Guide to Buying a House in Delaware | 🏡 Tips, Resources, & Best Places to Buy a House in Delaware
With no sales taxes, beautiful beaches, and a prime location near major cities on the East Coast, living in Delaware is a dream come true. However, there are several important considerations you'll need to keep in mind before buying a house in Delaware. Where do you want to live, how much can you afford, and how will you find the perfect place to settle down? With so many decisions to make and beautiful Delaware houses available, it's easy to get overwhelmed.
Luckily, it gets easier if you simply break it down step by step. To help make your decision and life easier, here is a comprehensive guide to the best places to buy a house in Delaware, along with the steps you need to take to get there.
The Steps to Buying a House In Delaware
What are the steps to purchasing a home in Delaware? Regardless of where you're looking to move, buying a home can be a complicated process. You may be wondering what the steps are to purchasing a home in Delaware. Follow these steps when buying a house in Delaware.
Set Your Budget
First, you'll need to determine how much you can afford to spend on buying a house in Delaware. Homes in Delaware tend to be reasonably priced, and the cost of living is affordable. Although don't just consider the cost of the home. You'll also need to consider expenses such as property taxes, homeowners' insurance, maintenance, and, of course, your monthly mortgage payment.
It may be helpful to use a housing affordability calculator to determine what you can afford based on your current financial situation. Creating an accurate budget is an essential part of the home-buying process, as it ensures you can find a suitable place to live that allows you to maintain a comfortable lifestyle.
Before buying a house in Delaware, ensure you have sufficient savings. Most experts recommend having at least 6 months of savings to prepare for emergencies. You'll also want to be sure you don't have too much debt.
Most Delaware mortgage lenders like to see a debt-to-income ratio of 36% or lower, and housing costs shouldn't account for more than 28% of your income. The median household income in Delaware is $82,855. So in that example, your total housing costs should not exceed $23,199 when buying a house in Delaware.
How Much Does Buying a House in Delaware Cost?
It may also be helpful to take a closer look at the actual costs of buying a house in Delaware when you break down the numbers. First, it might help to break down the different expenses related to buying homes in Delaware.
Property taxes are a significant expense that Delaware homebuyers are responsible for paying. Luckily, Delaware has some of the lowest property taxes in the country.
Here is a breakdown of the effective property tax rates by county if you’re buying a house in Delaware:
- Sussex County: 0.35%
- Kent County: 0.47%
- New Castle County: 0.76%
So make sure to take that into consideration when evaluating the best places to live in Delaware. Next, you'll also want to think about homeowners' insurance. While it often varies depending on where you live, the average insurance cost of homes in Delaware is around $860, which is 55% lower than the national average. You'll also want to consider maintenance. Most recommend budgeting 1-4% of the purchase price per year for maintenance, or about $1 per square foot.
According to Redfin, the median home value in Delaware is $450,000, with an average price per square foot of $210. That would mean you'll want to budget for $4500 to $18,000 for yearly maintenance. So keep that in mind before buying a house in Delaware.
Buying a house in Delaware is also a smart move for real estate investors, thanks to its robust rental market. It's a great place to buy an investment property due to its steady rental demand, prime location, consistent population growth, and history of property appreciation. If you're looking for rental properties, you'll find a wide range of great options.
Research the Best Mortgage Lenders in Delaware and Get Pre-Approved
Once you've set a budget, the next step before buying a house in Delaware is to find a mortgage lender. Before you begin shopping seriously, you'll want to shop around for the best mortgage loans in Delaware and get pre-approved. You may want to check with banks, credit unions, online lenders, and other financial institutions to find the best interest rates.
Potential lenders will look at your financial documents when you’re buying a house in Delaware, including your pay stubs, W-2s, bank statements, investments, and any other relevant data, and offer you a rate based on your full financial picture. It's usually best to speak to at least 2-3 lenders before choosing one to lock in the best rate.
There are a few different Delaware home loans you may consider, depending on your financial situation and level of economic stability. Here are a few of the most common loans to consider when buying a house in Delaware.
- Conventional loans: Available to borrowers with good credit (680+) and income, require a 20% down payment to avoid private mortgage insurance when buying a house in Delaware.
- FHA loans: Insured by the Fair Housing Administration of the Federal Government, and feature flexible credit and income requirements (580+) with down payments as low as 3.5%.
- VA loans: Insured by the Veterans Administration and only available to eligible veterans, active duty service members, and some surviving spouses who are buying a house in Delaware. No minimum credit score requirements (although lenders typically look for a minimum of 620), and loans are available for 0% down.
- USDA loans: Insured by the US Department of Agriculture and only available to rural homeowners buying a house in Delaware. No credit requirements (although lenders typically look for a credit score of 640 or higher), with loans available for 0% down.
It also never hurts to look into first-time home buyer programs in Delaware to see if you qualify.
Buying a home can get expensive, and any help you can get can be a significant relief. Fortunately, you may be able to find a first-time homebuyer program through the Delaware State Housing Authority that can significantly reduce the cost of the process.
Here are a few of the most popular first-time home buyer Delaware programs:
- Welcome Home Program: Available to any Delaware first-time home buyer with a minimum credit score of 620 who meets the income requirements for their county. They have several programs available under the Welcome Home program, including:
- Smart Start: Unassisted first mortgage with no down payment or closing cost assistance when buying a house in Delaware.
- First State Home Loan: 3% of the home's purchase price for down payment & Delaware closing costs.
- Diamond In the Rough: 5% of the loan amount for down payment and closing costs for those who qualify for the FHA 203(k) program.
- Home Again: Available for first-time and repeat homebuyers buying a house in Delaware whose income exceeds the limits of the Welcome Home program. It offers the Smart Start and First State Home Loan options for borrowers with a 620 minimum credit score.
Find a Qualified Real Estate Agent
After you secure financing, the next step to buying a house in Delaware is to find a good real estate agent. Although not a requirement, real estate agents have a wealth of knowledge that can save you from making costly mistakes. They can advise you on the best places to buy a house in Delaware to ensure you find the perfect property in a strategic location.
They will help you negotiate, find the right listings within your price point, guide you through all the paperwork, and assist you at every stage of the property buying process, so you feel confident in your decisions. Many buyers also look at experienced brokerages such as Engel & Völkers Gulf Shores, where knowledgeable advisors provide personalized guidance and a high level of client service throughout the home buying journey. They will also have access to MLS data that can help you find better listings and craft a solid offer.
While the listings you view will also likely have an agent showing them, those agents represent the seller. Therefore, it's essential to have your own representation to advocate for your interests. However, it's also important to confirm they are experienced and qualified for the job.
Here are a few ways to confirm a real estate agent is experienced and qualified to advise you on buying a house in Delaware:
- Read reviews on popular sites like Zillow and Realtor.com
- Confirm they specialize in the local area and property type you're interested in
- Verify that they are properly licensed by the Delaware Real Estate Commission
- Look for any memberships in local or national organizations like the NAR.
- Inquire with local real estate agencies like Coldwell Banker or Keller Williams Realty.
- Ensure they are affiliated with a reputable brokerage or licensed to practice on their own
- Check to be up to date on E&O insurance and continuing education requirements.
Taking the time to verify the credentials and experience of any broker you wish to hire will ensure you find a qualified agent who will make buying a house in Delaware easy and stress-free.
Start Looking at Homes In Delaware
Next, you're ready to start house hunting. Before buying a house in Delaware, it's essential to be specific about what you're looking for. Create a list of the things you want and the things you need. For instance, you may want a swimming pool, but you also need at least three bedrooms or a home office. Figuring these things out before you start looking for homes can make it easier to narrow down your choices before making a final decision after reviewing Delaware real estate.
You'll also want to research the best places to buy a house in Delaware based on your needs and budget. There are plenty of great cities and neighborhoods throughout the First State that offer affordable homes and a high quality of life.
The Best Places to Buy a House In Delaware
Ultimately, where you end up buying a house in Delaware depends greatly on your needs and lifestyle. Here are a few popular areas you may consider.
- New Castle is a charming town renowned for its rich colonial history and affordable single-family homes, with a median home price of $324,000. It’s a great place to consider buying a house in Delaware.
- Rehoboth Beach is a charming beach town on the Atlantic Coast, offering beautiful coastal properties, shopping centers, sandy beaches, and a bustling boardwalk, making it one of the best places to retire in Delaware. Other coastal areas like Bethany Beach and Dewey Beach also offer great vacation homes.
- Middletown is a rapidly growing, friendly suburb known for its strong sense of community, outdoor recreation, and affordable homes with a median home price of $445,000.
Submit an Offer and Close On Your Delaware Home
You'll want to shop around a bit to find the home of your dreams. While there is no set rule for how many properties you should preview when buying a house in Delaware, most experts recommend at least 3 to 5, and most buyers tend to look at 8 -10 before making an offer.
Once you've found the perfect property, you'll work with your agent to craft and offer it to the seller. The seller will either accept it, reject it, or submit a counteroffer. You can go back and forth as many times as needed until you reach a price you both agree on (or you decide to walk away).
Once the buyer accepts your offer, you're in the home stretch. The next step in buying a house in Delaware is to complete due diligence. This is your chance to conduct an inspection of the property to confirm it's in good condition and there are no undisclosed issues. If you plan to finance the property, your lender will likely require an appraisal to ensure the home's value matches your offer.
You can renegotiate if the appraisal or inspection reveals any issues. However, if everything checks out, you'll conduct a final walk-through and prepare for the closing. At the closing, you'll go over the paperwork with your agent and sign any outstanding documents.
Delaware is an attorney-closing state, which means a licensed attorney is required to finalize the sale and will be part of the closing costs (closing costs in Delaware are typically 3-5% of the sale price, so make sure to budget accordingly).
Once all the paperwork has been signed, the closing agent will transfer the funds to the seller, and you're officially done buying a house in Delaware. The only thing left is to pick up the keys and move into your new home!
Thinking About Moving to Delaware After Buying a Home?
Now that you fully understand the process of buying a house in Delaware, you’re ready to plan your move. When the time comes, you can trust the dedicated Delaware movers at First-Rate Movers to make your moving day easy and efficient. Call (302) 448-2372 today for a free quote.
Request Your Free Quote
"*" indicates required fields