Pennsylvania Home Buying Process: Step-by-Step Guide

Buying a home is one of the biggest financial decisions you’ll ever make. Understanding the Pennsylvania home buying process can help you avoid surprises, meet important deadlines, and feel more confident from the day you get pre-approved until you receive the keys at closing.Unlike some states, Pennsylvania real estate agents typically prepare the Agreement of Sale and guide buyers through the transaction from start to finish.

Here’s what you can expect.

Step 1: Get Pre-Approved

Before looking at homes, meet with a lender and get pre-approved for a mortgage.

Getting pre-approved helps you:

• Know how much you can comfortably afford.
• Avoid looking at homes outside your budget.
• Prevent getting emotionally attached to a home you can’t purchase.
• Be ready to make an offer quickly.
• Show sellers you’re a serious buyer.

Some sellers even require buyers to provide a pre-approval letter before allowing a showing.

Step 2: Sign a Buyer Broker Representation Agreement

Before touring homes, you’ll need to sign a Buyer Broker Representation Agreement with your real estate agent. This is a required step before viewing homes. The agreement explains the services your agent will provide, how your agent is compensated, the length of the agreement, and each party’s responsibilities. Your agent will review the agreement with you, answer your questions, and explain each section before you sign.

Once the agreement is signed, your agent can begin scheduling showings and representing your best interests throughout the home buying process.

Step 3: Start Your Home Search

Once you’re pre-approved, your real estate agent will help you find homes that match your budget and wish list. Before scheduling a showing, I like to provide my clients with as much information as possible so they have a better understanding of the property before they even step inside. This often includes:

• The Seller’s Property Disclosure so you know about any known issues before visiting the property.
• Property tax information that I verify through the township.
• A property map.
• HOA website and contact information if the property is located in a homeowners association.

Having this information upfront helps buyers make informed decisions before scheduling a showing.

Step 4: Decide on an Offer

When you find the right home, I’ll prepare a Comparative Market Analysis (CMA) to help determine a fair offer based on similar homes that recently sold.

I’ll also explain:

• Earnest money deposit
• Financing contingency
• Inspection contingency
• HOA contingency
• Appraisal contingency
• Settlement date
• Other terms that may strengthen your offer

A mortgage pre-approval letter should be included with your offer. Some listing agents even contact your lender to verify your financing before presenting your offer to the seller.

Step 5: Review and Sign the Contract

In Pennsylvania, the Agreement of Sale is about 13 pages long. We’ll review each page together, and you’ll initial and sign where required. I’ll also explain any additional disclosures and documents that need to be signed before your offer is submitted.

The contract process varies by state:

• Pennsylvania: Real estate agents typically prepare the contract and any necessary addendums. Hiring an attorney is optional, and most buyers do not use one.
• New Jersey: Agents prepare the contract, but attorneys review it during the attorney review period before it becomes binding.
• New York: In most areas, the seller’s attorney prepares the contract and addendums while both attorneys negotiate the terms and work closely with the title company. In certain parts of New York, a real estate agent prepares the contract first, and then it is reviewed by an attorney.

Step 6: Wait for the Seller’s Response

The seller can:

• Accept your offer.
• Reject your offer.
• Make a counteroffer.

Strong offers, such as full-price offers, cash offers, or offers with fewer contingencies, are often accepted more quickly.

Step 7: You’re Under Contract

Congratulations! Once both parties sign the Agreement of Sale, you’re officially under contract. Throughout the transaction, your agent may ask you to sign addendums if changes need to be made to the contract, such as extending deadlines or updating terms that both parties have agreed upon.

Step 8: Schedule Your Inspections

If your contract includes an inspection contingency, schedule your inspection as soon as possible because inspection deadlines arrive quickly. After receiving the inspection report, you can contact contractors for repair estimates. You may decide to:

• Request repairs.
• Ask for a credit at closing.
• Negotiate the purchase price.
• Accept the property as-is.
• Terminate the contract if you and the seller cannot reach an agreement, provided you’re still within the inspection contingency period.

For some FHA, VA, and USDA loans, additional inspections may be required, such as a well water test, septic inspection, wood-destroying insect inspection, or lead-based paint evaluation for homes built before 1978.

If an agreement can’t be reached and you’re still within your inspection contingency period, you may have the option to terminate the contract.

Step 9: Complete Your Loan Application

Once your offer is accepted, immediately send the executed contract to your lender and complete any remaining loan requirements. Your lender will work toward issuing your mortgage commitment letter by the deadline stated in your contract.

Step 10: Contact the Title Company

Your title company should begin the title search right away to make sure there are no liens, unpaid taxes, or other issues affecting the property’s ownership. The title company and your lender will work together throughout the transaction to prepare for closing.

Step 11: The Appraisal

Your lender will order the appraisal within the timeframe required by your contract. I recommend buyers have an appraisal contingency whenever possible, especially if they’re buying near the top of their budget.

If the appraisal comes in lower than the purchase price, you may be able, with an appraisal contingency:

• Ask the seller to reduce the price.
• Split the difference with the seller.
• Pay the difference yourself.
• Terminate the contract if you and the seller cannot reach an agreement, provided you’re still within the appraisal contingency period.

Step 12: Underwriting

Once inspections and negotiations are complete, your loan enters underwriting. During this stage, the lender reviews your loan one final time while the lender and title company work together to prepare your closing. I stay in contact with both throughout the transaction and keep my buyers updated. I also encourage buyers to check in with their lender and title company weekly to help keep everything moving on schedule.

Step 13: Closing

About three business days before closing, your lender will provide your Closing Disclosure (CD), which outlines your loan terms and closing costs. If the Closing Disclosure isn’t provided in time, your closing may need to be rescheduled.

-The title company will prepare the settlement statement, showing the costs for both the buyer and seller, and confirm the closing date.

-In some cases, closing may occur before the date specified in the contract if both the buyer and seller agree and the lender and title company are ready. If additional time is needed, the closing date may be extended by mutual agreement of both parties.

-On closing day, you’ll sign the final paperwork, pay any remaining funds due, and once the transaction is recorded, you’ll receive the keys to your new home.

Step 14: Closing Day

Closing day is finally here! Before you officially become a homeowner, I recommend my clients complete a final walkthrough of the property to make sure everything is working properly and that the home is in the condition they expected.

In Pennsylvania, buyers are allowed up to two walkthroughs according to the Agreement of Sale. While many buyers only complete one walkthrough, I recommend doing one after any agreed-upon repairs have been completed and a final walkthrough on the day of closing.

The final walkthrough is not another inspection. It is an opportunity to make sure any negotiated repairs were completed, the property is still in the expected condition, and that no new issues have occurred since your last visit.

After the walkthrough, you will typically meet at the title company’s office, brokerage office, or attorney’s office (if you choose to hire an attorney) to review and sign the final closing documents. You will also pay any remaining closing costs or funds due at that time.

Once all documents have been signed, funds have been transferred, and the transaction has been officially recorded, you will receive the keys to your new home. Congratulations! You are officially a homeowner!

Read other posts here.