Requirements for Buying a Home in Pennsylvania
Buying a home in Pennsylvania is a way to build equity. Whether you work with a real estate agent or on your own to purchase a home in the suburbs, rural Pennsylvania or a major city like Philadelphia, there are statewide requirements you must fulfill before you take the keys to your new home.
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Agreement of Sale
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Work with your attorney or real estate agent to complete an agreement of sale after you and the seller agree to the home sale. The date you agree to purchase the home, the costs of the home, household appliances the seller agrees to leave in the home and agreements on who will cover the costs of damages made to the home before you move in are types of information covered in the agreement. Typically, both you and the seller will have your lawyer or real estate agent review the document.
Home Mortgage and Inspection
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Your real estate agent or attorney can help you secure a mortgage or you can contact your local bank or another financial institution to secure a mortgage on your own. Of course, if you prefer, you can also pay for your new home using cash. Prior to securing a mortgage, get the home inspected by a licensed home inspector. You can find a list of home inspectors through organizations like the Pennsylvania Home Inspectors Coalition or The American Society of Home Inspectors, Inc. Should damages or repair needs be discovered at the home during the inspection, indicate whether you or the seller will pay for the repairs in the agreement of sale. According to the real estate seller disclosure law, the seller must inform you of any damages, including water leaks, termite damage or heating issues, to the home.
Taxes
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Before you take ownership of a home in Pennsylvania, you and/or the seller must generally complete a statement of value for the home and pay state and municipal tax on the home. Both taxes equal 1 percent of the property value. In many instances, you and the seller of the home will split the cost of the taxes. The realty transfer tax statement of value is filed with the recorder of deeds in the county where you purchase the home. A copy of the statement of value is sent by the recorder of deeds to the Pennsylvania Department of Revenue. You need this form to file a new deed for the home.
Deed
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Contact a real estate agent, your attorney or a title insurance company to change the name on the deed from the seller’s name to your name. Your first and last name, address of the home you’re buying and the year you purchased the home are required on the deed. You can also include your spouse’s name on the deed.
Title
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Ask your attorney or a title insurance company officer to review the title to the home. Titles are checked to see if there are existing liens on the home and to ensure that the title is changed to transfer ownership of the home to you. Some title insurance companies may require you to purchase title insurance before they authorize the title. According to the Pennsylvania Land Title Association, title insurance protects you from events that may have happened in the past, not from events that are likely to occur in the future. Unpaid taxes, boundary disputes, forgery and fraud are types of events title insurance protect you against. During the home closing, you and the seller will sign required documents like the title, realty transfer tax statement of value and the agreement of sale.
Insurance
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Although Pennsylvania doesn’t require you to purchase homeowners insurance, doing so can protect your family in the event of a flood, theft, fire or other natural disaster. The company you get your mortgage through might also require you to get property insurance, which covers damages to the actual home or your personal belongings, and casualty insurance, which covers the costs of bodily injuries caused on your property, before it approves your loan.
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