Selling a House in Pennsylvania

Selling a house is one of the most significant legal transactions you'll ever participate in. It's important to know your legal rights and understand the process.

Working With a Real Estate Agent

In Pennsylvania, real estate agents may act as a seller's agent, a buyer's agent, or as a dual agent, representing both the seller and the buyer in a sales transaction. Under state law, real estate agents must provide you with a written notice that details the possible agency relationship options available to you, and informs you that until you select an agency relationship, the real estate agent is not legally representing you.

The real estate agent must give the notice to you at your first meeting to discuss selling or buying real estate, and there is an oral disclosure for the agent to use if your first contact is over the phone. Even if you have not entered into written agency agreement, often called a listing agreement, a real estate agent providing you with service owes you certain duties, including:

• Exercise of reasonable skill and care
• To deal with you honestly and in good faith
• To present offers, counteroffers, notices and communications about a sale to you within a reasonable amount of time
• Disclosure of conflicts of interest and financial interests in services related to the sale, such as insurance, financing or inspection
• Accounting for deposit and escrow funds
• Keeping you informed about the progress of the sales transaction and assisting with tasks needed to close the sale

If you enter into a written agreement for the real estate agent to act as your seller's agent, he or she will owe you the additional duties of:

• Loyalty, by acting in your best interest
• Confidentiality (the agent must still disclose known defects about the property)
• Making a continuous and good faith effort to find a buyer for your property
• Disclosure to the other parties to the transaction that he or she is representing you in the sale as a seller's agent

Under the Pennsylvania Real Estate Seller Disclosure Act, a seller who intends to transfer any interest in real property must disclose to the buyer any material defects with the property by completing all applicable items in a property disclosure statement and must deliver a copy of the statement to the buyer prior to the signing of a written agreement by the seller and prospective buyer. Material defects are problems affecting the property's value, or which pose an unreasonable risk to people on the property.

A seller must disclose the following:

• Apparent defects
• Material defects, including any property damage, malfunctions of major systems and environmental hazards affecting the condition of a home, not readily visible to the buyer. There is not a material defect just because a structural element or a mechanical system is at, near or beyond its normal useful life.

In houses built prior to 1978, the seller is to provide notice that if lead-based paint exists, it may present a danger, provide a lead-based paint disclosure form, and provide information on hazards from inspections in the sellers possession.

Purchase Agreements

When you've got a serious buyer, you'll receive a written offer to purchase your home, sometimes called an "earnest money agreement," "residential purchase agreement," "purchase agreement," or "purchase contract," or "agreement of sale."

This agreement is the contract between the buyer and the seller for the purchase of the home. It should contain an accurate description of the property and all of the terms of the sale, including the price, the terms of payment, the type of deed to be given, the date of possession, provisions for the furnishing of title evidence, proration of real estate taxes and casualty losses, financing and inspections. In many cases, provisions for items of personal property or fixtures may be needed. Both the buyer and seller sign the purchase agreement, and all changes and concessions must be initialed by the parties.

It should contain an accurate description of the property and all of the terms of the sale, including the price, the terms of payment, the type of deed to be given, the date of possession, provisions for the furnishing of title evidence, proration of real estate taxes and casualty losses, financing and inspections. In many cases, provisions for items of personal property or fixtures may be needed.

If an offer to purchase is presented to you, it is your decision to accept or reject the offer. You won't have very long to decide whether or not to take the offer or propose a counteroffer so it's important to be informed ahead of time.

Common counter-proposal items include:

• A higher purchase price
• A higher deposit
• Giving buyer less time to remove contingencies
• Excluding certain items from the sale
• Providing you move in time to vacate the house after the sale is closed
• A clause making it a contingency that your attorney approve the contract
• A "liquidated damages clause" that details how much money the buyer will owe you if the buyer backs out of the deal for reasons other than the contingencies listed in the contract

Legal Title Issues

Your Pennsylvania real estate lawyer or title company will investigate the legal title of the property you want to sell, and may find title issues you'll need to understand.

In Pennsylvania, for example, an implied easement may be present where there has been a prior grant of an easement in a valid document that is too ambiguous to create an express easement. An implied easement exists where a person grants lands to which there is no accessible right-of-way except over her or his land, or retains land that is inaccessible except over the land which the person conveys. In such instances a right-of-way is presumed to have been granted or reserved. Such an implied grant or easement in lands or estates exists where there is no other reasonable and practicable way of accessing the property, and the same is reasonably necessary for the beneficial use or enjoyment of the part granted or reserved.

Your property may also be subject to a "lien," which is a charge on the property to satisfy a debt or other obligation owed by the current owner of the property that has been recorded in the public records.

In Pennsylvania, liens on a piece of property may include:

• Mechanic's lien
• Construction lien
• Tax liens
• Unpaid federal and state tax lien
• Unpaid child support
• In a divorce case, the court may award one spouse ownership of the marital home but grant the other spouse a lien on the property

Closing Costs

In Pennsylvania, you may need to pay for the following charges called " closing costs"-at the time you sell your home:

• Satisfying the remaining balance on loan, if house not paid in full
• Transfer taxes
• Documentary stamps on the deed
• Title insurance
• Property taxes (prorated)
• Broker's commission
• Home inspection

Specific Performance

In Pennsylvania, a seller who agrees to sell a particular property must do so unless the buyer fails to meet all the terms of the purchase agreement. This is called "specific performance." Specific performance is the court-ordered performance of each party's duties under a contract. Courts often award specific performance as an alternative to damages when the subject matter of the contract is unique. This is the case with real estate purchase agreements because each parcel of land is unique. If you have second thoughts on a particular sale, you'll want to immediately contact an attorney.