Buying a house in Philadelphia
Philadelphia, known as the City of Brotherly Love, is steeped in history and is Pennsylvania’s largest city. After a surge in home prices nationwide due to the pandemic, the real estate market in Philadelphia is gradually returning to normal. As of March 2023, home prices have decreased by 3.8 percent year-over-year, with a median home price of around $255,000, significantly lower than the national median of $375,700.
Deciding Where to Live in Philadelphia
Philadelphia offers a diverse range of neighborhoods, catering to various preferences. Whether you seek a peaceful enclave or a lively neighborhood with a rich cultural scene, options abound. For budget-conscious buyers, the up-and-coming Grays Ferry community is a popular choice. Meanwhile, Fishtown appeals to those looking for vibrant gastronomy, art, and music scenes. Other esteemed neighborhoods include Passyunk Square, Northern Liberties, Queen Village, and the upscale Society Hill, each offering its own unique advantages and considerations.
Factors such as housing availability, proximity to workplaces and schools, and closeness to friends and family should also influence your decision. If you’re relocating from out of town, it’s essential to compare the overall cost of living in Philadelphia with your current city, factoring in expenses like travel and food, in addition to housing costs.
How to Buy a House in Philadelphia
- Saving for a Down Payment
Traditionally, a 20 percent down payment has been recommended for homebuyers. For a median-priced home in Philadelphia, this amounts to over $50,000 upfront. While saving such a substantial sum can be challenging, various assistance programs exist, particularly for first-time homebuyers. These programs, available at federal, state, and local levels, can offer loans, grants, or matched savings to help with down payments and closing costs. Moreover, many mortgage options do not necessitate a full 20 percent down payment, and some even require none at all.
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Find the Right Lender and Get Preapproved for a Mortgage
Prior to commencing your house-hunting journey, obtaining preapproval for a mortgage is crucial. This process helps you understand the amount you can afford to borrow, indicating to sellers that you are a serious and qualified buyer. While you can use the same lender for the actual mortgage application, it’s advisable to explore multiple lenders to compare rates and services before committing.
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Find the Best Local Agent
A knowledgeable real estate agent familiar with the Philadelphia market is invaluable. They can assist you in finding homes within your budget and lifestyle preferences, and provide expert advice during the offer and negotiation stages. Seek recommendations from friends, family, and colleagues, and also explore online listings for potential leads. Conduct interviews with two or three agents and review their online testimonials before finalizing your choice.
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Start House Hunting and Make an Offer
With a preapproval in hand and an agent by your side, you’re ready to begin viewing properties. Be transparent with your agent about your criteria and budget, as this enables them to narrow down suitable options. Be open-minded about exploring homes outside of your preferred neighborhood if they meet your needs. When you find a home you love, your agent will guide you in making a competitive offer.
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Get a Home Inspection and Appraisal
After your offer is accepted, scheduling a home inspection is crucial. This will identify any issues that may impact your decision to buy or provide grounds for negotiation with the seller. Additionally, if you’re obtaining a mortgage, a home appraisal will be required to assess the property’s value.
Conclusion
While buying a home in Philadelphia involves various steps and considerations, the city’s current market conditions offer favorable opportunities for buyers. With careful planning, assistance programs, and the right team of professionals, you can navigate the process smoothly and secure your dream home in the City of Brotherly Love.