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Georgetown Real Estate Law Blog

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.

Buying a home while student debt is a factor

Student loan debt is a significant financial burden for many people in Delaware and across the country, and the weight of this debt can prevent people from taking steps like buying a home. Around the United States, there are over 44 million people who owe a total of $1.5 trillion in student debt. Of those, around 2.2 million people have a balance of $100,000 or higher, and $31 billion in student loan debt is currently 90 days or more overdue. Borrowers aged 40 and younger are particularly likely to carry student debt as they owe $850 billion of the outstanding student loan burden.

While student loan debt can be a major burden on anyone's balance sheet, it need not prevent people from taking the step of buying residential real estate. People can help bolster their chances of being approved for a mortgage despite their student loan debt by improving their FICO credit scores, for example. If people work to keep their credit scores at 750 or higher, they are considered to have excellent credit. This can play a major role in a successful mortgage approval.

Low supply and high demand driving up home prices

People shopping for homes in Delaware are likely to encounter rising home prices. A nationwide imbalance between the numbers of sellers and buyers has acted to increase listing prices and shorten the time that available homes spend on the market. A report produced by the data and analytics firm CoreLogic recorded a 1.1 percent increase in home prices between April and May 2018. Since May 2017, home prices have gone up 7.1 percent. CoreLogic predicts that by May 2019, home prices will have gone up by another 5.15 percent.

A survey conducted by CoreLogic and RTi Research found that 41 percent of renters aspire to buy a home in the next 12 months, but only 11 percent of current homeowners have any plans of listing their homes for sale. With such a constrained supply of single-family homes, buyers can expect little relief from rising home prices. An economist at CoreLogic said that the supply of entry-level homes is especially tight.

Ways homebuyers can protect themselves

When buying a home in Delaware, it is important to put in as many safeguards as possible. For instance, at an open house, buyers should ask for a seller's property disclosure. It will list everything that the seller knows is wrong with the home or was built without proper permission. As a general rule, a disclosure form that has nothing on it is a bigger warning sign than a form with several problems listed on it.

Buyers are generally allowed to break a purchase agreement if a homeowner doesn't disclose a problem that was known prior to the deal being struck. It may also be possible to put a series of contingencies into a purchase contract. If these contingencies cannot be met, the deal could be canceled by the buyer. Common contingencies include being able to get a mortgage or inspect the home.

What to consider when buying a home

Those who are currently renting in Delaware may long to be homeowners. Considering the current state of the housing market, however, it could make more sense for renters to put off making a home purchase. Those who are interested in buying a first home should make sure that they won't be house poor. This means that a homeowner is constantly at risk of losing the property.

Other factors to consider are the impact of other debts on one's finances before accounting for a mortgage payment. Ideally, an individual will spend no more than 30 percent of his or her monthly income on car, student loan and similar types of payments. Assuming that a potential buyer is in good shape financially, it is a good idea to consider the extra costs associated with acquiring a home.