Pennsylvania Real Estate Terms Every Buyer and Seller Should Know
Real estate has its own language, and Pennsylvania adds a few terms you will not hear in other states. This guide explains the terms buyers and sellers in Doylestown, Bucks County, and suburban Philadelphia meet most often, in the order they come up, from the first conversation to settlement.
- 01 Getting Started
- 02 The Offer and the Agreement of Sale
- 03 Inspections and Due Diligence
- 04 Money and Settlement
01Getting Started
The forms and first steps before a home is listed or an offer is written.
What is the Pennsylvania Consumer Notice?
A Pennsylvania-required form your agent reviews with you at your first substantive conversation. It explains the types of business relationships available and what each one means for you.
Do I need to sign a buyer agency agreement in Pennsylvania?
A written agreement between you and your buyer's agent. In Pennsylvania it must be signed before touring homes listed in the MLS, and it must state your agent's compensation clearly.
What is a listing agreement?
The contract between a seller and the listing brokerage. It sets the list price, marketing plan, length of the listing, and compensation.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is a quick estimate. Pre-approval means a lender has reviewed your income, assets, and credit. Sellers take pre-approved buyers more seriously.
What is the Seller's Property Disclosure Statement in Pennsylvania?
Pennsylvania requires sellers to disclose known material defects on a state-compliant form. Buyers must receive it before signing the Agreement of Sale.
What is a Comparative Market Analysis (CMA)?
An agent's review of recent comparable sales, active listings, and market trends to estimate a home's value and guide pricing.
What is Inspect, Correct, Protect?
Jeff's pre-listing approach: inspect the home before it hits the market, correct what matters, and protect the sale from surprises during the buyer's inspection.
What is the Pick Two Principle?
Jeff's framework for buyers: Property, Place, Price. You can usually have two of the three, and the market decides the third.
02The Offer and the Agreement of Sale
What goes into a Pennsylvania offer, and where the room to negotiate is.
What is an Agreement of Sale in Pennsylvania?
Pennsylvania's name for the purchase contract. Once signed by buyer and seller, it governs every term of the sale through settlement.
Is the purchase price the only thing I can negotiate?
The amount the buyer agrees to pay. Rarely the only lever. A slightly higher price with cleaner terms often beats a lower offer with heavy conditions.
What is an earnest money deposit, and who holds it?
Money the buyer puts down to show serious intent. It is held in escrow, typically by the listing brokerage or a title company, not given to the seller.
What is an escalation clause?
Raises the buyer's offer by a set amount above competing offers, up to a stated maximum. Useful in multiple-offer situations.
What is appraisal gap coverage?
The buyer's promise to cover some or all of the difference if the home appraises below the contract price.
What are contingencies in a real estate contract?
Conditions that must be met for the sale to proceed, such as mortgage, inspection, appraisal, and sale of the buyer's current home. Each has negotiable deadlines.
What is a home sale contingency and a kick-out clause?
Makes the purchase depend on the buyer selling their current home. A kick-out clause lets the seller keep marketing and accept a stronger offer if the buyer cannot remove the contingency in time.
What is a seller assist?
A seller credit toward the buyer's closing costs, written into the Agreement of Sale. Limits depend on the loan type.
What are inclusions and exclusions?
Which appliances, fixtures, and personal items stay or go. Put it in writing so nothing is assumed.
Can the settlement date be negotiated?
The target date for closing. Timing can matter as much as price to a seller buying their next home or a right-sizer planning a move.
03Inspections and Due Diligence
What buyers check before the sale is final, including issues common in Southeast PA.
What is the inspection period?
The window for the buyer to complete inspections and request repairs or credits. Shorter periods make an offer more attractive. Longer periods give the buyer more protection.
How do repairs and credits work after a home inspection?
After inspection, the seller can make repairs, offer a credit, or reduce the price. Sellers who follow Inspect, Correct, Protect face fewer surprises here.
Should I test for radon when buying a home in Pennsylvania?
Radon is a naturally occurring gas. About 39% of radon tests in Pennsylvania come back above the EPA action level of 4 pCi/L, so testing is standard here.
Do I need a septic or well inspection in Bucks County?
Many homes in Central and Upper Bucks use private septic systems and wells. Buyers commonly order a septic inspection and a well water test.
Why do buyers in Southeast PA get stucco inspections?
Stucco homes in Southeast PA have a history of hidden moisture damage. An invasive stucco test can find problems a standard inspection misses.
What is a wood-destroying insect inspection?
Checks for termites and similar pests. Many lenders require it, and who pays for it is often negotiated.
What is the lead-based paint disclosure?
Federal law requires sellers of homes built before 1978 to disclose known lead-based paint and give buyers a chance to test.
What happens if the appraisal comes in low?
The lender's independent estimate of value. If it comes in low, the buyer and seller may renegotiate, or the buyer may cover the gap.
What is a survey contingency?
Confirms property boundaries and easements. Who orders it, who pays, and the deadline are negotiable.
What is a U&O certificate in Pennsylvania?
Some townships and boroughs require a resale inspection and U&O before settlement. Others require it only for new construction. Rules vary by municipality, so check early. Repairs can take weeks.
04Money and Settlement
The costs, taxes, and final steps on the way to the closing table.
What is settlement in Pennsylvania?
Pennsylvania's word for closing. Documents are signed, funds are transferred, the deed is recorded, and the buyer gets the keys.
What are a title search and title insurance?
The title search confirms the seller can legally transfer the home. Title insurance protects against hidden ownership problems found later.
How much is the realty transfer tax in Bucks County, and who pays it?
Charged when property changes hands: 1% to the state plus a local tax. In the Central Bucks School District, the combined rate is 2%. Buyer and seller customarily split it, but the split is negotiable.
What are prorations at settlement?
Property taxes, HOA dues, and similar costs are divided by the settlement date so each side pays only for the time they own the home.
Who pays closing costs in Pennsylvania?
Title, settlement, recording, and lender fees. How they are split between buyer and seller is negotiable.
What is private mortgage insurance (PMI)?
Lender-required insurance on conventional loans with less than 20% down. It can usually be removed once you build enough equity.
What is a mortgage rate buydown?
Prepaid interest that lowers the mortgage rate, either permanently or for the first years of the loan. Sellers sometimes fund one as a concession.
What is an HOA resale certificate in Pennsylvania?
Pennsylvania requires condo and HOA sellers to provide a certificate with dues, rules, and financial information. Capital contributions and fees are often negotiated.
What is the final walk-through?
The buyer's last look at the home before settlement to confirm its condition and that agreed repairs were made.
What is a leaseback?
Lets the seller stay in the home for a set period after settlement. A valuable tool for move-up sellers who need time to close on their next home.
Have a term you want explained?
Jeff Linden is a Residential Real Estate Advisor with RE/MAX Services, licensed in Pennsylvania and New Jersey. He lives in Doylestown and helps sellers moving up, right-sizers planning their next chapter, first-time buyers, and families relocating to Bucks, Montgomery, and Chester Counties and Greater Princeton, NJ. Before real estate, Jeff spent more than 20 years in leadership with Marriott International, and he brings that same disciplined strategy and hospitality mindset to every transaction.
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This guide is for general information only and is not legal, tax, or lending advice. Requirements vary by municipality, lender, and transaction, and rules can change. Consult your agent, attorney, lender, or tax professional about your situation. Radon statistic: Pennsylvania Association of Realtors, citing the American Lung Association. Each RE/MAX office independently owned and operated.