Taxes: PA is a flat rate tax of 3.07% (as of 2013); the sales tax is 6% on necessities. The real estate taxes are divided unevenly between the municipality, county and school, with school taxes being the largest. Philadelphia has a city wage tax. Most other municipalities have an earned income tax of 1% known to us as the Berkheimer Tax. Municipal tax info.
Pre-Qualify vs Pre-Approval: The latter is when you have made a formal application to a lending institution, wherein the lender has verified your assets, income, and credit reports. The only thing standing in the way is the appraisal, inspections, and approval of the property you choose. Most companies can do this within a week with full cooperation. This is a win-win for you the buyer. No one wants to be told the mortgage was declined after finding the perfect property. This also puts you ahead of all other buyers that have only a pre-qualification, (often not worth the paper it is printed on). Good realtors know this; it will save you time and money. If you have not yet heard from your preferred lender, let your counselor know immediately so you are prepared. If you have a direct bill benefit in your relocation package going outside, your preferred vendor must be reviewed with your relocation counselor; most outside lenders will not direct bill.
Agent/Realtor: The relocation agents assigned to you will act entirely as Buyer Agents. PA is a consumer notice state. You will be asked to approve this document, as well as a Buyer Agency Agreement, with an addendum for all corporate transferees. There are clear advantages to representation by a qualified realtor. They owe you care, obedience, accountability, loyalty, notice, and disclosure, and will negotiate for your best interests. The agents to which you have been assigned must meet specific competencies and further training and education to work with referred company business. Most of the time, when a connection does not work, it is a personality conflict. Should you have any questions or concerns regarding your connection, please call immediately. We support any requests for reassignments. Your customer service satisfaction is our priority.
House Hunting: You can begin your shopping online yourself. Today most real estate companies download the local MLS to their website, and our company is no different. Your realtor will also have access to the extremely small percentage of real estate brokers who do not subscribe to broker reciprocity, new construction, and the local for sale by owner market, that are not on their internet sites.
Buying A Home: Make an offer in writing, typically using a Pennsylvania Association of Realtors (PAR) standard Agreement of Sale, unless you are purchasing new construction or corporate inventory, where often the Sellers have their own agreements of sale. Attorney reviews are atypical, unless your move is corporately sponsored, because realtors are licensed to fill in the blanks of the PAR Agreements. (Note: this agreement is not typically used for new construction and many use attorneys for this type of purchase and other more complex transactions.)
Financial Verification: Expect the seller’s agent to request the completion of a Buyers Financial Information form (BFI), in addition to your financial pre-approval from a lender. It is only necessary to include income and assets necessary to fulfill the terms and conditions of the agreement you are presenting to the seller; this is customary in most counties.
Deposit: $500 to $1,000 with the initial offer, and up to a total of 5 % deposit to hold the property until settlement, is customary (negotiable). If settlement is to occur quickly (less than 30 days), certified funds are necessary. The agency for the seller typically holds the deposit monies. If the seller is a builder representing themselves, they do not necessarily have the same restrictions of non-commingling of deposit funds as real estate companies. You may want to see if you can insure your equitable interest.
Contingencies: Note all terms and conditions that must be satisfied before you proceed with the purchase. Inspections can often take longer than one would think; adjust your time frames accordingly. Plan to attend all inspections, or have someone other than your realtor attend for you. Buyer typically pays for anything and everything they want checked out. Problems from inspections are negotiated as designated in the terms and conditions of the agreement of sale.
Time Essential: Time is of the essence in PA contracts; hence everything needs to be done as promised, or the agreement is voidable. Clock starts the day after the date of execution by all parties to the due date. Note: an agreement is not considered valid until agreed, executed and delivered.
Fixtures & Personal Property: In PA, ranges, mailboxes, etc. are considered real property. Be sure to check paragraph 7 in detail. What is in a brochure or advertisement is irrelevant if it is not included in this paragraph or specified as such in the final agreement of sale.
Mortgage Approval: If you already have a pre-approval as recommended, this process can be completed in less than 15 days. Otherwise, expect up to 45 days. Most agreements call for a formal application within 10 days of an agreement. If you have a direct bill benefit in your relocation package going outside, your preferred vendor must be reviewed with your relocation counselor. Most outside lenders will not direct bill.
Abstract (Title) Companies: The fees charged by abstract companies are state regulated. Their job is to facilitate the transaction between the buyer, and the seller, including, but not limited to: verifying ownership, preparing the deeds, making the appropriate adjustments, and conducting the final settlement.
Move In/Move Out (use and occupancy inspections): Vary by municipality not by county.
Getting To Settlement: Your agent along with a designated person within the office called a conveyancer will be responsible for a smooth transaction at settlement. Employee-sponsored moves by a third party management company cannot be charged a fee for this service. The time and place of settlement is customarily set by the buyer. All utilities should be transferred effective the day of closing. If a transaction is not going to move forward, hopefully all parties will know within a short period of time (inspection period). Note: real estate companies are forbidden by law to return any deposit monies paid on account unless all parties agree to the disposition of monies.
Interesting Facts & Local Customs of Pennsylvania
Most homes have basements (very old homes (100+) often wet ones some with active springs)
Many homes in rural areas are serviced by private water and septic systems
Insurance is rated by persons and by property (a clue report should contain a history of claims)
Most counties have not had a formal reassessment for decades. Be wary of home shopping by tax assessments, square footage, or zip codes (except in the county of Philadelphia). There is a window of opportunity each year to appeal your house assessment to the local county. School Districts often play a high role in buyer preferences, except Philadelphia.
Attorney reviews are atypical, except for some corporate-sponsored transferees and complex transactions. When hiring an attorney, be sure to use one who specializes in real estate law.
Verbal Agreements are rarely effective and traditionally not accepted.
Time is of the essence in all real estate contracts. (Not so in the neighboring states of NY or NJ.)
Ranges and other built-in appliances are part of the transfer. Refrigerators, washers and dryers are personal property and not included unless specified in the agreement of sale.
Surveys are not a part of an agreement of sale and are rarely requested. If requested, they are typically paid for by the buyer.
A transfer of ownership does not necessitate a change in the real estate taxes in most counties.
The local public school systems are funded through a large portion of the real estate taxes.
A 2% state transfer tax applies to all real estate transactions. This fee is typically divided between the buyer and the seller and is often paid by the employer in most relocation benefit packages.