Especially when the market is moving briskly, selling your Rehoboth Beach, DE home can put you up against a chicken-egg quandary. “Which came first?” is as unanswerable today as when we argued about in the second grade—yet when a key decision about selling your home depends on answering a similar puzzler, it’s anything but whimsical.

The metaphor is almost exact. If you know you will be buying a new house but haven’t yet sold your current Rehoboth Beach, DE home, which comes first?

As for the new purchase, the universally agreed upon best practice for house-hunting is to be able to produce a lender’s preapproval for X dollars.

So selling your Rehoboth Beach, DE home has to come first, right?

But if you need to have sold your home before you get serious about finding a new one—what if the tight market means it may take a while to find the right home at the price you’re looking for? Selling your current home usually means committing to moving out at a date that’s fast approaching!

So that means locking up the new home comes first, right?

The answer is to have faith that—unlike the chicken-egg riddle—generations of Rehoboth Beach, DE buyers and sellers have successfully solved the dilemma. It involves a number of working parts including the particulars of your current financial profile, a formulation of the post-sale net proceeds, and a properly constructed pre-approval letter that will be contingent on the successful closing.

Although you could put all those parts together yourself, that’s hardly necessary. It’s a piece of cake once you’ve enlisted the services of the Rehoboth Beach, DE professionals who deal with these issues all the time: a team including your knowledgeable Rehoboth Beach, DE Realtor® and an experienced local mortgage professional. Call me whenever you need to solve any similar Rehoboth Beach, DE real estate dilemma. I’ll be at your side to help protect something else: your nest egg! Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com

There’s news on the real estate value estimating front (robotic version).

For any kind of Delaware real estate activity—whether you are buying or selling; financing or refinancing; whether for your family residence or as an investment—there are at least two value estimation figures that determine how the Delaware transaction is likely to fare.

The first is a value estimate that you come up with: a dollar amount that reflects what the subject property is worth to you. That’s a calculation likely to be based on some mix of the property’s features, your own personal tastes, and your financial profile and outlook. If I’m your Realtor®, it will also be greatly influenced by the research I prepare for you: the real-world values of all the latest comparable transactions that have been taking place locally—along with the asking prices of similar properties.

That figure is one thing, but the second kind is an actual appraisal—the estimate that lenders use as the collateral value for the Delaware property. That estimate is the one a professional appraiser calculates using guidelines and formulas that have been painstakingly developed over time. It’s fortuitous when the first number comes close to the professional estimate—and I’m happy to say that it’s often the case.

But since 2006 there has been a third kind of Delaware real estate value estimate—one that’s increasingly mentioned in news of real estate controversies. This is the “Zestimate” offered by the website data company Zillow: a number that is arrived at via an automated system that assembles publicly available data. It’s stated purpose is “to aid potential buyers in assessing market value of a given property.” Unlike the painstaking reports that certified assessors create for a fee, Zestimates are widely disseminated to everyone for free. There is one problem, which I’ve mentioned before: the figures may be misleading.

Although Zillow claims an “incredibly low” national median error rate of 5%, last June they hailed a new improved algorithm that dropped the rate to 6.1%” [that’s not a typo: 6.1% is indeed a larger error rate than the still-claimed 5%]. Worse yet, research shows that in 10% of the cases examined, the error was 20% plus or minus…so a home with an actual fair market value of $300,000 could show a Zestimate of anywhere from $240,000 to $360,000!

Given that possibility, it’s probably no wonder that Zillow has announced a $1 million prize “to the person or team who can most improve the Zestimate” formula. MarketWatch points out that the contest was announced “just a week after a class action suit was filed against them” for offering unlicensed appraisals that hurt business—but the company claims the timing is just a coincidence.

Delaware real estate buyers and sellers will undoubtedly continue to be amused by those Zestimates when they see them, but the more knowledgeable keep in mind that they can constitute eye-rolling mistakes. When your own Delaware real world real estate affairs are in the offing, better to give me a call for information that won’t include any misleading automated miscalculations. Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com

For those who may have been wondering how the final GOP Tax Bill could affect possible real estate investment plans and tax liability next year, the changes can be significant.

I know, I know. As soon as you saw “tax liability,” your eyes glossed over and your finger got ready to swipe right. But before you skip the following, I promise to keep it short, relevant, and potentially beneficial for investors and potential investors here in Rehoboth Beach, DE :

SIGNIFICANT fact #1:

You can now take 100% depreciation upfront for assets with useful lives of less than 20 years. For example, if you buy personal property (like carpet, new appliances, tools, equipment) or if you make land improvements (like landscaping, driveways, parking) you can probably immediately write off the entire cost of these assets. Under previous rules, the allowed depreciation was 50% in the year of purchase.

However, as www.BiggerPockets.com points out, “It is important to note that this is bonus depreciation. That means that when you sell the assets, you will pay depreciation recapture tax. Keep that in mind.”

SIGNIFICANT fact #2:

A new “freebie” deduction has been granted to sole proprietors, LLCs, and S corps generating qualified business income. According to www.Nolo.com, “Landlords are among the biggest winners under the new law. Virtually all landlords will save money--many, to quote our President, will save ‘bigly.’ Enjoy it while you can.

So basically, if your rental activity qualifies as a business for tax purposes (as most do, according to Nolo), you may be eligible to deduct an amount equal to 20% of your net rental income. This would be in addition to all your other rental or real estate investment-related deductions. If you qualify for this deduction, you’ll effectively be taxed on only 80% of your rental income. Thus, the effective rate for taxpayers in the top 37% tax bracket is 29.5%.

Not bad!

Now, as a licensed Rehoboth Beach, DE  real estate agent, my E&O insurance (and common sense!) dictate that I remind you that I am not a tax professional and do not dispense tax advice. All tax matters should be directed to your accountant – especially in light of all the recent tax code changes. However, my investor clients here in Rehoboth Beach, DE —as well as anyone considering purchasing their first real estate investment—would be well served by consulting their tax advisor regarding possible moves they might make in the second half of 2018. The results next April 15th could be significant. And as always, for any real estate purchase, investment or rental considerations – give me a call anytime! Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com

 When the goals motivating the parties in a negotiation—including Delaware real estate negotiations—are understood by all concerned, the odds for success are greatly improved. In most cases where the negotiation is between a buyer and seller of Delaware real estate, the goals are straightforward enough that it doesn’t seem to require much attention. Yet with a negotiation as weighty as the buying and selling of a home, stripping down the motivations common to the various parties can be a clarifying exercise. Here is what you might call a negotiation matrix:

When a buyer puts together an offer, more often than not their mental decision-making process goes something like this:

—    — — — — — — — — BUYER — — — — — — — —

  I do not want to lose this house | want to pay as little as possible

—    — — — — — — — — —— — — — — — — — — — —

The reason for the colliding arrows is that the two goals run the risk of conflicting with one another. If the buyer’s offer is too low, another buyer could come in to swoop up the property, and: game over. If the offer is higher than would turn out to be acceptable to the seller, the second goal will have been needlessly sacrificed.  

At the same time and on the other side, the seller is usually thinking:

—    — — — — — — — — —— — — — — — — — — — —

I want to complete the sale | want to bank the full asking price (or higher!)

—    — — — — — — — — — SELLER— — — — — — — — — — —

It’s quite similar to the buyer’s mental process. Both are calculations of the risk vs. reward that making an offer and responding to an offer entails.

When a buyer makes a lowball offer, it signals to the seller that the “don’t want to lose this house” side is probably losing out to the “pay the least” side of the buyer’s calculation. If the seller is leaning toward the “complete the sale” side of his or her own calculation, the offer will either be accepted or countered with a significant discount. If the current inclination is more toward the “full price” side, the counter may contain just a minor discount.

This negotiation matrix is the barest of bare-bones reductions. In practice, it’s often a little more complicated. Offers often contain details about desired maintenance corrections or may be dependent upon outside factors (like selling their current home); counter-offers, likewise.

Where a possible negotiation can needlessly go off the rails is if either party becomes emotionally threatened by an offer or counter. And believe me, it can happen! What’s vitally important is that each side understands that the other’s goals are legitimate, even though at odds with their own. A lowball offer may be misguided, but it’s not evil. A refusal to counter at all is, likewise, a statement of a legitimate bargaining position. Either may be disappointing, but neither is necessarily evidence of bad faith.

It’s my job to help my buying and selling clients chart a course through the negotiation rapids while avoiding such emotional cross-currents. At best, they are a needless distraction; at worst, obstacles that can prevent a meeting of minds. Appreciating the legitimacy of everybody’s motivations before the actual numbers start to fly is a good way to prepare. And, as usual, calling me is another prudent idea! Call/Text me Russell Stucki at (302) 228-7871, email me at This email address is being protected from spambots. You need JavaScript enabled to view it., visit more listings at www.beachrealestatemarket.com