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Georgetown Real Estate Law Blog

How to maximize the value of a bonus room

Those who are looking to sell a home in Delaware should highlight any finished basement or bonus rooms that a property has. This is because that extra living space could appeal to buyers and increase the property's value. However, sellers will need to properly showcase that extra space in a way that appeals to buyers in specific ways.

For example, young couples may want to see if an extra room can be used as a nursery or play room for the kids. Those who are interested in improving their health could see if the space can be used as a gym or yoga studio. As a larger percentage of Americans embrace video games, it may be possible to showcase a finished basement or extra bedroom as a game room. Such a room should have plenty of electrical outlets and room for a large table.

Student loan debt may be making it harder to buy homes

Individuals between the ages of 24 and 32 owe roughly $1.5 trillion in student loan debt. This is one of the reasons why young people in Delaware and throughout the country are not buying homes, according to a Federal Reserve study. However, home ownership has been down among all Americans between 2005 and 2014.

In 2005, 69 percent of Americans owned homes. In 2014, only 65 percent did. For those between ages 24 and 32, home ownership rates dropped from 45 percent to 36 percent. According to the report, the average per capita student loan debt increased from $5,000 to $10,000 during the period analyzed by researchers. Much of the increase happened after the start of the Great Recession. This was a period of high unemployment during which there was a greater demand for a college education.

How to prepare to buy a home

House hunters in Delaware may benefit from adequate preparation before starting their searches. Doing so may ensure that they find a home that fits their needs as well as a loan that fits their budget. The first step in the process should be to do a credit review, and individuals can get a free copy of their credit report once a year.

Another important step is to create a list of things that a home must have. For example, a dream home might have three bedrooms or be located in a certain school district. While the real-life property may not have everything a buyer wants, it should have two or three of those characteristics. Prior to making an offer, a prospective buyer should understand the type of paperwork that he or she may need to sign. This will make it easier to develop an agreement that is in their best interests.

How the housing market could look in 2019

The housing market in Delaware and throughout the country is forecast to look different in 2019 compared to 2018. In 2019, the number of available homes is expected to increase while the number of buyers is expected to decrease. Mortgage rates are predicted to rise over the course of 2019, which may mean that some people will still be unable to afford their desired homes. Of course, fewer buyers and more inventory could mean less competition for those in the housing market.

Those who are looking to sell their homes will likely need to pay greater attention to how they price their properties. Failing to provide competitive list prices could mean that buyers decide to look at other properties instead. It is expected that home prices will increase up to 3 percent in 2019. This compares to the roughly 5 percent growth in 2018. In addition to more properties available for sale, there will be an increase in the types of properties available.

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.