What catches Delaware sellers out
The things people find out late here. None of this is a ruling on your sale, and every one of them ends with somebody who can actually answer it for you.
Out-of-state sellers get withholding applied by default
Delaware applies a withholding on the gain when the seller is not a Delaware resident, and it can be applied automatically if the residency certification is not in the recitals. There are exemption paths, including for a principal residence. They generally have to be claimed rather than granted.
- The rule behind it
- Del. Code tit. 30, § 1126; Form 5403
- Who can answer it
- Your Delaware closing attorney, before the deed is drafted.
Attorneys run Delaware closings, which can leave you in the dark
Delaware requires an attorney at closing, and the file sits with them. That is generally a good thing for the paperwork, and it does mean a seller can find it hard to see where things stand. Asking for a status update is normal and worth doing regularly.
- The rule behind it
- Delaware unauthorized practice of law rules
- Who can answer it
- Your closing attorney. Ask what is outstanding and who it is waiting on.
How Delaware generally runs a sale
The broad shape of a sale there, as the research found it. Counties and cities add their own rules on top of all of this.
Closing model — mandatory attorney*In re Mid-Atlantic Settlement Services, Inc.*, UPL No. 95-15, approved 755 A.2d 389 (Del. 2000), held that conducting real estate settlements and disbursing funds is the practice of law;
Property regimeCommon-law (not community property). Tenancy by the entirety recognized (25 Del. C. § 309); both spouses must sign to convey entireties property.
DeedsSpecial warranty is most common; general warranty also used (25 Del. C. §§ 121–125).
Disclosure regime — statutory condition disclosureBuyer Property Protection Act, 6 Del. C. § 2570 et seq. Seller must disclose all known material defects in writing (§ 2572) on the DREC-approved Seller's Disclosure of Real Property Conditio...
Transfer tax — highest in the nationUp to 4% (30 Del. C. § 5401 et seq.). Per the Delaware Association of REALTORS®, Delaware charges "a 4% realty transfer tax — the highest state-level transfer tax in the country." The base i...
Non-resident withholdingDelaware collects estimated income tax on a non-resident seller's gain at closing via Form 5403: 8.7% for C corporations, 6.6% for all other non-resident transferors, of the gain (30 Del.
RONPermanent RON enacted via HB 145 (2021), effective Sept. 30, 2021, codified at 29 Del. C. § 4327. Verify current implementation and any operational limits.
Recording act & officeRace-notice (25 Del. C. § 153). Deeds record with the county Recorder of Deeds in New Castle, Kent, or Sussex.
Notable overlaysCoastal Zone Act (7 Del. C. § 7001 et seq.); Sussex coastal construction-control lines; DNREC brownfields/voluntary cleanup; beach-town rules.
Before you rely on any of this
This is a compilation of published state requirements, not legal advice, and no lawyer has reviewed it or your sale. Laws and forms change, counties and cities add their own rules, and whether any of this applies to you depends on facts we don't know. Treat every item as a starting point for a question, not as an answer. Confirm anything you plan to rely on against the official source we link, and run your list past a title company or an attorney licensed in your state.
These counts describe a typical sale, not yours. Which documents you need turns on facts about your home, your title, your buyer, and your county, and one unusual answer can add several or remove them.
Who prepares each document is what usually happens, not a rule. Practice differs between states, between counties, and between one title company and the next, and your contract can move work from one side to the other.
Keighbor is not a real estate brokerage and does not represent you. Nobody here is your agent. We don't negotiate, set your price, recommend a course of action, or take a commission. We provide software that helps you organize your side of the sale.
The full Delaware reference
The rest of the research, with every citation kept. This is the same material our own product is built on, and nothing is held back for paying customers. It describes the law as the research found it, not as it applies to your sale.
ALWAYS-required documents
Seller's Disclosure of Real Property Condition Report — 6 Del. C. § 2572 (duty), § 2578 (form). [SELLER]. APPEARS: Pre-listing / seller's disclosure packet.
Contents: all material defects known at the time the property is offered for sale or before final settlement. Timing: the disclosure "shall be made in writing before the seller signs the listing agreement" (§ 2572(b)) and must be given to all prospective buyers before an offer; the signed report becomes part of the Agreement of Sale, and must be updated for material changes before settlement. Consequences: non-delivery/omission exposes the seller to damages and buyer rescission.
Recent change: the current DREC condition report was approved July 1, 2023.
Official source: https://dprfiles.delaware.gov/realestate/ (DREC forms — free).
Deed (special or general warranty) — 25 Del. C. §§ 121–125. [ATTORNEY]; [NOTARY]. APPEARS: Recorded with the county after closing. Acknowledged before a notary.
Form 5402 — Realty Transfer Tax Return and Affidavit of Gain and Value — 30 Del. C. § 5402. [ATTORNEY]/[TITLE/ESCROW]. APPEARS: Filed with a government agency post-closing (presented at recording). Must be completed for all conveyances and presented at recording. Official source: https://revenuefiles.delaware.gov/.
SOMETIMES-required documents (triggered)
Trigger — common-interest community (DUCIOA, created on/after Sept. 30, 2009):
- Resale certificate — 25 Del. C. § 81-409. [HOA/MGMT CO]; [SELLER] requests/pays. APPEARS: In the HOA resale package. The unit owner furnishes the certificate (declaration, bylaws, rules, financial status) to the buyer. The association must supply the information within 10 days of the owner's request; the buyer may cancel within five calendar days of first receiving the certificate. Fee cap $200, plus up to $50 for a paper copy; no fee if the association misses the 10-day window. Communities predating Sept. 30, 2009, fall under the Unit Property Act (25 Del. C. Ch. 22).
Trigger — non-resident/out-of-state entity seller:
- Form 5403 — Real Estate Tax Return / Declaration of Estimated Income Tax — 30 Del. C. § 1126. [SELLER]/[ATTORNEY]. APPEARS: Filed with a government agency post-closing. 8.7% (C corp) / 6.6% (others) of the gain, paid at recording. Principal-residence, 1031, and foreclosure exemptions.
Trigger — existing residential dwelling:
- Radon information — 6 Del. C. § 2572A; the condition report must include any radon test/inspection results the seller possesses.
Trigger — new construction (first sale):
- Fire-sprinkler and street-repaving disclosures — § 2578(b) (see § 7).
Prescribed-language items (substance-over-form)
- New-construction fire-sprinkler statement (§ 2578(b)): "An automatic fire sprinkler system or other fire suppression systems may be available. For further information, visit www.statefiremarshall.delaware.gov."
- Street-repaving cost checkbox (§ 2578): "The cost of repairing and repaving the streets adjacent to the property is paid for by (check one): ___ the property owner(s), estimated fees: $___ / ___ Delaware Department of Transportation or the State of Delaware."
- Radon notice content (§ 2572A): buyer must be notified the property "may present the potential for exposure to radon," with disclosure of any test results.
Standard forms embed these via the DREC-approved PDF; a FSBO uses the identical free DREC form at dprfiles.delaware.gov.
Local / municipal overlays
Not exhaustive — notable examples include: Wilmington city realty transfer tax add-on and rental-license notices; municipal/county transfer tax where the locality has enacted the full 1.5% (raising the total to 4%); beach-town practices in Rehoboth Beach, Dewey Beach, Bethany Beach, and Lewes; Sussex County coastal zone and construction-control lines. Verify current municipal rates before quoting.
Post-closing obligations
- Recording with the Recorder of Deeds (race-notice; 25 Del. C. § 153).
- Form 5402 realty transfer tax and, for non-residents, Form 5403 estimated income tax filed at/around recording.
- 1099-S; federal capital gains; mortgage release.
Federal overlays (cross-reference)
See 01-methodology-v2.md § 8 for the full federal overlay set: Title X lead-based paint (pre-1978); FIRPTA (26 U.S.C. § 1445); 1099-S (26 U.S.C. § 6045(e)); wire-fraud advisory; Fair Housing Act (42 U.S.C. § 3601); RESPA/TRID.
FinCEN Residential Real Estate Rule (31 CFR 1031.320) — currently suspended. The Rule was effective March 1, 2026, but the U.S. District Court for the Eastern District of Texas vacated it nationwide on March 19, 2026 in Flowers Title Companies, LLC v. Bessent. FinCEN filed an appeal to the Fifth Circuit on May 11, 2026. A conflicting Middle District of Florida decision, Fidelity National Financial, Inc. v. Bessent, No. 3:25-cv-554-WWB-SJH (M.D. Fla.) (Feb. 19–20, 2026), upheld the Rule. Net effect for Delaware settlement attorneys: no filing obligation pending the Fifth Circuit appeal. Recheck currency before quoting.