Everything You Need To Know About Purchasing A House Remotely
Purchasing a home without ever visiting the property has become a widespread feature in the real estate world these days. Buyers no longer have to speak with the seller directly or take multiple visits to a house to close on the sale and transfer ownership. However, purchasing a home has always been a big decision, so you should make a remote purchase when you can't make alternative arrangements or certain considerations are in place regarding the property.
Investopedia notes that it's crucial to work with a real estate agent that you know and trust when approaching a remote home sale. This person will be your liaison throughout the process. In addition, their industry expertise and firsthand knowledge of the place will stand in as a counterweight to the lack of specific knowledge you'll bring to the table.
As well, Moving.com suggests taking a bit more time than you might typically spend on understanding your specific needs for the property. Every home buyer will come to the market with their list of must-haves and often an alternative list of dealbreakers. Spending time on these will help you narrow the search field and select exactly the type of house you're looking for. With these key features of the search in focus, buying a home remotely can be done confidently.
Remote home purchases have taken place for years
This trend of purchasing a home without visiting the property in person is not new. Many people have invested in vacation properties and purchased real estate additions to their investment portfolios for many years (via Investopedia) without being there in person.
When investing in real estate (specifically to augment retirement or wealth-generating portfolio), buyers won't always use their local marketplace. But, just like stocks, bonds, gold, and other assets, eliminating the geographical restrictions that are placed on more traditional property purchases can open up a world of possibilities when it comes to locating and capitalizing on the perfect investment option.
Investopedia recommends following what's known as the 1% rule when investing in property, specifically that which exists outside your local marketplace. This is to say, you'll want to do your due diligence and ensure that any real estate you're considering will net a 1% return on your investment — at a minimum. This creates a crucial buffer against unexpected maintenance costs that will keep your investment at break-even in the short term (and expand it significantly over the long).
Time reports that many local marketplaces have shifted course over the last few years, creating a one-sided seller's market. This means competition for great properties — in your local area and beyond it — is becoming stiffer, making the utility of remote purchasing even more attractive for fast action on new investment opportunities.
Use browsing services to peruse listings with time to spare
There's a critical period during any home search in which you spend countless hours browsing through listings to understand what's available on the market and how much space you can get for your money. However, when buying a property in a far-flung location, the lead time on this part of the search needs to be extended. Thankfully, many home listing services exist in the virtual marketplace these days and can make this part of the process a little easier, according to Moving.com.
Browsing for a property that serves your needs is more than an exercise in seeking out a great place. As a means of beginning your search, it also serves to help you narrow your focus on essential amenities and inclusions. Many buyers haven't completely hammered out their must-haves and dealbreaker lists. It can be tough to finalize these essential elements of the home search if you aren't physically visiting properties, so taking additional time to peruse listings on real estate listing sites can give you the edge you need to make a more focused list of must-haves and absolutely no's.
Take your time with photos and seek out virtual tours
Photographs of a property can be notoriously difficult to gain essential information from. For example, wide-angle shots designed to capture a room's expansive volume can hide the property's true dimensions (while showcasing a huge amount of space in each picture), according to Moving.com.
Getting your hands-on specifications to match room sizing and layout with pictures that may not tell the whole story is a great start here. Although, the best substitute for a physical viewing of any property is a virtual tour. Many real estate agents have begun to film an interior walkthrough of the properties they represent, allowing buyers to view homes they're interested in with greater detail and understanding than pictures alone can provide.
Taking a virtual tour of properties gives you a more comprehensive image of the space. And whether you have to organize this with the real estate agent or can simply watch a video already uploaded alongside static photographs, taking the time to complete this additional step in the evaluation process is an invaluable asset.
Work with a real estate agent you trust
Real estate agents are specialized professionals with intimate knowledge and understanding of the local marketplace they work within, Forbes notes. Real estate is different from other asset classes in that purchasing a home can bring your financial interest anywhere in the world (much like stock investments). Still, those properties are illiquid and locked into the soil they're built on top of.
Local real estate agents are a critical asset for home buyers who are experienced in the marketplace (buyers interested in properties nestled in their own local areas, or hometowns, for instance), and they're even more valuable for buyers seeking a property investment beyond their personal area of familiarity.
For a purchase that will take place beyond your local market, your point of contact and person on the ground will be the real estate agent you choose to work with. They can visit the properties you have your eye on and give you essential feedback on the locations and layouts of homes that you've earmarked. Of course, the expertise of a real estate agent is essential. Still, it comes to the foreground as a crucial point of assistance in the beginning and finishing the search for a property when buying remotely (via Time).
Organize your finances, focusing on continuity
When purchasing a new home, you'll likely be using mortgage financing to close on the transaction. However, only 25% of homes bought in 2021 were purchased in a cash-only transaction, the National Association of Realtors notes. This means that financing the transaction is a crucial component in conducting the purchase, but issues of financial continuity can complicate a long-distance buy.
If you're buying a home hoping to make a cross-country move, you may need to prove to the lender that your finances aren't changing substantially. This can be as simple as providing a new job contract — leading to the decision to relocate. However, many families see their moves come during messy circumstances.
Even in the event of a move for career purposes, entering into a new job alongside the purchase of a new home can give lenders pause, Time notes. As a result, you may want to consider saving for a longer period to show fiscal viability beyond the traditional emergency savings and down payment figures. Taking the time to get your finances right is essential during any new real estate purchase, but it can make up the difference between success and failure in a remote buying opportunity.