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How to Buy a House from Out of State

19 Apr 2021

How to Buy a House from Out of State

Congratulations! You just landed your dream job. Now you need to move thousands of miles away, which means packing up and selling your current house, and finding a new way. It’s likely you need a place to live before you arrive, and this is a time intensive, stressful and expensive process even when you are moving close by. If you are single, a short-term rental is a good option. But if you have a family, a new home would be a much better option. But how do you search for a house when you are thousands of miles and unfamiliar with the area?

First, take a deep breath. It’s not as daunting as it seems—and it’s an increasingly common scenario. One third of people surveyed in 2017 said they bought a house without first seeing it in person. Millennials were most likely to make an offer sight unseen to buy a home out of state, with 41 percent reporting they had done so. Instead of using their feet to explore potential homes, these buyers used technology, either online video walk-throughs or a real-time video tour offered by a real estate agent.

Step 1: Assess Your Situation

Buying a home in another state is usually spurred on by a job offer. Before stressing about how you will house hunt across the country while finishing up your current job, check to see what resources are available to you, and your timelines restrictions. Here are some things to consider, based on a survey of 1,000 people who relocated for a job.

  • Timeframe: Some employers require new employees to relocate and start working immediately (41% of survey respondents), while others were willing to provide more time to make the big move.
  • Reimbursement: About a quarter of employees reported receiving assistance with moving expenses while about a third received no assistance.
  • Reimbursement details: Reimbursement most commonly involved assistance with moving expenses (26.44%) and least commonly involved help with temporarily living expenses (15.75%) and sponsoring house-hunting trips (7.3%)

Some companies will provide employees with relocation specialists to help with many aspects of relocating themselves and their family. Individuals can also hire relocation specialists on their own if they have the means to do so, but not the time or interest in talking a more leading role in the house hunting process.

Step 2: Go Online

You wouldn’t go on vacation without first researching what you want to do and where you will stay. House hunting and relocating to a new city and state is no different. You need to be prepared for the best results. But settle in, this isn’t a weekend, week- or month-long trip. This is your new life— so you need to do a lot of research. Randomly calling Realtors or planning to visit a slew of open houses will be ineffective if you don’t know what you want.

First, visit tourism, chamber of commerce and government websites to learn about the state and area you are moving to. These websites provide information including popular activities, cost of living, the business landscape, and both population and population density (some people want their neighbors closer than others). This is the fact-based side of the research.

Then you need to research the qualitative side. This takes a little more time and digging, but thanks to the Internet, is much easier than it used to be. The letters to the editor section of a local newspaper used to provide a sense of the community. These days, local newspapers sometimes charge for online access, while others don’t. But don’t stop there.

Some of that information has moved online to Facebook groups. Where these groups are public (and unfortunately many are private) you can see what concerns local citizens. In some cases, you will be able to comment yourself, in which case ask questions about neighborhoods, schools and the local real estate market. If you can’t ask these questions but can look, search the page for property taxes and houses and you will likely get many insightful, if not amusing, posts.

Moving involves a choice of locations, either parts of a city or town, or a number of towns to choose from that are all within driving or public transportation to a job. Once you have a short list, dig deeper. Here are some things to consider:

  • Child wellbeing: The Annie E. Casey Foundation KIDS COUNT data book tracks the wellbeing of children and families by state and county. It may be a county a little farther from your new job, but be a better place to live.
  • Safety: No one wants to live in a high crime area. Do your research about different towns and cities.
  • Political makeup: Many people prefer to live among those who share their political views. The Secretary of State in each state collects data on local voting patterns and political affiliations.
  • Education: If you have kids, the local schools are a top concern. State Departments of Education and local school district pages provide information on area schools including, test scores, class size, educational philosophy, funding and other measures.
  • Property tax rates: Property tax rates vary widely. Research the rates in the towns and cities you are considering carefully, as property taxes are a big chunk of monthly housing expenses.

Step 3: Out of State Home Hunting 101

Once you have narrowed your focus area to part of a city or a few towns, head to the real estate listings. Start your search online at mls.com, Zillow, realtor.com or other local listing sites. As you find houses that appeal to you, take virtual tours, look at pictures, and toggle between your house hunting screen and Google Maps. Use the satellite function to get a street view of houses you are interested in. The nicest house is not so nice when the train tracks or a huge shopping plaza are just through the woods, or even worse, right behind the fenced. And you can be certain the listing agent skipped that photo.

Armed with some initial research about your target area, you are ready to find a real estate agent. You could do it yourself, by searching listings in a given price range or town and seeing what agents’ names frequently pop up, or you could save yourself the time and hassle. Homelight uses technology to match buyers with the right agent. The free service gives you a list of the top three, letting you do further research and interviews. Real estate agents cannot advertise on their site. Once you have your short list, watch out for these red flags. You can also get real estate agent suggestions through word of mouth. Ask friends, family, connections at your new job, or even people on local Facebook groups for advice on choosing a local agent. Look for a real estate agent who:

  • Knows the local area
  • Is a buyer’s agent, meaning they only represent you. A listing agent sometimes represents both parties and because of this they don’t have your interest in mind first and foremost.
  • Will send daily MLS listings and updates on price reductions of properties of interest.
  • Is willing to use Facetime or Skye to offer real-time virtual tours of properties in lieu of traditional home visits.

Beware that there are a few situations where you need an agent with specific qualifications. If you are buying a HUD home, you need a HUD-approved agent. If you are considering a short sale (a home that is on sale for less than the amount owed by its current owner), you want an agent experienced in these transactions. Make sure to get a mortgage pre-approval letter before you start your home search so buyers know you are serious. This letter can be obtained in as little as 10 minutes through a phone call or online.

Step 4: Purchasing Your Home in a Different State

Thanks to technology, getting a mortgage and purchasing a house can easily be done from another state, if you are prepared. In most states, shopping for the best mortgage rate can be done online (and sometimes is) regardless of the situation. Be prepared with all the needed documentation (including credit score, pay stubs and bank account information) to bring to your mortgage lender, if you are using a national bank with offices in your current state, or to send electronically.

The buyer’s agent will facilitate most of the paperwork from your new city while you pack up and get ready to move. There are a number of items to tick off your list, many of which are done online or by phone regardless of location including:

  • finding a title company
  • getting homeowner’s insurance
  • setting up a home inspection
  • setting up an appraisal

Buyers who have the ability to travel once in the process, might consider attending the home inspection. If that’s not possible, your real estate agent will attend on your behalf.

The final step in the process is setting a closing date. Your lender will send you an itemized statement of closing costs, down payment and any other charges. The closing itself takes an hour or so and generally involves signing your name to reams of paper. Closing can be done remotely, but most states require original, and sometimes notarized signatures, on closing documents. This requires visiting a local notary, but not being at the closing. As you might for an in-state purchase if you are not using a cashier’s check, the money for the down payment requirement can be wired to the title company. Just be sure to double check the instructions before wiring.

Step 5: Move Into Your Dream Home

Moving is a stressful event, and buying a second home thousands of miles away, possibly without seeing it in person, can be even more stressful. Meanwhile, you are trying to sell your current home and pack up. If you can’t sell you current home, you could temporarily convert it from a primary residence to a rental property and put off selling it. The investment property, if you are up for the challenge of being a landlord, could bring in additional income. Either way, remember that the stress will be worth it in the end when you settle in your new home and new job.

Own Up has helped thousands of people become homeowners and worked with them throughout the homeownership journey. If you have questions about buying a home from out of state, give us a call. We’d love to be your co-pilot.