In an ultra-competitive market, buying a house sight unseen has become more common than ever. The pandemic caused a “great exodus,” with more people moving away from cities and into suburban homes to accommodate remote work and at-home schooling. In addition, mortgage interest rates are incredibly low, making homeownership within reach for many Americans. While all of this is great news for builders and real estate agents, it’s causing headaches and heartbreak for would-be buyers (particularly first-time buyers).
High demand and low inventory mean higher prices and more competition. Consequently, interested buyers can’t wait around to decide on a home; many sellers accept offers within days. With so little time to tour homes, more people are buying sight unseen, simply hoping to find a place to call home.
As a military spouse, I’ve done my fair share of moving around the world. But until recently, I’ve never had to buy a property sight unseen. I’m sharing our story, along with tips to help you find a house you’ll love, all without leaving your couch.
Some Good News for Buyers
If you’ve been following along over the past several months, you know that housing prices went a little bonkers this summer. One report shows a 17.2% increase in home prices from June 2020 to June 2021. We’ve all heard stories about record low inventory, bidding wars, and cash buyers paying tens of thousands over asking price.
As school starts back up and fall approaches, there are some signs that the market is leveling out. That doesn’t mean prices will start to go down, but it does mean that prices are rising less quickly than in recent months. Houses are staying on the market longer, and sellers are more willing to drop prices and make some concessions. Interest rates are still low, making this an ideal time for homeowners to purchase a home.
While all of that indicates good news for buyers, we aren’t out of the low inventory woods yet. Housing shortages remain rampant across the U.S., so it’s unlikely the housing market will reverse course anytime soon. Buyers can still expect competition from other buyers, potential bidding wars, and deals made at lightning-fast speeds.
A Personal Story About Buying a House Sight Unseen
We weren’t supposed to move this year. As a military family, we watched as many of our friends lost bidding war after bidding war as they attempted to buy homes in new locations. In the spring, I thought to myself, “this housing market is nuts. I’m so glad we aren’t buying this year!” But then, everything changed, and we suddenly had orders to report to a new location within a matter of weeks (so goes military life).
Thankfully, we already owned our home. If there’s one bright spot in this market, it’s that home prices have skyrocketed – which is excellent news for sellers. We sold our home in a matter of days, for above asking price, and for about 20% more than we paid only three years ago.
Of course, we needed that extra 20% to purchase a home in our new location. We connected with a Realtor near our new base, a fellow military spouse well-versed in buying a house sight unseen. She walked through several houses for us, sending us detailed videos of each. We initially made an offer on a lower-priced home, even offering about 10% over asking price, but were outbid by a cash buyer with a “significantly higher offer.”
Thankfully, though, we later found a house that checked each of our wish list boxes. We pulled out all the stops possible, using many of the tips from this article I wrote a few months back. We also included appraisal gap coverage, which many Realtors are now advising their clients to add if they’re able.
The sellers received multiple offers over the course of just a few days. Thankfully, they accepted ours.
And all this before we had even stepped foot through the doors.
Tips for Buying a House Sight Unseen
Now that we’re settling into our new home, I’m reflecting on this whirlwind buying adventure. Here are a few tips that made the sight unseen buying process a success for our family.
1. Find the Right Agent
Hiring the right real estate agent makes all the difference when buying a house sight unseen. It’s important to emphasize that it costs a buyer nothing to hire a Realtor in most cases. The sellers will pay both the seller and buyer agent commissions, so you don’t need to worry about the cost of hiring an agent.
Ask for recommendations for real estate agents in the local area. Interview Realtors before committing to one. It’s crucial to find an agent who:
- You connect with personally and professionally.
- Comes recommended by other clients.
- Is punctual, professional, and dedicated to helping you find the right home for your family.
- Is knowledgeable about the local area.
- Has experience representing both buyers and sellers.
- Has previous experience with sight-unseen buyers.
There are plenty of websites dedicated to helping buyers connect with agents, but I always find referrals to be the best bet. If possible, ask for recommendations from family, friends, or local groups, and start your agent search from there.
3. Communication is Key
Even the best agents can’t help you find the perfect home if they don’t know what you want. Be sure to communicate your preferences clearly to your real estate agent, including your “must-haves,” “would be nice to haves,” and “deal-breakers.”
Do you absolutely need a home with four bedrooms? Want a serene outdoor space? Prefer a two-story, but willing to take a ranch if it’s in the right area? Want to be within a particular school district? Absolutely do not want to back up to a busy road or live near train tracks? Detest weird smells, like cigarette smoke, mildew, or pets? (I can neither confirm nor deny that this was, in fact, my list).
Not only will this help your Realtor narrow down the focus, but it will also come in handy when your agent walks through a home without you. When you buy a house sight unseen, you’re relying entirely on your agent to give you feedback. The more details you can provide your agent, the better chance you’ll have of finding the right place.
4. Utilize Technology
Thankfully, today’s technology can give us a fairly comprehensive feel for a home, even before stepping inside.
Your Realtor likely has access to virtual touring software. Some listings even feature 3D walkthroughs or floorplans. But even if none of that tech is available, a simple video call is all you really need. Your agent can “show” you the home via a video chat or recorded video, helping you visualize the space and see every detail. During a live video call, you can also ask questions about the home or see specific areas more closely.
While it’s not exactly the same as an in-person tour, it’s undoubtedly the next best thing.
5. Phone a Friend
Don’t be afraid to ask family, friends, or co-workers for help. If you’re moving to a new area or can’t attend an in-person showing but know someone who can go, ask them to tour the home for you. Having an extra pair of eyes (and an extra nose – see #3 above) can help you determine whether or not the property is right for you.
In addition, Realtors must follow fair housing regulations and avoid “steering” buyers in one direction or another. But a close friend or family member can give you the brutally honest truth about a neighborhood and the home.
6. Sweeten Your Offer
It’s hard to make a big commitment like buying a home without seeing it in real life. Unfortunately, with houses selling like hotcakes, buying a house sight unseen might be your only option. If you find something that works, it’s best to act quickly.
With the market starting to level off, it’s possible to get an offer accepted without going well above and beyond. For us, however, we felt like the property was worth pulling out all the stops we could: higher earnest payments, not asking for any repairs, offering above asking price, and appraisal gap coverage. And, of course, I wrote a super sappy letter to the buyers.
Your real estate agent can help you write the strongest possible offer for a home. Some markets might not require an above-asking-price offer while others require it. Hiring a knowledgeable and experienced real estate agent makes all the difference in this process.
Now it’s your turn to tell us your story! Did you buy a house sight unseen this year? What advice would you give? Drop us a line in the comments below!