How Are Real Estate Properties Sold
Understanding the property sale process is essential whether you're buying or selling. This comprehensive guide walks through every stage of a typical residential real estate transaction in Pennsylvania.
The Complete Sales Process Timeline
Typical Timeline: 30-60 Days
From listing to closing, most Pennsylvania residential transactions complete within 4-8 weeks, though this varies based on financing, inspections, and negotiations.
Phase 1: Pre-Listing (Seller's Preparation)
1. Property Preparation
Sellers typically invest time and money to maximize appeal and value:
- Repairs and maintenance (fixing obvious defects)
- Cosmetic improvements (fresh paint, landscaping)
- Deep cleaning and decluttering
- Home staging to showcase the property's potential
2. Pricing Strategy
Critical step involving:
- Comparative Market Analysis (CMA) by real estate agent
- Review of recent comparable sales
- Assessment of current market conditions
- Strategic pricing to attract buyers while maximizing value
3. Hiring Professionals
Most sellers engage:
- Real Estate Agent: Markets property, handles negotiations (typical commission: 5-6% split between buyer and seller agents)
- Attorney: Required in Pennsylvania for preparing documents and handling closing
- Photographer: Professional photos crucial for online listings
Phase 2: Active Marketing Period
Listing Goes Live
Property is marketed through multiple channels:
- Multiple Listing Service (MLS) - accessible to all agents
- Online portals (Zillow, Realtor.com, Redfin)
- Agent's website and social media
- Virtual tours and video walkthroughs
- Open houses and private showings
Showing Protocol
Potential buyers schedule viewings through their agents. Sellers typically vacate during showings to allow buyers to envision themselves in the space. Smart lockboxes enable secure access.
Phase 3: Offer and Negotiation
The Purchase Offer
When interested, buyers submit a written offer including:
- Purchase Price: Amount offered for the property
- Earnest Money Deposit: Good faith deposit (typically 1-3% of price)
- Contingencies: Conditions that must be met (financing, inspection, appraisal)
- Closing Date: Proposed settlement date
- Inclusions/Exclusions: What stays or goes with the property
Negotiation Dance
Sellers have three options upon receiving an offer:
Accept
Agree to all terms as presented
Counter
Propose modified terms (price, closing date, etc.)
Reject
Decline the offer entirely
Multiple rounds of counter-offers are common until both parties reach agreement.
Phase 4: Under Contract (Due Diligence Period)
Once an offer is accepted, the property goes "under contract" and several critical steps occur:
1. Home Inspection (Days 7-14)
Buyer hires professional inspector to examine:
- Structural integrity and foundation
- Roof, HVAC, plumbing, electrical systems
- Signs of water damage, mold, or pest infestation
- Safety hazards and code violations
Findings may lead to renegotiation, repair requests, or buyer termination of contract if issues are severe.
2. Appraisal (Days 14-21)
Lender orders professional appraisal to confirm property value supports loan amount. If appraisal comes in below contract price, parties must renegotiate or buyer must bring additional cash.
3. Financing Process
Buyer's lender processes mortgage application:
- Income and employment verification
- Credit check and debt analysis
- Asset verification (down payment, closing costs)
- Property title search and insurance
- Final underwriting approval
4. Additional Inspections
Depending on property age and condition, additional specialized inspections may be needed: termite, radon, septic, well water, or structural engineering evaluations.
Phase 5: Final Preparation for Closing
Final Walk-Through
24-48 hours before closing, buyer conducts final property inspection to verify condition hasn't changed and agreed-upon repairs were completed.
Closing Disclosure Review
Both parties receive final closing documents at least 3 days before settlement, detailing all financial transactions and costs.
Phase 6: Settlement (Closing Day)
In Pennsylvania, closings typically occur at the title company or attorney's office. The process involves:
Document Signing
Buyer and seller sign numerous documents including deed, mortgage documents, closing statement, and transfer tax declarations.
Funds Transfer
Buyer provides remaining down payment and closing costs. Lender wires loan funds. Title company disburses payments to seller, agents, attorneys, and any lienholders.
Keys and Possession
After all documents are signed and funds cleared, seller provides keys and property possession transfers to buyer.
Pennsylvania-Specific Considerations
Attorney Involvement
Pennsylvania is an attorney state—legal representation is customary (though not required) for both buyers and sellers during closings.
Transfer Taxes
Pennsylvania imposes state (1%) and often local transfer taxes. In many areas, total transfer taxes reach 2-3% of sale price, typically split between buyer and seller.
Disclosure Requirements
Sellers must complete a Property Disclosure Statement revealing known material defects, with specific requirements varying by municipality.
Common Deal Obstacles
- Low Appraisal: Property doesn't appraise for contract price, requiring renegotiation
- Financing Denial: Buyer's mortgage application is rejected
- Major Inspection Issues: Significant defects discovered that parties can't agree how to resolve
- Title Problems: Issues with property ownership, liens, or encumbrances
- Buyer Remorse: Buyer attempts to back out without valid contractual reason
Role of the Appraisal in the Sale
The professional appraisal is a critical checkpoint in nearly every financed sale:
- Lenders require appraisals to ensure property value supports loan amount
- Appraisers are independent third parties, not advocates for buyer or seller
- Low appraisals can derail deals unless parties renegotiate price or buyer adds cash
- Appraisals provide objective market value validation, protecting all parties
- Fast turnaround appraisals (24-48 hours) help keep sales on track