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Georgetown Real Estate Law Blog

Why winter may be good for home sales this year

In most years, homes in Delaware tend to move slowly during the month of December. However, in 2018, that may not necessarily be the case. This is because many buyers are wary that interest rates are going to continue climbing throughout 2019. Currently, interest rates are just below 5 percent. As a lack of inventory has caused housing prices to increase rapidly, interest rate increases may result in significantly higher mortgage payments.

Price appreciation has caused some to be priced out of the market, and both new and existing home sales have started to slow. One potential silver lining is that with fewer buyers on the market, prices are starting to flatten out or at least not appreciate as quickly. Buyers may also benefit because prices may be lower in the winter compared to the summer in most years.

Negotiating the terms of a home purchase

There are many different items that can be negotiated when buying a home in Delaware or any other state. For instance, it may be possible for a buyer to ask a seller to contribute to the closing costs. Generally speaking, closing costs equal up to 5 percent of the cost of the home. These costs can be covered upfront or provided to a buyer in the form of a credit.

To improve the chances of an offer being accepted, buyers can offer to close the deal in a timely manner. However, buyers should ask to be granted as much time as necessary to inspect the home and obtain financing. If any issues are discovered during the inspection process, it may be possible to ask that they are taken care of by the seller. Alternatively, the price of the home may be reduced to reflect the true condition of the property.

Housing market likely to calm down for buyers

Increasing home prices have allowed current homeowners in Delaware and throughout the country to accumulate new wealth. However, for those who were looking to buy their first homes, the rapid appreciation was pricing them out of the market. Recently, increasing mortgage rates have played a key role in making homes more affordable. As market conditions cool, buyers have been able to avoid bidding wars or ask that sellers pay closing costs.

Throughout 2018, both new and existing home sales have been less robust than in previous years. While the economy is still strong, this lull could provide opportunities for buyers that hadn't existed in the past. Although mortgage rates are now topping 5 percent in some cases, they are still low by historical standards. During the second half of 2017, interest rates were about a percentage point lower.

How to coordinate a sale and purchase at the same time

For many Delaware homebuyers, it's necessary to buy and sell a property at the same time. While this needs to be planned in advance, it can be done in a relatively smooth manner. It's generally easier to sell first before buying a new home. In such a scenario, it may be a good idea to put contingencies into the purchase offer.

The offer should be contingent on the sale of a buyer's current home. However, many sellers will balk at such a contingency as it creates doubt as to whether the home will ultimately sell. Those who are financially able to do so should consider keeping both their current home and the new property temporarily. If a person plans on selling a current home before buying another one, it may be best to coordinate the timing of the sale and purchase.

Milford City Council approves zoning change for wellness village

With the population aging in Delaware, the Milford City Council approved a nursing and rehab center proposed by Nationwide Healthcare Services. The center would anchor a wellness village that would lease spaces to multiple tenants like a child daycare center, pharmacy, medical offices and possibly a venue for public meetings. The company needed a zoning change to build on land previously occupied by Bayhealth Medical Center. That city had originally zoned that land for only the hospital.

The new zoning applies to roughly 22 acres formerly used by the hospital that relocated. Nationwide will proceed immediately with the development of 12 acres. Representatives from the company continue to meet with a committee of residents to determine the future of the remaining 10 acres. A news release from Milford stated that the updated zoning for the wellness village project also addressed surrounding parcels. The city consolidated the zoning for the whole area and now allows flexible uses.

Millennials bringing technology to real estate purchases

Millennial homebuyers in Delaware and other parts of the country are changing the way real estate purchases and transactions take place. It wasn't long ago that no self-respecting homebuyer would make a decision about a home without physically visiting the property. Today, younger, tech-savvy homebuyers are fully embracing virtual reality tours and the use of mobile apps to apply for mortgages and complete new home purchases.

With residential real estate, homeowners of all ages typically start their search for a new place to call home online. However, buyers 36 and under, who made 34 percent of all home purchases in 2017, are going even further by participating in live streaming open houses, virtually checking out potential homes instead of giving up half a day to visit in person, and completing the mortgage and closing process faster.

Renting is becoming less expensive than buying for many

Those living in Delaware and many other parts of the country may find it less expensive to rent a property than to own one. According to a report from Realtor.com, the cost to buy a home increased 14 percent between July 2017 and July 2018. The cost includes taxes and insurance as well the mortgage payment itself. The cost to rent a home increased by only 4 percent during that time period.

The rising cost of owning a home could price some out of the market even if they can afford a large down payment. Overall, the rate of homeownership in the United States is 64 percent. In areas where renting is less expensive than owning a home, that number ranges from 23 to 59 percent. Owning a home is considered to be important as it allows owners to build wealth for themselves and their families.

How to sell a home for the best price

There are many items that Delaware residents should consider when it comes to selling their home. For instance, selling a home on a Wednesday or Thursday could help it sell for the best price or get it off the market the fastest. This is because people start making plans to see homes just prior to the weekend. Therefore, a home listed on these days are likely to be seen by those looking at listings online.

When creating a listing, it is a good idea to have professionals take pictures of the house. Doing so makes it easier to properly highlight both interior and exterior spaces. It may also be worth a homeowner's time to create a virtual tour of the property as it gives buyers a better idea of the home's layout. When showing a home, it is critical that it is staged properly. This is true regardless of how large or small the home is.

Why homes will not sell

Delaware residents who place their homes on the market should be prepared for the fact that their homes may not sell right away. Not every area in the country is a seller's market in which homes can receive multiple buying offers that are above asking price. Individuals who are struggling to sell their home may want to take the time to consider why their home is not attracting the buyers they want.

Homeowners may want to begin by making sure that the photos of the home they place online are high quality. A realtor may be consulted about what types of photos reflect the best features of the home and should be posted. For homeowners who are selling their homes on their own, it may be worth the investment to use a professional photographer.

Mortgage insurance and down payments

Potential homeowners in Delaware often believe that they must have 20 percent of the total sale price available for a down payment in order to purchase a property. Given the prices of real estate, this figure can seem to put homeownership well out of the reach of many individuals, couples and families. However, it does not actually take one-fifth of the total purchase price in cash in order to be able to buy a home. The difference between the cash down payment and this amount is guaranteed by mortgage insurance.

Mortgage insurance gives coverage to mortgage lenders and institutions like Fannie Mae for the risk of lending to borrowers without a 20 percent down payment. The insurance is paid for by the borrower and the premium is generally included as part of the monthly mortgage payment. Mortgage insurers conducted a study to highlight the importance of the insurance in making residential real estate purchases viable for many average families. The report from the industry may have been produced in response to announced plans by the Federal Housing Administration (FHA) to cut its own mortgage insurance premiums.