages

Although the change is unlikely to be immediate, in the years ahead, Delaware residents who are seeking a home mortgage may be able to do so with lenders who use alternatives to FICO in determining credit scores. The bill is cosponsored by a Republican and Democratic senator and would require Freddie Mac and Fannie Mae to consider such alternative credit scores as FICO ScoreXD or the VantageScore.

While the traditional FICO score looks at credit card payments, mortgages and other loans, these alternative credit scoring methods examine a larger variety of payments including those for rent, utilities and cell phones. This may make mortgages more accessible to people who have not built a credit history in the traditional way. There have been efforts to introduce similar measures for several years. According to the Consumer Financial Protection Bureau, 26 million people lack a credit history with a credit reporting agency. Furthermore, the credit history of many people is not substantial enough to create a credit score.