Buying A House in PA: Everything You Need to Know
Pennsylvania, PA is a state filled with history and character, making it a great place to live and work.
Referred to as the “Keystone State”, buying a home in Pennsylvania comes with a lot of advantages. But while you’re bound to be excited, don’t get so caught up in the thrill of home ownership that you forget to do your groundwork before you put your signature on the dotted line.
The housing market in Pennsylvania is considered somewhat competitive. That said, everything from the local economy to your financials will impact what home you buy and how much it costs.
In this guide, we cover how to buy a house in PA, including why we consider it a good idea.
Why Consider Buying A House in PA
For one, Pennsylvania boasts a low cost of living and income tax when compared with states like its neighboring New York City. In fact, rent (or monthly mortgage payments) is about 50% less and real estate about 70% lower overall, which is great for anyone who is considering buying a house in Pennsylvania.
On top of having a relatively low cost of living, many entrepreneurs thrive in this state due to the current collaborative business culture. For families, the great schooling system is a big plus, too. Pennsylvania has a great public school system, with an array of award-winning schools across many school districts.
How to Buy a House in PA
1. Evaluate Your Financials
You don’t want to find your dream home, only to realize later on that you can’t afford it. Understanding your finances means considering:
- Looking at your credit score: To access a mortgage most lenders require you to have a credit score of 620 or higher.
- Your debt-to-income ratio: A ratio of less than 36% of your income going towards debt is recommended. This includes your future mortgage payments.
- The down payment: Even though you plan to take a mortgage, keep in mind that an out-of-pocket down payment of at least 20% on the house is typically required upfront.
- Home ownership costs: Buying a house is not the end of home ownership. There are maintenance costs, insurance fees, and other miscellaneous payments to consider.
2. Find A Real Estate Agent
Finding a good real estate agent to help you with buying a home in PA is extremely beneficial. A good real estate agent is one who knows the community and market well, can compare house prices and find you the best house within your budget and needs.
They should also be willing to connect you to home inspectors and mortgage brokers, draft your offer and handle all necessary paperwork after helping with the negotiations.
One way to decide on a good agent is to ask around for good references and reviews from past clients. You should also choose one you have a good rapport with.
3. Choose An Area
Where you live in Pennsylvania should be determined by your priorities. What do you require of your area? Setting out your criteria before you begin your search will not only make things easier, it will ensure you don’t compromise on what’s important only to end up regretting your decision later. Do you have children and are looking for a good school district? Do you need to be close to the city? Already decided on Philly and need to find the best suburbs nearby? These questions are important to ask yourself before you share what you want with your realtor.
4. Get A Mortgage Pre-Approval
Getting pre-approved for your mortgage should be done before you look for houses. Now that you have an understanding of your finances, you can approach your lender with your budget, credit score, and other documentation such as your income and assets. Pre-approval happens when your lender verifies this information.
5. Make An Offer
After looking around and finding the house you think could be your next home, it’s time to make an offer to the seller. Discuss the Seller’s Disclosure with your agent first to make sure you have not missed any hidden costs. In Pennsylvania, homes sell the fastest around May, so be cognizant of demand in this stage when buying a house in PA. Submit the offer to the listing agent and negotiate it with the help of your agent. Signatures from everyone means you have an executed contract.
6. Do A Home Inspection
Due diligence is important in making sure the home you’re buying is what you signed up for. After you identify a house you like and agree on an offer, hire a licensed inspector to do a thorough check on the condition of the property. Bigger issues such as foundations or termites can mean you can withdraw your offer, while issues that can be repaired easily allow you to go back to the negotiating table.
7. Closing Costs
When you’re looking to buy a house in Pennsylvania, it’s important to keep closing costs top of mind. Typically, they include actions such as title searches, document recording, appraisals, insurance applications, and so on. Expect a Pennsylvania state deed transfer tax, and the state of Pennsylvania charges 1% of the sales price. They can run up to 5% of the mortgage amount, so buyers should remember to leave room for them in their budget.
If you are thinking of buying a home in Pennsylvania, Main Line Homes is here to help. Call us at (610) 642-3744, and we’ll make sure you find the best home for your needs.
Janis Peterson, REALTOR®, GRI, ABR, SRES, CSP
Main Line Homes Luxury Real Estate Agent