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Georgetown Real Estate Law Blog

What to research when buying a home

Buying a home in Delaware or any other state can be a stressful event. This may be true whether someone is buying a home for the first time or has done so in the past. There are several variables that a person needs to consider prior to making such a purchase. For instance, an individual will ideally consider where the home is located and which mortgage product best fits his or her needs.

When searching for a mortgage, it may be a good idea to do so with the help of a broker. A broker may be able to find a variety of mortgage products from multiple companies that service a given area. Getting approved for a mortgage before making an offer could improve the odds that it is accepted. Of course, buyers should only spend what they think that they can afford when buying a home. In some cases, this could be less than what they were approved to borrow by a lender.

Sellers generally don't tell ghost stories

A survey from Realtor.com found that 60% of those polled said that they didn't know that their homes were haunted before moving into them. However, Delaware residents and others may not even care if they are sharing their homes with ghosts. Furthermore, the survey found that buyers weren't too concerned about living next to a home that was rumored to be haunted. The survey also found that 20% of respondents said that they thought that they had lived in a haunted house in the past.

There are many reasons why an individual may believe that a house is haunted. For instance, people may take the presence of hot and cold areas in the home as the mark of a ghost. Homeowners may also think that shadows or creepy noises may indicate that they're sharing a property with a spirit. In some cases, homeowners may believe that items were moved by an invisible presence without their knowledge.

How to sell a home during the winter months

Homes don't traditionally sell quickly during the winter months in Delaware and other states with cooler climates. However, this doesn't mean that a homeowner can't get top dollar for his or her property. A smaller number of houses on the market may make those that are listed hotter commodities due to lack of competition. In some cases, it may actually be possible to list a home at a higher price point in the first two months of the year.

This is because buyers may need housing as they start new jobs or otherwise make changes in their lives that can occur right after the holiday season. Ideally, sellers will focus on making sure that they upload quality photos of their homes online. This is because buyers are less likely to travel during the winter months. Therefore, it is important to make a home so attractive that a buyer is willing to venture out on a cold or dark day to see a property.

How to go about updating an older home

Homeowners in Delaware may not be able to sell their houses for top dollar without renovating them first. This is because younger buyers aren't likely going to want to spend money to do so themselves while also trying to pay down student loans and other debt. Those who have been in their homes for many years or decades can start by painting or putting in LED lights.

It may also be worth the money to purchase stainless steel appliances as they are appealing to those looking for their first homes. If a home only has one bathroom, adding another can make it easier to sell. However a person chooses to upgrade a home, it is important that he or she get a positive return on the money spent to do so. It may seem overwhelming to spend thousands of dollars to renovate a property before putting it on the market.

Why escrow accounts are helpful

Individuals who are seeking to buy a home in Delaware may need to put money in escrow before their transactions close. Putting money into escrow can provide incentive for both a buyer and seller to act in good faith until a home sale closes. A lender could also take a portion of a down payment or mortgage payment and put it into an escrow account. In such a scenario, the money would likely be used to pay property taxes and homeowners insurance.

In some cases, landlords and renters will use escrow accounts to transact business. For instance, if a landlord refuses to make a necessary repair, a tenant could decide not to make a rent payment directly to that person or entity. However, the tenant would still be required to make the payment as called for in the rental agreement. The payment itself would go into an escrow account until the issue between the property owner and the renter can be sorted out.

Fixer-uppers aren't necessarily less expensive

According to a study from Porch.com, individuals who buy fixer-uppers will likely spend just as much on these houses as those who purchase a turnkey property. If a homeowner goes over budget when renovating a fixer-upper, that person could spend $25,000 more than someone who bought a home that didn't need work. Overall, homeowners in Delaware spent an average of $246,891 on a fixer-upper and $250,496 on homes that were ready to live in from day one.

Individuals who bought fixer-uppers said that saving money on the purchase price was their main motivation for doing so. This was true among buyers among all age groups. Of those who purchased turnkey homes, 35% said that they did so because they didn't want to spend time making repairs. The survey found that 28% of respondents who bought a home in good condition did so because they didn't have money to make repairs.

Sellers should consider remodeling their homes before a sale

Those who are looking to sell their homes in Delaware or anywhere else may have questions about whether to upgrade their properties before doing so. Generally speaking, it may be a good idea to make an upgrade if it significantly increases the home's value. It is also important to make an upgrade if it makes the home easier to sell. Typically, buyers judge a property based on what it looks like today as opposed to what it will look like after a remodel.

Furthermore, most buyers want to move into a house that is ready to use immediately. In many cases, individuals may be looking to buy a house because they don't want to pay rent anymore. If a home needs significant work, the buyer could be forced to make both a rent and a mortgage payment until their remodel is complete.

Canceling a home purchase agreement

Typically, a person in Delaware can back out of a home purchase after an offer has been accepted. However, when and how someone can rescind an offer depends on how the contract was structured. It also hinges on whether all parties have signed the document. If it has, it may be necessary to go to mediation to resolve the matter if a seller doesn't willingly allow the deal to be canceled.

In most cases, a purchase offer comes with a variety of contingencies. For instance, a buyer may say that the deal is contingent on securing financing or the results of a home inspection. If a particular condition isn't met, it is usually acceptable to back out of a home purchase without forfeiting any earnest money. Earnest money is a deposit a person makes to prove that he or she will make a good faith effort to buy the property.

Considering a 15-year mortgage

Most homebuyers in Delaware take out a mortgage loan from a bank to complete their purchase. After all, very few people can buy a house in cash outright. The traditional mortgage period stretches over 30 years at a fixed interest rate. However, there are also options for a 15-year, shorter-term mortgage. People buying a home may have several factors to consider when choosing the mortgage loan that is right for them.

First-time homebuyers often have access to special programs supported by the government to encourage Americans to purchase residential real estate. For example, there VA, FHA and USDA loans. Other buyers may still opt for a conventional bank mortgage.

Purchasing a home

When purchasing a home, one of the things Delaware residents have to consider is whether they want to make their mortgage payments biweekly or monthly. If the mortgage payments are made biweekly, the mortgage payoff date will be earlier, and the total interest costs will be lower. With a monthly mortgage payment, buyers are likelier to be paying more interest with a payoff date that is much later than that for a biweekly payment.

It is also important for homebuyers to compare lenders beyond just looking at interest rates. One of the other lender factors that should be considered includes lender fees. While a lot of closing costs tend to be standard with little variation among lenders, other fees for processing, closing, commitment and origination can vary significantly.