Your Pennsylvania Home Is Under Contract but Has Not Closed
Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.
A signed contract settles the timing question. It does not settle the transfer tax question, because both deeds still get recorded.
Where underwriting draws the line
A contract is a promise; funding is an event. The departing residence's payment comes out of your debt-to-income ratio when the file can show the sale is done or documented to the point the guideline accepts, and not before.
If your purchase closes before your sale funds, you are qualifying while holding two payments regardless of how solid the contract looks.
What a contract does not change
The transfer tax count. Pennsylvania realty transfer tax attaches to each transfer of real estate, at 1 percent at state level plus any local rate collected by the county Recorder of Deeds.
Having a buyer lined up means the second deed is coming sooner, not that it is free. Both transfers are taxable. See the transfer tax page.
What to have ready
- The fully executed contract on the departing home.
- The closing disclosure or settlement statement once it exists.
- Current statements on the departing mortgage, taxes, insurance and any association dues.
- Evidence of reserves, which is usually what carries a file through an overlap.
Your agent and your closing agent handle the contract and its dates. We work on what the money has to do around it.
Which structure fits
| Structure | Fit when under contract |
|---|---|
| Carry both, recast after | Strong. Proceeds become the recast principal reduction, and nothing depends on an investor accepting an offset |
| Borrow against departing equity | Workable. The second is repaid from the sale proceeds at that closing |
| Keep it and rent it | Generally unavailable once committed to a buyer, so the one-transfer saving is off the table |
That last row is worth noting. Once the departing home is committed to a buyer, the structure that would have avoided a taxable transfer is no longer available, which is a reason to run the comparison before signing rather than after.
The market is helping
Every Pennsylvania metro rose year over year as of August 2026, which shortens expected marketing time and supports a lighter reserve tier. See the move-up market page, the structures page, and if your home is listed rather than under contract, listed but not sold.
Frequently asked questions
Does a signed contract on my current home remove that payment from my ratio?
Not on its own. Underwriting treats a contract as a promise and funding as the event. The departing residence's full PITIA generally stays in your debt-to-income ratio until the file documents the sale, which in practice means the executed contract plus the closing disclosure or settlement statement.
Does having a buyer reduce the Pennsylvania transfer tax?
No. Realty transfer tax attaches to each transfer of real estate, so both the purchase deed and the sale deed remain taxable. A contract brings the second transfer sooner; it does not remove it.
Is it too late to consider keeping the home once it is under contract?
Generally yes, and that matters because the rental route is the one structure that records a single deed rather than two. It is a reason to run the comparison before committing the departing home to a buyer.
Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. Pennsylvania realty transfer tax is collected by county Recorders of Deeds and local rates vary by municipality and school district; your closing agent, your CPA or a Pennsylvania attorney, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.