Buying a Home in Greater Pittsburgh, PA
Finding and purchasing a home that will meet your needs is a significant and often stressful time. Our goal is to make this transition as smooth as possible. We are experts in the area, and once we learn what it is that you’re looking for, finding your dream home is simple.
Before you start looking for a home you should ask yourself a few questions:
- Where do you want to live? Are there particular neighborhoods or communities that you like?
- What kind of house would you like (need)? Are you looking for a particular style? How many bedrooms and bathrooms do you want?
- Is a home office a necessity? Do you need a bonus room or flex-room?
- Do you entertain often? Is a home suitable for entertaining something you’re looking for?
Searching for your dream home can be a time-consuming experience. Working with our professional real estate team will make the process much more efficient!
Here are some common things to do when you are thinking about buying a home.
- Determine your budget: Before starting your search, determine how much you can afford to spend on a house. Consider your monthly income, expenses, and savings.
- Get pre-approved for a mortgage: Getting pre-approved for a mortgage can help you determine how much you can borrow. That way when you are ready to start looking at homes and want to submit an offer, we will have the required pre approval ready to make an offer. We have some great recommendations for local mortgage brokers that can help.
- Consider the location: Consider the location of the property you’re interested in. Look at factors such as the neighborhood, proximity to schools, work, and amenities.
- List of Needs & Wants: Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes – things you would like to have (pool, den, etc.) but that are not absolutely necessary.
- Work with a real estate agent: A real estate agent can help you find properties that match your criteria and guide you through the home buying process. An agent will help you understand the local housing market to get an idea of the prices of homes in the areas you’re interested in. Our team can help you with all of these things.
What Are Closing Costs?
You’ve found your dream home, the seller has accepted your offer, your loan has been approved and you’re eager to move into your new home. But before you get the key, there’s one more step–the closing.
Also called the settlement, the closing is the process of passing ownership of property from seller to buyer. And it can be bewildering. As a buyer, you will sign what seems like endless piles of documents and will have to present a sizable check for the down payment and various closing costs. It’s the fees associated with the closing that many times remain a mystery to many buyers who may simply hand over thousands of dollars without really knowing what they are paying for.
As a responsible buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Although many of the fees may vary by locality, here are some common fees:
Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the beginning of your loan application process.
Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.
Loan Origination Fee: This fee covers the lender’s loan-processing costs. The fee is typically one percent of the total mortgage.
Loan Discount: You will pay this one-time charge if you have chosen to pay points to lower your interest rate. Each point you purchase equals one percent of the total loan.
Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.
Prepaid Interest Fee: This fee covers the interest payment from the date you purchased the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.
Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance. At least one year advance plus two months worth of homeowner’s insurance premium will be collected. In addition, taxes equal approximately to two months in excess of the number of months that have elapsed in the year are paid at closing. (If six months have passed, eight months of taxes will be collected.)
Recording Fees and transfer taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property.
Escrow: Now What?
If you are working with our team to buy a home, we will guide and assist you with everything. But if you are just starting to research what to expect, here is a list of common things that happen once you are in escrow.
You will be asked for a down payment on the home you are purchasing. You can choose to put down as much or as little as you want (depending on your mortgage), but remember, the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month. In the greater Pittsburgh area most offers include 1% of the sales price as a down payment.
The deposit check will be cashed. This money will be applied to the purchase price of the home.
During this period of purchasing your home, you are going to need a settlement company to act as an independent third party so that you know when and who to give your money to get the deed to your new home. The settlement company will coordinate much of the activity that goes on during the escrow period.
The period that you are “in escrow” is often 45 days, but may be longer or shorter. During this time, each item specified in the contract must be completed satisfactorily. By the time you have opened escrow, you have come to an agreement with the seller on the closing date and the contingencies. Each contract is different, but most include the following:
- Inspection contingency: this should be completed as soon as possible after the contract to purchase is signed as unsatisfactory results of the inspection may mean that you will want to cancel the contract.
- Financing contingency: Once the contract is signed, you have a period of time to secure funding. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan. You may choose to cancel the purchase contract.
- A requirement that the seller must provide a marketable title. With an attorney or title officer, review the title report. The title must be “clear” to ensure that you do not have legal issues regarding your ownership. Check into local and state ordinances regarding property transfer and make sure that you and/or the seller have complied with them.
- Secure homeowner’s insurance. This will probably be required before you can close the sale. Due to such requirements as special fire and earthquake insurance, obtaining this insurance may require a lengthy period of time. It would be in your best interest to apply for insurance as soon as possible after the contract is signed.
- Contact local utility companies to schedule to have service turned on when you close escrow.
- Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a “permanently attached” chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.
You’ve made it! Once the sale has closed, you’re the proud owner of a new home. Congratulations!