BUYING A HOME IN PENNSYLVANIA

Buyer makes offer using PAR Agreement of Sale:

PA Association of Realtors in conjunction with the Lehigh Valley Association of

Realtors and should be completed with an Agent’s assistance.

The earnest money or good faith deposit that accompanies the offer is customarily

in the range of up to ten percent (10%) of the purchase price. The Buyer’s

personal check is made payable to the Listing Broker who must deposit the check

in a separate escrow account when the offer is accepted.

Any conditions regarding new financing or loan assumptions are written in the

Agreement of Sale. As a rule, a Buyer is given four to five weeks to obtain a firm

loan commitment. A Buyer has ten (10) banking days to apply for a mortgage

after signing of an Agreement by a Seller.

Unless otherwise provided, the following items shall be prorated and adjusted

between the parties or paid at closing:

(a) Taxes on real property shall be prorated on a fiscal year or calendar year

basis to the date of closing.

(b) Any remaining fuel or propane gas left with the property.

(c) Rents/security deposits, if any, for the property shall be prorated at

closing.

(d) Accrued, but unpaid, interest and other charges to Seller, if any, shall be

computed to the date of closing, and paid by the Seller. Interest and other

charges pre-paid by Seller shall be credited to the Seller at closing, and paid

by the Buyer. Other charges to the Buyer may include HA mortgage

insurance premiums, and private mortgage insurance premiums.

Seller agrees to convey title by Special Warranty Deed at closing. The average

time from execution of contract to closing varies, but is typically 60 days.

A Buyer has the option to have (at Buyer’s expense) a professional house

inspection to verify that there are no major defects in the structure, electrical,

plumbing, mechanical, roof, and the heating/cooling systems before the contract

becomes final. Other property inspection items may include Radon, Pool, Well

and Septic.

See Wood Destroying Insection Infestation Report contained in the Agreement of Sale.

Occasionally, the purchase of a new home is contingent upon the sale of the

Buyer’s present home, which is conditioned upon the acceptance by the Seller. In

this case, there is usually a time limit on the contract, and the Seller’s home is kept

on the market during this period. The Buyer is given 24 to 48 hours in which to

remove the contingency in the event of an acceptable offer from a new, qualified

Buyer.

With the Agreement of Sale, Buyers are asked to fill out a Financial Information Form.

The information is then reviewed by the Seller in order to determine the Buyer’s ability

to purchase the home.

The Buyer completes an application with the loan officer, supplying necessary

information such as past and present employment, credit history, assets and liabilities.

Accurate name, address, account numbers and balances are important for expedient

lender verification. The Buyer generally pays appraisal and credit report fees at time of

application.

Lender orders verification of all information supplied by borrower (Buyer), and a credit

report. Lender orders appraisal of subject property. When the loan package is complete,

the loan officer submits the package to the loan committee for review and approval.

Buyer should instruct the mortgage lending institution to provide his/her Realtor and the Seller’s

Realtor with a copy of the mortgage commitment document.

The closing agent performs a title examination, title insurance, mortgage insurance (if

necessary), prepares a new deed, closing statement, calculations, and preparation of necessary

Buyer arranges appropriate property homeowners insurance for coverage of real

estate and personal effects.

The Buyer exercises the right of pre-settlement inspection prior to closing.

The parties involved notify the utilities (gas, electric, water, etc.) to change billing

from Seller to Buyer, effective as of the date of closing or occupancy, if occupancy

precedes settlement.

Fuel oil proration at time of settlement, if applicable.

The closing settlement is usually held at the office of the lending institution, or the

Title Company, or attorney who will also conduct the settlement.

1. The closing Agent will review the closing statement with the Buyer and Seller

to itemize all receipts and expenditures including prorated adjustments.

2. The Buyer’s usual closing costs when a new loan has been obtained include

fees for loan origination, credit report, and appraisal (usually prepaid), title

insurance, documentation, recording, and transfer tax.

3. The closing Agent obtains necessary signatures on all documents, including the

deed.

4. The Buyer pays the balance due on the purchase price, and the closing expenses

with either a personal or certified check.

5. Seller receives proceeds for sale of property and conveys title by Special Warranty Deed to Buyer.

6. Pertinent documents are recorded in the public records at the courthouse by

the closing Agent.