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Michael R. McCann
"The Real Estate Man"
Associate Broker, CRS, GRI
530 Walnut Street, Suite 260
Philadelphia, Pennsylvania 19106
Ph: 215-627-6005 Fax: 215-627-8106
Voice Mail: 215-440-8345
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STEPS TO PURCHASING A HOME IN PHILADELPHIA
THE AGREEMENT OF SALE
Most negotiations are conducted in writing. When the agreement is prepared and signed, it is traditionally accompanied by a good faith deposit made out to the Listing Broker. If the offer is accepted, an additional deposit is required to bring the amount being held in escrow to 10% of the sale price. The amount being held by the Listing Broker, as required by law, shall be credited toward the purchase price and closing costs at the time of settlement. If the offer is rejected by the sellers, the initial good faith deposits returned to the buyers and the agreement is declared null and void.
All terms of an accepted agreement are binding, so be sure to detail all of your terms in writing prior to submitting an offer to the seller, or to the seller's agent.
Common items to be included in your offer are: mortgage contingencies; termite/wood infestation certifications; radon addendums; roof certifications and home inspection reports.
Closing costs will differ based on the parameters of the agreement. Costs are usually less than 10% of the contract sale price, plus the amount of your down payment (seller assistance for costs are optional ), and are needed the day of final settlement.
OBTAINING A MORTGAGE
Today's mortgage financing is as complex as it is varied, so contacting a lender even before you find a home to purchase is sometimes advised. I can assist you in finding the mortgage with the best terms and lowest rates for your individual needs.
Application for your mortgage must be made in writing within 10 days of the sellers acceptance of your agreement of sale. The application fee varies from lender to lender and includes your credit report and the appraisal of the property you wish to purchase.
Most lenders generally use an "income/debt" ratio to qualify most applicants. The numbers used will differ based upon the type of mortgage ( conventional, f.h.a. or v.a. ) and the amount of your down payment in relation to the value of the appraised property itself.
# 28 - 35 = lenders allow you to spend this percentage of your gross monthly income towards your principal, interest, taxes and insurance (P.I.T.I.).I will give you an estimated breakdown of your closing costs and your monthly payment before you sign an agreement of sale, so that you are aware of the amount that you need for settlement. At the time of settlement, a certified check for the amount due is required and made payable to the title company for the difference of your sale price plus your closing costs, minus your down payment and your mortgage amount .
# 36 - 42 = this is the percentage of your gross monthly income you cannot exceed when adding your current monthly debt ( credit cards, car payments, other loans) to your principal, interest, taxes and insurance payment of the mortgage you are applying for.
Settlement usually takes place within 60 - 90 days after the sellers acceptance of you offer, either in the office of the title company or the office of the Listing or Selling Broker.
Approximately one week prior to your settlement, you should contact the utility companies and inform them that you are making settlement on the designated day.
Buyer has the right to have a pre-settlement inspection within 72 hours of final closing Settlement, transfer of title, conveyance and closing are all terms used to describe the final step of your purchase. Generally, this hour long procedure is where the property rights are transferred to you as new owner when all the documentation ( deed, title & mortgage ) is signed .