Many home buyers these days must move quickly. That’s because demand outweighs supply, and appealing homes that hit the market often generate bidding wars and sell fast. Houses in the Triangle market are averaging less than five days on average, and many are selling within hours of being listed.
Some buyers eager to move fast will buy a home ‘sight unseen,’ without ever touring the place in person.
This can be a good strategy in a competitive real estate market. But sight-unseen homes aren’t without risk. Here’s what you should know before making an offer.
What does it mean to buy a house ‘sight unseen’?
Purchasing a home ‘sight unseen’ means buying it without having toured the property in person first. Typically, someone buying a home sight-unseen will have looked at pictures and videos online and likely take a virtual tour. While it might sound odd to buy a home without having set foot in it, more and more home buyers are choosing to do so. According to recent research by Redfin, a surprising 63% of those who purchased a home in 2020 made an offer on a property they hadn’t viewed in person.
Why remote home buying is increasing.
There are several reasons why more buyers are opting to purchase a home sight unseen lately. As the COVID-19 pandemic continues, home buyers and home sellers are trying to reduce the physical touring of homes. In addition, improvements in online technology have improved the quality of pictures, videos, and virtual tours. Lastly, the market has changed. High buyer demand is pushing days on market times from days to hours.
Is buying a home sight unseen a bad idea?
It depends. The answer depends on your risk tolerance and the degree to which you perform due diligence on the property. Purchasing a home sight unseen can help you avoid a bidding war and buy your new home more quickly.
In an overly competitive market, the difference between getting an offer and not getting an offer can be hours or even minutes. For someone that is willing to forgo any potential issues with a home, submitting a timely offer may be the difference.
On the other hand, with a sight-unseen offer, you won’t have the benefit of previewing the property in person. You’ll need to rely solely on the photos, videos and virtual tours provided by the listing agent. This can be risky. Over the last many years, we have seen many homes that looked perfect in pictures, only to be significantly less than perfect in reality.
Several weeks ago, I received a call from an out-of-state client that saw a listing that was “the one”. I scheduled a tour and immediately smelled what I thought was mold. My nose and throat seized up as soon as I walked through the door. Upon looking into the crawl space, I saw a significant amount of standing water, along with a significant amount of black spots on the joists and insulation. You can’t smell a picture!!
How to Reduce the Risk of Buying a Home Sight Unseen?
If you’re considering this approach, how can you make an offer that doesn’t keep you up at night? Before making this major financial decision, follow these tips to protect yourself.
- Be Prepared: Before you make a bid, get pre-approved for a mortgage so you can act quickly when it’s the right time. Providing a pre-approval letter with your offer gives sellers a higher degree of confidence that you can purchase their property.
- Know Your Limits: Setting a budget is critical to any home purchase, but even more so when you may be competing with other buyers. Don’t get caught up in a bidding war only to regret it later.
- Don’t be Fooled by Photography: Advances in photography, videos and virtual tours can help you see more than ever before if a home is right for you. But be aware that photos can be edited to look amazing and spaces can be made to appear bigger than they are in person with the right camera equipment and technology. It’s important to note that the selected pictures can strategically leave out parts of the house or areas the agent or property owner doesn’t want you to see.
- Enlist a Professional: If you can’t be there, have someone review the property on your behalf. It needs to be someone you can rely on to look over the property objectively and help you identify potential pitfalls or reasons to walk away. If you don’t have a friend, family member, or co-worker who could help, engaging a realtor in this process is critical.
Yes, You Can Reduce Risk. But….
There are undeniable advantages to making a quick offer when the competition is tight or if you’re looking for a specific type of home in a desired neighborhood or community. Making an offer sight unseen will likely give you a leg up on your competition. But you also give up the opportunity to see for yourself where the property sits, the feel of the neighborhood, and other intangibles that can’t be easily communicated with photos or videos. There’s nothing quite like seeing a home in person to know whether it’s right for you.
Other Resources from Our Blog
3 Graphs Showing Why You Should Sell Your House Now: Link
“Testing the Market” is a Bad Idea: Link
Mortgage Q&A w/Luke: Link
About Log Pond Realty
Home is where your story begins. Home is where hopes and dreams are born, memories are made, and lives are lived. We would love the opportunity to assist you in writing your new story.
We service the Triangle region of North Carolina including Raleigh, Cary, Apex, Holly Springs, Morrisville, Fuquay-Varina, Durham, Chapel Hill, Wake Forest, and Garner.
Contact us: 919.589.3576 | email@example.com