March 21, 2023

Title fraud

A growing issue in our market that owners and buyers should be aware of is title fraud (also called title/deed theft). It's not extremely common, but it does happen and can be devastating when it does.

The crime occurs when a fraudster steals your personal information and uses it to file a fraudulent/forged purchase agreement and deed, transferring your property into their name. They may then resell the property, rent it out, or take out financing against it.

Who's most at risk?

Owners that have non-owner occupied residences, such as long-vacant homes or vacation rentals, with low or no debt on the asset are the most likely victims of title fraud. When the owner isn't attending to a property and related mail, scam artists can steal their property months or years before they find out.

Once this happens, getting your property back if you're the owner or reclaiming your deposit/purchase funds if you're the buyer can be legally challenging and costly.

There are a few sensible things to do to protect yourself from title fraud as an owner or buyer. The first is purchasing an 'enhanced' title insurance policy that will guard you against loss in the event of an unauthorized transfer.

The next thing to do is request that the county recorder or register of deeds put an alert on your deed to notify you if a transfer is requested. Additionally, ensure mail is monitored, and keep an eye on your credit report for any unusual information, inquiries, or loans.

Finally, be wary when buying a house that's been vacant for an extended period and where the deal is too good to be true.

One more thing: Always work with a Realtor. We adhere to a code of ethics, have the experience to spot suspicious activity in a transaction, and will make sure your interests are fully protected. -Henry

March 13, 2023

Forced appreciation

As we observe what has been a shifting market here at the beach for the last few months, the outlook for buyers is starting to tilt in their favor. However, there are still pockets of high demand areas and our market has historically been less sensitive to interest rate volatility. Furthermore, real estate continues to be an excellent hedge against inflation.

I'd like to follow up on our previous article about appraisals by digging into 'forced appreciation.'

It's one of the tools investors use to boost the value of a property without waiting for the market and natural appreciation to increase appraised value.

The principal way this works for income-generating (i.e., rental properties — both commercial and residential) is by increasing the net operating income (NOI). NOI is one of the figures used to calculate the market value of a property according to the prevailing capitalization rate (investors' expected rate of return given risk).

How do we increase NOI? Here are a few popular and effective strategies leveraged by investors:

● Bring rent/lease rates up to market.
● Reduce management and operational expenses.
● Renovate/reposition to increase appeal and demand.
● Create additional cash flow streams (ancillary revenue).

Depending on the type of property and the investor's budget, some combination of these strategies will work to increase value under nearly any market conditions. These are particularly effective when the market is stagnating or in recession, and investors can't rely on economic growth to drive value. Such is the case currently with the Fed tamping down on inflation through monetary policy.

Fortunately, some of these strategies work well for non-rental properties as well, though value creation is based on comparable value rather than income. To render a valuation in this case, appraisers use the substitution method to compare the perceived and statistically extrapolated value of the individual and combined features/qualities of your home to similar on-market and recently sold properties in your community.

While income driving strategies do not apply here, making your home more energy efficient attracts potential buyers and promises lower ownership and operating costs. Additionally, all buyers appreciate properties in top condition with excellent curb appeal and amenities. You have the power to control the value of your home — much more so than other types of passive assets, such as securities.

Another approach to consider if you have a vacant property on your hands, such as a second or vacation home by the beach that you don't use often or at all, is to convert it to a vacation rental. Reach out to us to receive a rental analysis to determine if your property has greater value potential as a short-term rental, long-term (conventional) rental, or a non-income generating property.

As always, I'm here to help you devise the best strategy based on your objectives and preferences. -Henry Jaffe

Feb. 28, 2023

Going off-market

I'd like to cast some light on the pros and cons of selling and buying off-market properties (i.e., homes not on the MLS — aka 'pocket listings'). It's been a hot topic as we're facilitating more off-market deals, particularly for sellers.

As rates rise and values stagnate, there's increasing opportunity for sellers, home buyers, and real estate investors to achieve their objectives through an off-market transaction.

So, why would you want to sell or buy off-market?

Let's take a brief look at both sides:

Selling off-market


• Privacy — no nosy neighbors or showings to strangers.
• Quick sale — potentially strong offering terms and pricing, including substantial cash, from buyers that want to avoid competition.
• Potential to sell direct to a principal and avoid the buy-side commission.
• Less prep required — sell 'as-is' and save time and money: avoid needing to make repairs, paint, modernize, stage, etc.
• If you're unsure it will sell quickly, you can start off-market to test demand and minimize the risk of a stale listing, i.e., high days on market (DOM) and consequently wary buyers.
• Opportunity to get a preview of what terms and concessions buyers are seeking.


• Smaller buyer pool and potentially lower price.
• You must be comfortable not knowing if you got the 'highest' possible value.


• Chart out your goals and motivations to ensure an off-market sale suits your situation and home.
• Work with a Realtor seasoned in off-market listings that has access to a pool of buyers with cash and knows how to handle this type of transaction.

Buying off-market


• Less competition for the property — opportunity to avoid a bidding war.


• Possibility of paying a premium to secure the property — make it worthwhile for the seller to keep it off the market.
• May have to accept the property as-is.


• Ensure you have a clear idea of your criteria (what you're looking for and need in a home or investment).
• Don't get caught up in a too-good-to-be-true opportunity — get it appraised and inspected.
• Work with an agent that is well-connected and has access to pocket listings.
• Be prepared to move quickly — have your financials and pre-approval/qualification ready, and bring as much cash as you're able.

Not sure which approach is the right fit for your goals and property?

Sit down with me over coffee, lunch, or over the phone to look at your situation and discuss how an off-market strategy could fit. -Henry

Feb. 20, 2023

Sotheby's 2023 Luxury Outlook Report

For a detailed review of the luxury market, we are pleased to introduce the Sotheby's International Realty 2023 Luxury Outlook report, which outlines the industry trends and happenings across high-end residential markets around the world. In this report, we highlight the trends that you can expect in the year ahead, from the projected flow of global wealth into the real estate market to luxury real estate in the metaverse: Read The Report Link

Feb. 20, 2023

Taxes when selling

I’d like to bring to your attention an important tax form required for sellers of homes in Delaware who are not residents of the state.

Though this isn’t an exciting topic, it’s relevant as many of our sellers live out of state and are non-residents that own beach houses as second homes or rental investments.

The form we’re talking about is Form 5403, and to keep it light, I’ll just give you the high-level facts and considerations you need to know:

• You need to file Form 5403 if you are not a resident of Delaware and are selling a non-primary residence.

• The form allows you to report gains on the sale of your investment property and pay taxes due.

• You’re essentially making an estimated tax payment at closing rather than deferring payment until the end of the year.

• While it’s mandatory, it saves you the hassle of paying a big lump sum at tax time.

• The form must be filed by the closing date. A penalty will be assessed if you don’t file Form 5304 and pay the associated tax.

• The form also applies if you own the property as an LLC or corporation.

• Your attorney will submit the tax payment after deducting the amount due from the proceeds.

• The tax rate on gains is 6.6% for individuals/spouses and 8.7% for corporations.

Note that Form 5403 doesn’t apply if you’re a resident of Delaware, if your entity isn’t subject to tax here, if it’s your primary residence, or if the property is in foreclosure. Consult your attorney or tax specialist for help in these instances.

Should you fill out the form yourself?

If you follow the instructions and have all the needed information and documentation, you could certainly figure it out; however, it’s least risky and most convenient to entrust this task to a professional.

It can be challenging to calculate the tax basis, and errors will result in costly penalties. Therefore, it’s prudent to retain a Delaware Certified Public Accountant or Delaware Tax Attorney.

Reach out to me for additional resources or referrals to qualified tax professionals.

Contact me anytime with questions.


Posted in Business News
Jan. 4, 2023

Q4 2022 Market Update

Q4 2022 Market Update

Posted in Market Updates
Oct. 3, 2022

More exposure?

The housing market, like the weather, is cooling. However, regardless of the rising interest rate environment and uncertainty in the financial markets, we continue to see strength in our real estate market. Several of our recent listings sold over list price within days. Contact me directly for an updated market analysis.

At times like these, a successful home sale requires that we pull out all the stops and leverage the highest-performance marketing tools available.

Video is essential among these resources. We've discovered this in our experience producing high-quality videos for our clients. Accordingly, this month, I'd like to share a few of our team's insights.

2021 research by the National Association of Realtors corroborates our observations. The study shows that an average of 41% of home buyers incorporate video in their home searches and buying decisions, with the highest usage in mature age groups.

Video helps buyers experience your home remotely, conveniently, and safely. Additionally, a streaming visual helps create a narrative in the buyers' minds as they envision relaxing and living in the home.

Likewise, video conveys a tremendous amount of information about the quality and potential of a property as well as the lifestyle a beach home can offer. That knowledge and transparency facilitate the buyer's decision-making process and establishes trust and rapport.

An advantage to buyers and sellers, video opens the property to out-of-market buyers as well. On your part as a seller, video reduces the demand on you to accommodate numerous viewings. If it's a fit for the prospect, it will build excitement; if not, you'll automatically filter out non-ideal buyers.

You'll get more leads than just providing photos, and video enhances traction on social media and web platforms driven by algorithms that significantly favor video.

Going through the process of getting ready to film puts your home in the most pristine and marketable condition. We advise you on how to prepare and present your home and determine the optimal time of day and weather to shoot for the best lighting and 'Pop.'

To ramp up for your video, keep your home as clutter-free as possible, enabling prospective buyers to see the lines and feel the openness of the space. If you have the time and budget, quick cosmetic repairs will enhance curb appeal and make a solid first impression.

Our video production team has an abundance of experience, high-end equipment, and editing expertise to communicate that appeal and draw in qualified and motivated buyers.

To put your video in front of the most eyes, we harness organic and paid marketing, including:

● Social: Facebook, LinkedIn, and Instagram.
● Web: Sotheby’s website features, MLS, YouTube, Lux home blogs, and more.
● Email: We share directly with our qualified buyer lists.

Here are two videos we recently produced to give you an idea of how we showcase properties and attract excited buyer prospects:

Sycamore Video Link (Under contract within days after multiple offers and sold $75k over list.)
Hampton Video Link (Under contract within days after multiple offers and sold $505k over list.)

Contact us for assistance with producing a video that puts your home's best foot forward.

July 27, 2022

Market Stats - Mid-Year 2022

May 20, 2022

Building new?

Choosing to build a new home has its perks, including fewer maintenance issues, better personalization, and overall peace of mind with the right contractor.

The caveat is in finding the right builder. And with building permits for new home construction topping records, finding the ideal builder can be a challenge.

Below is an overview of what to consider when building new, including the compromise between customization, convenience, and cost (budget).

Recent Stats

Last year, Delaware’s 27% increase in new home building permits ranked first in the nation. Moreover, hundreds of different builders are working to meet this demand. With so many options to choose from, how do you decide?

The 3Cs of Building a New Home

There is a tradeoff between customization, convenience, and cost when building a home.

Customization refers to how personalized your home is. Convenience relates to how much effort you put into the project and the time it takes. And Cost… describes how much (or little) money you spend, i.e., budget.

If convenience is important to you, that typically comes at a cost as you hire the most experienced designers and builders to take care of everything in a reasonable time frame.

Selecting Process

In the 3Cs framework, selecting the right builder comes down to the right mix of personalization, quality, ease of the process, and budget.

One way to approach the selection process is to consult Realtors, mortgage lenders, and other community stakeholders who’ve done work with various builders and are familiar with their results.

Contact us directly for a full review of local builders and the latest new construction communities to consider.

Red Flags

Reputable builders typically require an upfront deposit. But if they want an unreasonably large amount, you should be wary. Circumstances will differ, but deposits generally range from five to ten percent.

A builder without a portfolio of existing clients is also concerning. Having no references isn’t inherently wrong — we all start somewhere — but dig deeper if they cannot supply a list of previous projects and clients.

Additional red flags include:

• Uses high-pressure sales tactics
• Provides unreasonably low quotes
• Doesn’t provide a comprehensive contract


Fully understanding these items with a builder is vital:

• Exposure to increases in construction costs and negotiate price increase caps if needed.
• Fees associated with handling changes or upgrades during the building process.
• Warranty program.
• Project management and supervision support.
• Level of finishes included in base pricing.

Negotiating Terms & Costs

A knowledgeable representative can assist with negotiating competitive pricing, extended builder warranty coverage, pre-drywall home inspections, guidance in resolving issues, reviewing builder track records, exploring creative new construction financing options and providing design guidance to help you make selections that will lead to a more advantageous resale.

Having representation during the new construction process offers several benefits in protecting your interests, verses working with the builder’s sales team to finalize terms.

It’s a significant financial commitment and an experienced new construction Realtor can advocate and stand up for you throughout the entire transaction.

As a team with abundant experience in the new home building and construction process, we’re here to help. Call me any time to review your options.

Click Here to review the latest new construction homes in Bethany Beach and see our active resale listings below.

Henry Jaffe

Posted in Business News
April 19, 2022

Market Stats - First Quarter 2022

Posted in Market Updates