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Pennsylvania Home Buying Process

This guide is intended to familiarize you with our local customs and costs of purchasing a home in Pennsylvania. Expect variations in any transaction, but use this as a general guide. You will have many more questions, and we are here to answer them. Contact Duffy Real Estate to get started today!

Step 1: The Agreement of Sale

Pennsylvania Home Buying Process

Most negotiations are conducted in writing. The agreement is prepared by the agent with whom you are working and accompanied by a deposit to be delivered to the listing broker. After the written agreement is presented, further negotiations are usually conducted verbally. When terms are agreed upon, the contracts are changed, all parties sign, and the deposit check is placed in an escrow account held by the listing broker.

Within 10 days of the approval of the agreement of sale, 5-10% of the sales price is paid as a good faith deposit. This deposit will be placed in the escrow account held by the listing broker.

All terms in any agreement are negotiable between buyer and seller. Make certain you detail all of your terms. Common items to be included are—mortgage contingencies, termite/wood destroying insect inspections, radon inspections, and structural or mechanical inspections.

Step 2: Obtaining a Mortgage

Today's mortgage financing is as complex as it is varied, so contacting a mortgage lender before you start house hunting is advisable. You must make a completed mortgage application to a responsible lending institution within the time specified by the agreement.

Most mortgage companies and banks use the 28-36 rule in qualifying buyers for a conventional mortgage. Banks generally allow you to spend 28% of your GROSS monthly income for principal, interest, taxes, and insurance. If you have other debts (usually over six months in duration, such as car payments, student loans, credit card payments, your mortgage on your present home, etc.), your mortgage amount PLUS your debts must not exceed 36% of your GROSS monthly income.

Pennsylvania Home Buying Process

FHA and VA have different ratios. If you have been in active military service at any time longer than 181 days, you may be eligible for Veterans Administration (VA) Financing. If so, when you come here to look for a home, please bring your (DD) Honorable Discharge Certificate and/or Certificate of VA Eligibility.

Step 3: Settlement

The terms settlement, transfer of title, and conveyance are used interchangeably with the term closing. The average time interval from execution of the agreement of sale by both parties to settlement is 45-90 days. Closing costs will vary depending on taxes, mortgage points, and insurance costs. Your Duffy Real Estate agent will detail your estimated costs before you present your offer.