Buying a home remotely is becoming increasingly common these days. It has been standard practice for some time in the real estate world for sellers to skip the home closing by pre-signing paperwork and having sale proceeds wired directly to a bank account, but now the whole process can be done from afar.Buying a Home Remotely: Who Does It and Why?
“People who buy remotely often do so to purchase a second home or vacation home,” says Todd Kaderabek, a residential broker associate with Beverly-Hanks & Associates Realtors in downtown Asheville, N.C. “Typically, they are from out of state and have jobs and other obligations that prevent them from spending a lot of time on the home-buying process.”
Financing can be a factor. “If a parent is buying a home for an adult child, they may decide to buy remotely, especially if they live out of state,” says Kaderabek. “In these cases the parent often buys the house sight unseen, handles all the paperwork and closing remotely, making an all-cash purchase.”
Real estate investors may also choose to buy homes remotely. Most real estate investors follow the 1% rule, which states that the monthly rent earned on a property should exceed that property’s monthly mortgage payment, so the investor at least breaks even on the property. It’s easier to find properties that follow the 1% rule in certain markets, which may be located a significant distance from the investor’s home base. As a result, buying a house remotely can be an attractive, time-saving option. (For more, see HomeUnion Review: A New Way to Be a Landlord.)
Whatever your reason for buying remotely, there are certain steps you can take to ensure the process goes as smoothly as possible.Find the Right Real Estate Agent
You will depend on your real estate agent to handle nearly the entire home-buying process, so it’s critical that you take the time and make the effort to find a good fit. “Home buying involves a lot of moving parts,” says Kaderabek. “It’s important to find a good personality match between the client and agent.” An interview is helpful (see below for some questions to ask), and it’s always a good idea to ask for references to see what other buyers have to say. (For more, see How to Choose the Right Real Estate Broker.)Ask About Remote-Transaction Experience
When you speak with a potential agent, Kaderabek recommends asking from the start: “How often have you done this process remotely?” Experience matters, and agents who work frequently with remote buyers are more likely to understand how it works, negotiate favorably and, perhaps most important, find suitable properties for the buyer. The agent should also be able to advise on a local lender. “A non-local lender is likely to use a non-local appraiser, which can be the death knell in unique markets like Asheville,” says Kaderabek.Ask About Availability
Many real estate agents work odd or part-time hours, which can be particularly bad for remote buyers. Your agent will serve as your proxy, so he or she needs to be available during regular business hours to handle a variety of tasks in the home-buying process, including home inspections. “I attend all home inspections, but with an out-of-town client it’s critical,” says Kaderabek. “In a world where home inspections take place between nine and five, it’s going to be very difficult for an agent to attend your home inspection if they have another job.”Share Your Wish List
Once you have an agent, share your wish list so the agent can help you find the perfect property. The more refined your list, the quicker the home search may go – to a point. If you have too many requests, it will likely slow down the process. Stick to the things that really matter – size, location, house style, walk-in closets – and leave out the minor details that would be easy to fix or update in any home. And if there are any deal breakers – features you absolutely could not live with (or without) – let your agent know early on, so he or she doesn’t waste time looking at the wrong properties.
“If you’re an agent, you have to take that bold step to call your client and tell them you’ve found the perfect property for them,” says Kaderabek. As a buyer, you need to trust that your agent knows exactly what you’re looking for, and that he or she has also taken the time to look closely at the home. “A home could look perfect on the internet, but a good agent will be able to say, ‘No, that’s not the home for you because it sits next to an active railroad track.’”Use the Due Diligence Period, If Your State Has One
Once a home is under contract, there’s time to review title documents and deed restrictions, as well as conduct inspections, financing and bank appraisals, before going to the closing table. In some states, including North Carolina, there’s an official due diligence period, typically lasting between 14 and 30 days, during which buyers conduct their due diligence and decide if they want to go through with the home purchase. (Note: This may not apply if the home is a new construction.)