Buying a Home

• Introduction
• Applying For a Home Mortgage Loan
• Preparing For Your Closing

Introduction

When you go about buying a new home, which is often the largest investment you will ever make, you should have a professional involved who is only concerned with your interests. In most cases home buyers will work very closely with a real estate agent in deciding to purchase a home. A real estate agent is a professional and can be very helpful in completing the transaction. However, you should remember that a real estate agent is generally under contract with, and receives a commission from, the seller. He or she is paid only if and when you pay the seller for the property.

Our lawyers will represent only you in the transaction, and it is best if you get us involved sooner rather than later. Many times our real estate clients come to us after they have signed an agreement of sale. The agreement of sale is the contract which sets forth all of the terms and conditions of your purchase. Very often this is a pre-printed form that will be presented to you by the real estate agent. The agreement will specify the dates and amount of payment required, the settlement or closing date, the list of any household items or other personal property to be included in the sale, and the damages to be paid if the contract is breached.

Ideally, any documents requiring your signature should be reviewed by us before you sign them. That way we can help you avoid costly mistakes and unpleasant situations.

In addition to the purchase price for the home, you should be aware of other expenses involved in purchasing a home. These include:

1. Charges imposed by your mortgage lender, such as an application fee, an appraisal fee, and a percentage charge for the loan called "points" (1 point = one percent of the loan amount);
2. If your lender requires you to maintain an escrow account for real estate taxes, you will probably be required to pay into this escrow account at settlement a substantial portion of the yearly charge;
3. State and local transfer taxes, which are typically 2% of the purchase price (the buyer and seller typically split this, so that each pays 1%);
4. A pro-rated adjustment for property taxes and other items like sewer fees and homeowners association fees already paid by the seller;
5. Title insurance premium; and
6. Recording costs for the deed and mortgage.

One advantage to using Shagin Anstine LLC to represent you in your transaction is that there is no additional fee for our legal services if we are providing you with title insurance. See Title Insurance and Settlement Services.

After you have signed a contract for the purchase of your new home, we will help you prepare for settlement. Generally the first step will be for you to apply for a home mortgage, if you have not already done so (many home buyers get pre-qualified for a home mortgage before they enter into an agreement of sale).
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Applying For a Home Mortgage Loan

Applying for a home loan can be confusing. You are advised to shop around for the best terms. Look in the real estate section of your local Sunday newspaper for information about current interest rates and a list of lenders. We can advise you on this process. Once you have chosen a lender, a little preparation will make the application process easier for you. When applying for a home mortgage, plan to have the following available:

1. Original, signed purchase agreement
2. Name, address and zip code for employers for the last two full years
3. Three most recent pay stubs
4. Addresses of residences for the last two full years, including the address of any landlord
5. Name, address and account numbers for checking accounts, savings accounts and other cash assets
6. Name, address and account numbers for all outstanding loans and credit cards
7. Value of personal property, including life insurance
8. Social security numbers and work telephone numbers
9. For self-employed persons, copies of complete tax returns for prior two years plus a current profit and loss statement and personal balance sheet.
10. Cash or check for appraisal and credit reports
11. Verification of child support and alimony obligations
12. The name of your lawyer and settlement agentöShagin Anstine LLC

If you are refinancing an existing mortgage, the lender will want to see a copy of your deed and mortgage, as well as your most recent bills for county, school and municipal taxes.

In addition, for new construction, you will need to have a complete set of plans and specifications, a construction contract and land contract.
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Preparing For Your Closing

In Pennsylvania the terms "closing" and "settlement" are both used to refer to the final step in a home purchase/sale, when money changes hands and a deed is delivered. The process of preparing for closing begins when the buyer and the seller sign a purchase agreement or sales contract. This contract will specify the date by which a closing will be held, and specifies the conditions that must be satisfied before a closing can be held.

Once a mortgage commitment has been obtained and the title examined and found to be satisfactory, a closing can be scheduled. Usually the settlement is held in the office of the real estate broker involved, or in our offices at 100 Pine Street, Harrisburg. As the buyer, you should be prepared to bring the following items to settlement:

1. A copy of the purchase contract.
2. A certified check for the closing funds you will need. This figure will be provided to you by us the day before closing.
3. Original homeowners insurance binder and paid receipt.

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