Home Buying in Pennsylvania>Question Details

Ronnie, Home Buyer in Philadelphia, PA

What are the steps to take in purchasing a townhome for a 1st time buyer? From A-Z

Asked by Ronnie, Philadelphia, PA Thu Sep 20, 2007

I am 25 years old, single, and looking to purchase property so I won't have to keep paying rent and can build equity. But I am totally confused as to where and how to get started. Can someone please advise on what steps I should take? I'm looking to purchase a 2-level townhome in the suburban PA area. I was hoping to only have to pay association fees for things like maintenance, lawncare, etc. since I'm not married and living alone. Thanks!

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Joe gave a great answer that really tells the whole story. The only thing we should add is regarding selection of your representatives. With both mortgage and real estate agents, you will want to choose agents who are readily available when you have questions or concerns.( you WILL have both) Do not pick the mortgage company based solely on the interest rate. We have seen too many settlements go bad for the buyer because that great rate promised never materialized but extra fees did. Your real estate agent should be professional and insist on meeting you first before going out to look at houses. To look at houses before they know what you are really looking for would be a waste of everyones time (yours, theirs and the sellers).

If you are in the suburban Phila. area, feel free to give us a call or email and maybe we can be of service.
1 vote Thank Flag Link Wed Oct 24, 2007
Hi, Ronnie!

Good question - and a very wise decision to put the money into a home, rather than pay rent. You will likely find that there are a number of homes and condo communities in you rarea that fit the bill. One thing to keep in mind is that a one bedroom condo is often a more difficult resale (people just like the extra BR).

The other info is very solid, and I think I would charaterize the process this way:
1) get pre-aprroved for a mortgage (this is VERY important toi the process and helping you determine what you can afford and should be looking at). You also need to consider how much you will be using as a downpayment (at least 20% is recommended).

2) Begin researching homes on your own through all kinds of online sites (Realtor.com, etc) to determine what you like that is in your price range.

3) Research agents and intrview them - you are hiring them, and you want someone who is patient, a good listener, understands your needs and can offer the help and guidence you need. Ask friends, family, and neighbors who they used and if they liked them. (Your agent's commission is paid by the seller, so there is no point in not having one).

4) Once you find the home you like with your agent, have the agent research recent slae prices for similar homes in the areas (called "comps") and submit what you feel to be a fair bid based on the condition of the home and differences from the comp homes.

5) The seller will review your bid and either accept, counter offer, or reject it. You can then accept or counter offer their conter offer. Once you agree on a price, you both sign an agreement of sale - this is a contract that binds you both to the sale, pending an inspection.

6) Get a home inspeciton, and DO NOT waive any inspections (like termite, radon, etc). Reaserch and interview inspectors and hire the one that is the best for you. Your agent may recommend some, but it is always wise to research them online (with Angie's List or the BBB, or via a Google search for your area) to see what services are available and what different inspectors have to offer (You hire and pay the inspector). Get all the appropriate and needed tests and inspections (you will have to hire someone for each - many inspectors offer them all as "one stop shopping"), since this is your opportunity to negotiate with the seller to have items repaired, insects treated, and radon mitigated at Seller Expense. Typically in PA, you have 15 days to have all these tests and inspections performed and respond to the Seller with items you would like to have corrected or treated (this is where many agents REALLY earn their commission). Sometimes the seller will fix them, other times they will give you money back so you can have them done your way by your contractors. Expect to pay about $300 for a standard townhome inspection, $75 for a termite inspection, and $125 for radon testing (on average in PA).

7) You will need an appraisal. Typically, the lender hires the appraiser and you never see a copy although you wil be charged for it in closing costs.

8) Review the Good Faith Estimate from the lender to determine what your closing costs will be and start setting aside money for it if you have not already. (and bring the finds to closing the the form of a Certified Check - personal checks are no good at closing).

9) Sign the closing papers and move in!

There are some steps I glossed over and may have missed (this is a basic outline), but it should help get you started!!
1 vote Thank Flag Link Thu Oct 4, 2007
Ronnie,

-Get pre-approved not just pre-qualified, i.e. complete an application not just an online questionnaire asking for SSN and income. This step is your ticket to the real estate marketplace. More importantly, it sets expectations.
-Start shopping online.
-Secure the services of a Buyer's Agent. Hassle-free professional representation is what you need; don't do your cousin Annie a favor just because she got her license yesterday. Furthermore, this individual will advise and guide you through the entire process from showings to offer and from contract to settlement.

FYI: During the contract period, you will be provided an opportunity to review the association docs and determine how maintenance-free your situation will be. However, your Buyer's agent would be able to assist you in obtaining this info prior to submitting an offer. The most ideal situation might be to find a townhouse community characterized as a condo association as just about everything is maintained.

Hope this helps.
1 vote Thank Flag Link Thu Sep 20, 2007
If you are looking for a checklist on general steps to take.
I like the U.S. Department of Housing & Urban Development (H.U.D.) checklist for buyers. http://www.hud.gov/buying/index.cfm

Make sure you are aware of the Covenants and Restrictions in the communities you are interested in.

Congradulations on your decision to purchase v.s. renting and good luck to you!
0 votes Thank Flag Link Wed Sep 26, 2007
If you are looking in the local Harrisburg area then contact M&T Bank (low as 5.47% rate!) and Sun Trust Bank (awesome service history!) - they have some REALLY GREAT programs for first time buyers. Also you may want to get yourself an EXPERIENCED LENDER and an EXPERIENCED REALTOR (Buyers Agent) so they can assist with the details and process of buying a home...Hope this helps!
0 votes Thank Flag Link Wed Sep 26, 2007
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