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Understanding the basics of buying a home

For most people in Philadelphia and its suburbs, buying a home will be the largest financial transaction of their lives. Even couples who are purchasing their second or third house may be unaware of changes in the complex state and federal laws that regulate land sales. The summary that follows does not pretend to provide complete and authoritative legal advice -it merely explains the basics that are common to most if not all residential real estate purchases.

The first step in the process is finding a suitable house and signing a purchase agreement. Most purchase agreements are drafted by real estate agents using forms approved by the state realtors' association. The purchase agreement is the contract between the buyer and the seller - it sets the price and specifies any contingencies upon which the transaction depends. The failure of the responsible party to fulfill a contingency may void the agreement. The purchase agreement also specifies the buyers' rights of inspection and warranties concerning the condition of the house that are made by the sellers. Both buyers and sellers may wish to review the purchase agreement with an attorney before signing it.

The second stage is obtaining a mortgage loan. Most people will not have sufficient cash to pay the purchase price without obtaining a bank loan, and virtually all bank loans are secured by a mortgage - the borrower's agreement that the bank can repossess the house if the loan is not paid according to its terms. The lending process is governed by a number of state and federal laws that are mostly intended to protect borrowers, and every buyer should take pains to understand these protections. Most house buyers will be required to undergo a credit check in order to qualify for a mortgage loan, and the house must be inspected and appraised by people who are certified to do that work.

The final stage is the closing, a meeting between sellers, buyers, and their agents and attorneys to execute the deed, the note for the loan, the mortgage, and the other documents required by state and federal laws. The complexity of this process can be daunting, and retaining the services of Philadelphia attorney Lawrence Avallone can provide both information about the various steps in the transaction and protection for his clients' interests.

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