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For Delaware Renters, Why Not a Brand New Tesla (in 5 Years)?

Jul 25, 2017

My 5-year Tesla Plan is fanciful, but based on what could be the situation some Delaware renters can probably relate to.

The imaginary 5-year Tesla Plan participant could be any gainfully employed Delaware renter who has been living comfortably in a nice rental for the past few years. It’s either a comfortable home or a nice apartment: that doesn’t matter. What’s important is that the monthly rent has been rising. It’s now $1,570. This is now gobbling up just about every spare dollar of the Delaware renter’s income, perhaps leaving only an annual $6,000 bonus for savings, which the tenant has banked religiously for the past five years. The renter is driving a seen-better-days Subaru, newly paid-off. In fact, the renter has recently been tempted to take that $30,000 bonus savings and buy a brand new Tesla Model 3 sports sedan—but so far, prudence has won out (besides, the trove is $5,000 short of the Tesla’s price tag).

The 5-year Tesla Plan gets started with a call to my office (actually, any Delaware Realtor® could be called—but this is my Tesla Plan, after all!) The object is to find a suitable Delaware home to buy. This we accomplish with a spacious 3-bedroom 2 ½ bath in an out-of-the way location. Its asking price is low because the motivated seller has been absent for months and now, in July, the yard looks terrible. So it’s a real buy at the just-reduced asking price of $210,000. (Whether the actual number is $210,000 or $2,100,000—the logic remains).

The average nearby comps come in at $240,000, so the bank has no trouble offering a home loan at that week’s rate of 3.835%. The bonus trove will cover nearly 15% as a down payment (saving those annual bonuses instead of buying the Tesla was certainly a good idea)! Because the down payment was less than 20%, the new homeowner will have to add about $65 a month extra for private mortgage insurance (PMI)—but even so, it’s still a great deal.

The bottom line is a monthly mortgage payment of $1,137 including property tax, house insurance, and the PMI insurance. So the proud new Delaware homeowner is now saving $433 every month. This might seem to be an annual saving of $5,200—but that’s not so! There are two other financially lucrative things going on that weren’t available to renters.

First is the appreciation in the value of the house once the yard is back in shape. But that’s not part of the 5-year Tesla Plan—it’s just a long-term bonus.

The second advantage most definitely is: a hefty income tax break. During those first five years, the mortgage interest paid equals $32,636—the entirety of which is a federal income tax deduction. So is the $3,900 in PMI payments. In the 25% tax bracket, that comes to $9,134 less headed to Uncle Sam. When you add everything together, during the first five years, the new homeowner will have pocketed about $35,134.

That’s good because it just so happens that the Tesla Model 3 is being advertised at a starting price of $35,000. So who needs to even trade in the now-rusty Subaru? 

That’s my fanciful 5-year Tesla Plan—which gets you your new Tesla at the same time you are establishing a long-term Delaware real estate investment. Individual tax situations differ, and should be always be referred to a tax professional—but you don’t have to be driving a rattletrap Subaru to benefit from the moral of this story—which is the undeniable financial advantage in store for Delaware renters who make the arithmetic work for them when they choose to become Delaware owners. Also, it’s easy to start: just give me a call! Call/Text me Russell Stucki at (302) 228-7871, email me at russellstucki@remax.net, visit more listings at www.beachrealestatemarket.com

Making the Most of Delaware House Showings in Summer

Jul 25, 2017

When the Delaware weather turns sizzling, you might think that house showings might go better by holding off for milder weather. After all, as the mercury rises, energy levels tend to wilt, so prospective buyers willing to take on a big initiative—like lining up a new house—might seem to be in short supply. You might think that—but the evidence actually points in the opposite direction.

It seems that the hottest weather invites more home buying instead of less. At least that’s what the National Bureau of Economic Research suggests—and experts at Fannie Mae agree.

The NBER finds that “warm weather may have a positive impact on home sales.” In warm weather, if a home has features like access to a swimming pool or A/C, “buyers can see themselves enjoying the home on a nice day.”  

Indeed, Fannie Mae’s research into how consumers feel about buying a home at different times of the year points to a similar seasonal effect. Part of Fannie’s Economic & Strategic Research Group’s findings line up with real estate’s well-known seasonal bias. Part of the strength of Delaware’s traditional spring and summer selling season may be due to prospective buyers’ need to make a change before the new school year starts, but if so, it’s a strong enough incentive to obscure any discomfort brought on by the July and August heat.

It’s all welcome news for homeowners planning Delaware house showings at this time of year—but it’s still a good idea to make some weather-wise adjustments. Here are 5 tips for hot weather house showings:

  1. Let the A/C rip! Most experts say 72 degrees is the correct setting for central air systems—but I find that it’s really dependent on the difference between outside and in. When you walk through the front door, if the atmosphere gives you a refreshing lift (not a shivering chill), that’s the right setting.
  2. Be vigilant about smells. Summertime brings out any pet or musty aromas that aren’t as apparent during the rest of the year, so pay special attention to what your nose knows. If a dehumidifier helps eliminate a damp area, set it to work. This is also the right time to invest in quality scent-producing oils or candles.
  3. Refreshments. A pitcher of ice water with lemons or similar thoughtful provision will be greatly appreciated by your guests (and your Realtor®!)
  4. Green. The lawn and plantings are always central to creating the curb appeal that sets the stage for everything else, so keep the front yard as green and welcoming as practical.
  5. Leave lights on. Even though it can feel cooler in dark rooms, let the climate control do that work. House showings go better in a light and bright environment any time of year.

If your Delaware home has excellent cooling systems or an inviting swimming pool setup, now is the time to make the most of it. Give me a call to see if we can get started before summer starts to slip away! Call/Text me Russell Stucki at (302) 228-7871, email me at russellstucki@remax.net, visit more listings at www.beachrealestatemarket.com

Events that Trigger Buyers for Homes for Sale in Delaware

Jul 25, 2017

What are the most common changes in circumstances that send buyers out looking for homes for sale? What are the events that trigger typical prospects to comb through the Delaware listings, contact Delaware Realtors®, set out on house tours—and ultimately make the offer that results in the move to a new home?

The answer to that question may be different for everyone, but some in-depth research has come up with interesting similarities among groups of active homebuyers. It matches a conclusion that also conforms with common sense: namely, that the motivating events (or “triggers”) sometimes vary by age group. In other words, when we humans reach similar milestones in life, we often make the same housing decisions—even though the reasons for a couple of them may be mysterious.

I came across the details buried in a report put out this past spring by economist Lawrence Guo in Realtor magazine. The top line of the piece—the part that got the most attention—dealt with the homeownership goals of active home shoppers. “Privacy” was the leading goal; “physical comfort” was second; “stability,” third. Of the styles of homes for sale, “ranch homes” were the most sought-after; the kitchen was considered the most important room, etc. None of these findings were at all mysterious or unexpected.

But when it came to revealing the impetus for a move in the first place—the life event or changed condition that set people checking out the current crop of homes for sale—a few could definitely be tied to the age group of the prospects. Since more than 20 triggering events were identified—each broken down into five different age groups—the resulting graphic was so complicated that most readers’ eyes probably glazed over before many conclusions could be drawn. Most of the findings were unremarkable—as when youngsters weren’t as likely as oldsters to cite “considering retirement” as a triggering event, or when some events were equally named by all age groups. But some were less predictable:

  • Relocating to a new city: most common among 35-44 year-olds; least among those 55-64.
  • Favorable home prices: most cited by 25-34 year-olds; least (fewer than half of that group) among 35-44 year-olds.
  • Favorable interest rates: most pointed to by 45-54 year-olds; least among the 35-44 year-olds … and equally cited (about 1 in 10) by all the other age groups.
  • Desire to live closer to family/friends: as expected, ‘way more prominently named by the 65+ group.

It doesn’t take a rocket scientist to ferret out why home prices are most important to the youngest group, but the greater importance of interest rates to the 45-54 group but not the 35-44s? That one will take some thought. Not a surprise is the across-the-board Number One triggering factor among every age group: “tired of current home”!

If you fit in with that extremely common group, right now there are extraordinary values to be had among today’s homes for sale in Delaware. Give me a call to lay out an itinerary for visits to the ones that match up with your own specific wish list requirements! Call/Text me Russell Stucki at (302) 228-7871, email me at russellstucki@remax.net, visit more listings at www.beachrealestatemarket.com