Buying a home is an exciting and significant decision, and understanding the process is essential to ensure a smooth and successful house purchase.
Whether you're a first-time homebuyer or looking to relocate, this comprehensive guide will walk you through the rational approach to buying a house in Pittsburgh, empowering you with the knowledge needed to find and buy your dream house.
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Let's dive in!
Save for Your Home's Down Payment
When planning to buy a property in Pittsburgh, your first step should be to save every penny you can if you don't already have any savings set aside for a down payment, which is an upfront cash commitment for buying a home.
There isn't a set, standard amount or percentage for a down payment. It can range from 3% to 20% of the price of a property, depending on the mortgage provider you select.
In April 2023, Zillow reported that the average Pittsburgh home value was $224,478. On that price, for example, a 3% down payment equals $6734.
Note, if you pay less than 20% down payment, you'll be obligated to take out private mortgage insurance until you have at least 20% equity in your home.
Research the Pittsburgh Real Estate Market
Once you have money saved for buying a home in Pittsburgh, you can begin familiarizing yourself with the city's real estate market before diving into the home-buying process.
For example, Pittsburgh has several real estate seasons, and choosing the best time to buy a house in the city can save you a surprisingly large amount of money.
Pittsburgh also has close to 100 neighborhoods, each offering unique features and amenities.
It will be easier to pick the Pittsburgh neighborhood where you can buy a home that best suits your lifestyle if you take time to learn more about the areas that align with your preferences, considering factors such as safety, schools, transportation, cost of living, neighborhood home prices, and proximity to amenities.
Get a Mortgage Pre-approval
You'll need to take out a mortgage to pay for your Pittsburgh house purchase unless you have enough savings to pay for it fully in cash, which honestly few people can afford to do.
It's smart to get pre-approved by your bank or a reputable mortgage lender, as this will give you a solid budget to work with when searching for a Pittsburgh home to buy.
To get pre-approved for a mortgage, you'll need to provide your lender with some information, including your income, assets, debts, and credit history, which they'll use to calculate your debt-to-income ratio (DTI), credit score and determine how much house you can afford.
Your DTI is the percentage of your monthly income that goes towards debt payments. A DTI under 36% is preferred by most lenders.
Your credit score is a number that lenders use to assess your creditworthiness. The higher it is, the better terms you qualify for, including a lower mortgage interest rate. If you're applying for a conventional home loan, most lenders like to see a credit score of at least 620, which they classify as "fair".
A lender will also take into account the down payment you plan to make. The more money you put down, the less you'll have to borrow.
You'll get a letter from your lender promising a house loan for a specific amount if your pre-approval for a mortgage is successful. When you submit an offer to purchase a home, including this letter will be quite beneficial as it will demonstrate to the home seller that you are a serious buyer.
Partner With a Knowledgeable Real Estate Agent
When purchasing a property in Pittsburgh, you don't have to hire a real estate agent.
You can use the internet to identify homes for sale in the price range and neighborhood of your choice and then get in touch with the owner to see if you can strike a deal.
However, the process of purchasing a house can be made simpler and more time and cost-effective by working with a reliable real estate agent.
An expert agent, for instance, can explain Pittsburgh real estate market trends and the complexities of a home purchase to you, offer insightful information about neighborhoods, give you access to a wider selection of listings that suit your needs and budget, set up viewings at your convenience, negotiate on your behalf to get you the best deal, and do much more to ensure your home buying process is stress-free.
If you're concerned about the cost of working with a real estate agent, you shouldn't be.
The commission paid to your real estate agent is typically covered by the home seller. The way this works is their listing agent and your agent receive a percentage of the home sale price, typically 5-6%, which they split between them.
Search for the Perfect Home
It's time to start your house hunt now that you've determined how much you can afford to spend on a home, have a good grasp of the different Pittsburgh neighborhoods, and have engaged the assistance of a knowledgeable Pittsburgh real estate agent.
Finding a home you adore could take a few days to months, depending on the health of the Pittsburgh housing market at the moment and the type of home you want.
We encourage you not to rush the house-hunting process or settle for any house when you can't find what you're interested in quickly because purchasing a home is a major decision that will greatly impact your quality of life.
Take your time, see as many homes as you can, and evaluate each one while keeping in mind your preferences, including the number of bedrooms, square footage, and desired facilities.
Getting a sense of the home's neighborhood is also crucial. Go on a stroll around the block and see if you like the area.
Make an Offer and Negotiate
Pittsburgh has a competitive property market, so when you locate a home you love, be ready to submit an offer immediately.
Your real estate agent can help you put together a competitive offer based on factors such as the current situation of the housing market, recent comparable house sales, the home's condition, and the asking price. Always remember that the asking price is only a starting point, and you're free to make a lower offer, particularly if the house needs some renovation.
The home seller has three options once you submit your offer: they can accept, reject, or present a counteroffer. You should also be prepared to negotiate with the home seller in case they make a counteroffer.
Be willing to make concessions during talks on things like price, closing costs, house repairs, and when you can move into the property. Once more, having a knowledgeable real estate agent by your side will significantly increase your chances of securing the greatest bargain.
Perform Due Diligence
When you and a home seller reach an agreement on an offer, you'll sign a purchase agreement and put a down payment on the house as proof of your commitment to the deal.
A purchase agreement is a legally binding agreement that outlines the terms and conditions of the home sale, including the purchase price, financing details, who is responsible for paying closing costs like title fees, and contingencies.
To protect themselves, most home buyers often include the following home sale contingencies in their contract:
Home Inspection Contingency. This allows you to hire a licensed home inspector to perform a full assessment of the house's condition, including its structural, electrical, and plumbing systems and any wear and tear that may not be obvious to the naked eye.
You can walk away from the home sale or renegotiate the price down to cover the necessary repairs if the home inspection uncovers major problems the seller didn't disclose to you before you signed the purchase agreement.
A qualified appraiser will evaluate the property's state and use recent property sales in the home's neighborhood to calculate its true value. You can't get a mortgage from your lender that is higher than the home's appraised value.
So, if you and the home seller agreed on a price and the appraisal shows that the price is high, the appraisal contingency, which often states that you won't pay anything over the appraised value, or the appraised worth plus a specified amount, gives you the option to back out of the agreement or renegotiate the home sale price.
This process can be handled by your real estate agent, and if the title is clear, we advise that you buy title insurance to safeguard yourself from any future legal or undiscovered issues that may arise.
Close on the House
At this point, you're well on your way to becoming a Pittsburgh homeowner.
You'll likely be waiting for your mortgage provider to approve your loan and make the money needed to buy the house available.
Once the lender has approved your loan, you'll receive a closing disclosure, a five-page document that contains the final details regarding your mortgage, including the interest rate and repayment schedule. Make sure you fully understand all of your mortgage's terms and conditions.
To complete the home purchase, you'll, among other things, sign a small mountain of legal papers, transfer funds to the home seller, pay closing expenses, have the deed to the house formally transferred to your name, and get the keys to your new house.
Pittsburgh's average time to close a home sale is 35 days.
HomeBuyers of Pittsburgh: The #1 Professional Home Buyer
Are you looking to buy a house in Pittsburgh? Contact Homebuyers of Pittsburgh by calling 412-444-8914 or sending an email to info [at] urbanpgh.com.
We are a cash home-buying business in Pittsburgh with over ten years of experience buying and selling properties. As we've done for hundreds of individuals who have bought or sold a property in Pittsburgh, we would be delighted to offer you insight into the current trends in the Pittsburgh real estate market and successfully guide you through the house-buying process.
We also have many homes for sale at reasonable costs, one of which might be your ideal new residence. Please get in touch with us today, and we can begin the process of assisting you in finding a dream home for you and your family!