how to buy a home

So the saying goes that buying a home is the most expensive purchase that most people make in

their lifetime yet at times the process seems muddled with confusion and anxiety. This homebuyer

guide is intended to offer prospective homebuyers a clear synopsis of the home buying process in

Philadelphia.

Condo or Townhome?

Deciding what type of property you'd like to purchase is the very first step. The type of property

may very well dictate the location, especially in major cities like Philadelphia where single family

home prices can jump up quickly and the costs associated with ownership and maintenance also

increase. The major differences between condos and townhomes in Philadelphia is control, as in

who has the final say with respect to decision making. With condos, an elected board of

neighboring owners makes decisions while with townhomes the individual owner has final say.

Another dramatic difference is maintenance. Condos are typically low maintenance as the unit

owner is only responsible for repairs in his or her unit and the condo association is responsible for

repairs to the exterior and common elements. Townhome owners are responsible for all of their

own maintenance and the costs associated with it. Balancing location, control and maintenance

responsibilities is the first step in deciding which home is the perfect one for you.

Offers

Once you have found the perfect property the next step is to submit an offer. The buyer's real

estate agent will draw up the offer and every offer will contain contingencies or "outs" for things

like inspections, financing, appraisals, condo documents, and home sales to protect the buyer in

case the buyer changes his or her mind. Purchase contracts and the associated documents are

quite lengthy so the buyer should be prepared to review and sign/initial approximately 50 pages

worth of documents. Once the buyer signs the offer it is submitted with documents evidencing the

buyer's financial ability to consummate the purchase. If the offer is accepted and signed by the

Sellers, the wheels are officially in motion and the contingency time clocks are ticking.

Contingencies

It's important to note that once there is a fully signed contract, there are certain conditions under

which you may call off the deal and get your deposit back but simply changing your mind is not

one of them. The most common of which are 1) home inspection contingencies – including

property inspections, radon, termite, mold/mildew, and lead based paint 2) financing contingency

3) appraisal contingency 4)home sale or settlement contingency and 5) tenant occupied

contingencies.

Termination and Refund

If the buyer in within his or her contingency period and decides to terminate they are usually

entitled to do so and will be refunded all of the good faith deposit money paid to date. To

terminate the buyer must complete a termination document and sign a request to release the

good faith deposit. In order to get the money released the seller must agree and sign the same

termination and release documents. If there is a dispute the good faith deposit money could be

tied up until 1) both parties agree 2) a court issues a final order or 3) 365 days passes and then

the money is released to the buyer.

Mortgages

The best way to go about obtaining a mortgage is to contact a mortgage broker. They will be able

to give you the best options available from several lenders, not just one. Next the broker will help

you choose which loan suits you best from the almost countless options available: conventional

loans, FHA loans, commercial loans, VA loans, adjustable rate mortgages, home equity loans,

home equity lines of credit, bridge loans and lot loans. How much you have to put down and what

you plan to do with the property ultimately will dictate which loan makes the most sense.

Title Insurance

Title insurance is in an insurance policy just like any other insurance policy only this one protects

the buyer, and lender, against claims in the title to real estate. Title insurance is not required but if

you purchase a home with a loan your lender will require you obtain title insurance to protect the

lender's interest in the property. In PA title fees are set by the state and based on the purchase

price of the home so there should be no variation between companies.

Do I Need A Lawyer?

In Pennsylvania using an attorney to purchase real estate is not required and it's also not very

common. I always advise clients that they are free to pay an attorney if they so choose but that

they should be clear with both the attorney and the real estate agent as to who is performing

which tasks. Being clear about task assignment up front prevent both parties from stepping on the

other parties' toes and makes the transaction go as smoothly as possible.

In Conclusion

I've wanted to write the CenterCityTeam's Philadelphia Condo , Townhome, Rowhome, and Co-

op Buyer Guide for quite some time and I finally found some free time to put my thoughts on

paper. What preceded this conclusion is my advice on the home buying process and the issues

that surround it. The purchase of a condo, townhome, row home, or co-op in Philadelphia can be

confusing, scary, time consuming and exhilarating all at once but getting informed and finding

reputable professionals to help along the way will protect your interests and ensure the process is

as stress free as possible.

Top insights on the best way to buy a home in Philadelphia. Top Philadelphia real estate

company breaks down the differences and what you need to know before making the buying

decision.