While the steps involved in selling a home are similar no matter where you live, Pennsylvania’s state and local real estate laws and practices are unique in some respects. Becoming familiar with these early on will help you avoid problems later. Here’s an overview of the basics—from working with a real estate agent to making legally required disclosures to buyers to ultimately closing the deal.
Working With a Real Estate Agent
Most people selling their home in Pennsylvania work with a licensed real estate broker or agent. A good real estate agent will help price your house, based on a comparative market analysis, assessing the current values of similar homes in your area; effectively market your house to prospective buyers; and handle other tasks, such as reviewing property purchase documents and negotiating with buyers to close the deal.
Before signing a listing agreement (discussed below) with any agent, get references from other home sellers and check customer reviews on sites such as Zillow and Realtor.com. Doublecheck licenses using the Pennsylvania Secretary of State’s Licensee Info Search.
Signing a Property Listing Agreement in Pennsylvania
Once you find a real estate agent you want to work with, you’ll sign a “listing agreement,” giving the agent the right to market and handle the sale of your property. Most real estate agents use standard forms created by their state or local Realtor association, such as the Pennsylvania Association of Realtors.
Your listing agreement is likely to cover the following terms:
- Amount of the commission that you (the seller) will pay the agent. This typically ranges from 5-6% of the house sales price and is traditionally split between your real estate agent and the buyer’s agent. (Although recent lawsuits and court settlements have raised the prospect that this basic model might be changed, it still remains largely intact.)
- The type of listing. Most listing agents will want home sellers to sign an exclusive right to sell listing, which obligates you to pay a commission to the agent regardless of who brings in the buyer. Other arrangements are possible, however, such as an open listing, in which you agree to pay a commission to whichever agent brings in a buyer, or an exclusive agency listing, in which you agree that your agent is the only agent authorized to sell your house, but that you will pay a commission only if the agent brings in the buyer (not, for example, if you find that person yourself).
- Duration of listing. In all cases, the listing agreement will cover a set amount of time, such as 90 days.
- Listing price. Your listing agent will recommend an appropriate selling price by comparing prices of similar homes (“comps”) that have been listed in your immediate area, based on professional knowledge of the local market as well as data found in a Multiple Listing Service (MLS). To educate yourself as to whether the agent is recommending an appropriate price, the National Association of Realtors’ website offers information on prices of houses currently on the market, and websites such as Zillow provide data on actual sales prices on nearby properties.
- Items included or not included in the sale. For example, you might plan to leave behind a built-in dishwasher (which is therefore part of the property that the agent is contracted to sell), but exclude a refrigerator that you plan to move to your new home.
- Duties and obligations of home seller and real estate agent. Your agreement will spell out how the real estate agent will list or market your house, what type of insurance you must maintain on the property, and what disclosures you must make to prospective buyers.
Making Real Estate Disclosures in Pennsylvania
State law in Pennsylvania (68 Pennsylvania Statutes § 7304) requires that home sellers provide buyers a filled-out disclosure form. This describes material defects and other issues concerning the property, for example:
- its contents, such as specific appliances, and whether or not they need repair or replacement
- the availability of working smoke detectors
- defects in the electrical, plumbing, and other property systems
- presence of hazardous substances
- legal issues that would affect the homeowner's enjoyment of the property
- any homeowners’ association fees, deed restrictions, and
- other specified details of the home, such as the type of sewage system.
The language these disclosures must take is also set forth in Pennsylvania law, at 49 Pa. Code § 35.335a. This language reminds the parties that a "material defect" is defined as "a problem with the property ... that would have a significant adverse impact on [its] value or that involves an unreasonable risk to people on the land." Your real estate agent can provide you with a form containing the legally required language.
In addition, if your house was built before 1978, you must comply with federal Title X disclosure requirements regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website for details.
Responding to Offers, Counteroffers, and Purchase Agreements
A prospective buyer who wants to purchase a Pennsylvania home will make the seller a written offer, specifying the price, proposed down payment, any contingencies to closing such as receipt of a satisfactory inspection report by an inspector the buyer hires, and more. Other common contingencies include the buyers’ arranging financing or selling their current house.
You may reject an offer outright, accept it as-is, or (more typically) respond to a buyer’s offer with a counteroffer. A counteroffer accepts some or most of the offer terms, but suggests changes to others, such by asking as a higher price or a closing date that’s sooner than the buyer proposed.
A legally binding real estate contract is formed when you accept and sign a buyer's offer (agreeing to any changes from the original offer). Your agreement will contain key terms of the sale, such as the agreed-upon price, contingencies, financing terms, dispute resolution, and closing date.
Once a purchase agreement is signed by both buyer and seller, the transaction will go into escrow, described next.
Entering Real Estate Escrow in Pennsylvania
Escrow is the time period between signing the purchase agreement and closing on the house. You and the buyer will agree on an escrow or title agent: a neutral party that will serve as intermediary and supervise the process (preparing title reports, processing loans, removing buyer contingencies, and so on).
The buyer typically has a lot more to do during this time period than the seller. By the close of escrow, the buyer will need to finalize financing, remove all contingencies, have the house appraised (typically required by mortgage lenders), and get title insurance—usually under deadlines set by the purchase contract.
Issues often come up that require negotiating, such as who will pay for repair needs identified in an inspection report. The buyer might insist that you either pay to remedy a defect or agree to lower the purchase price by an appropriate amount. If you cannot agree, the buyer might have the right to back out of the deal without forfeiting the earnest money deposit.
Attending the Closing of Your Pennsylvania Home
By the close of escrow (known as the closing or settlement), you and the homebuyer should have fulfilled all the terms of your purchase agreement. At the closing itself (sometimes a meeting of the parties, other times conducted in separate locations and/or virtually), all final documents and funds will be exchanged between buyer and seller.
The buyer pays you the purchase price, and you give the buyer a deed and other transfer documents and clear title to the house or condo. You pay off any outstanding loans on your property and pay commissions to the real estate agents (per your listing agreement).
The closing normally takes place over the course of one day, though it’s possible for it to go over several days.
Sellers do not usually need to be present at a Pennsylvania closing so long as all costs are paid and documents are signed. Typically, the buyers will sign the final documents at the office of their title company or escrow agent and pick up the keys. Then the buyers will record the new deed in their name at a local government office, and the home is officially theirs.
For more on this process, see Escrow and Closing in Buying or Selling a Home.
Working With a Pennsylvania Lawyer
Unlike some states, Pennsylvania does not require that sellers involve a lawyer in the house-selling transaction. Even if it’s not required, you might decide to engage a lawyer at some point in the process—for example, to review the final contract or to assist with closing details. Or, you might want a lawyer’s help in unusual circumstances, such as if you are drafting a lease agreement allowing you to rent the home back for an extended period of time after the closing, or if problems show up on the title report such as a lien on your property.
And if selling a home without a real estate agent (“for sale by owner” or FSBO), it can be useful to hire an attorney to help with the legal paperwork.
More Information on Selling a House
The Residential Real Estate section of this website includes a variety of useful articles on all aspects of the house selling process, including marketing strategies and tax issues.