There are several reasons why you are looking at a property outside of your state – you want or need to relocate, you want a vacation home, you're looking for an investment, or you’re buying for children. As you might know, buying a house isn’t really an easy task, and maybe even more so if it’s not within your local area. The whole process would double your need for time and money resources if you want to be more hands on it. But if that mode can’t fit into your busy schedule and tight budget, here are some tips to help you with buying a house remotely.
Hire a good agent.
It's always important to hire a good agent when you’re buying property because they’re the ones who would communicate in behalf of you to the sellers, would deal with most of the paperwork, have you in the know on some real estate jargon, and optimally, put you up with a good deal on the house of your liking. And if you’re buying outside of your state, they would act as your proxy which means that your agent would have to deal with nearly the entire home-buying process. Do your homework; research and ask for suggestions from trusted friends so that you can make sure that you find an agent that you could communicate well with. You could have a pool of choices and conduct and interview. If you want to know the right questions to ask during an interview, see How To Choose The Right Real Estate Broker.
Be clear on what you want, and what you’re buying.
It’s good that you are clear on what you want on your house so that your agent can find properties that are suitable for you. Make a list and give him or her examples of houses with features that fit your needs and liking. But don’t just settle in giving them details about the aesthetics and layout! Also give your agent details about your preferences in the neighborhood, whether you want it close to schools and hospitals or if you want it to be in a tranquil, secluded area. Also, list down things that you want to be sure of will be included in the sale such as fencing and fencing posts, benches, feeders, shelters and livestock pens, existing farm or hunting leases that give other people the right to be on – farm, graze, hunt, or camp on.
Map your time.
Consider your schedule. If you could squeeze in a day or two for a trip to the property, that would be good so that you could personally look and check the house. But if your busy life doesn’t permit it, still give it ample time in your schedule to have meetings with your agent and your lawyer so that you can be assured that things are doing well and even if you’re not firsthand dealing with the transaction.
Do your research.
Buying a house is a serious task that involves a hefty amount of resources such as time and money, so be sure to be well-informed on what you’re buying. First thing to consider is that you might want to select a property in an area that features healthy housing markets and a strong economy so that your financing doesn’t fall through. Also, if you want to be sure of what you’re buying and will be taxed on, you (or your agent) will need to visit the county assessor’s office. Compare the information on the property from the office with that from what the seller is listing. If you find any discrepancies, talk to the assessor to find out why. Another important matter to consider, especially now that you want to purchase in a rural area is to check their rural resources. Acquaint yourself with the County USDA Farm Service (FSA) office so that you could be familiarized with conservation issues such as erosion control, wildlife habitat, pond construction and other challenges that you may not be ready for as a city dweller. They can tell you about the resources you may need and answer your questions about rural living.
Consider renting first before buying.
Moving from the chaos of the city to the peace and quiet of the rural seems like a good and refreshing idea. But sometimes, ideas just look good in your head. If you have the luxury of time and money to test the waters and rent out the house before you buy it, consider doing so. According to Paula Pant from AffordAnything.com, an expert on buy-and-hold real estate investing, it’s worth a try to rent first since housing is an investment that cannot easily be liquidated. She suggests spending at least 6 months in the place. This could brace you and your family for life away from the city. You could also have the chance to familiarize yourself with the area and the house to see if it suits your lifestyle or if it’s worth making a switch in your lifestyle to.
Make sure to check the title search and insurance.
If you’re buying a rural property, it’s possible that the land has been listed as a dump-site or a hazardous waste site. Have your agent check the title for the specific property or buy the title insurance so that you can be sure that it’s safe for you to stay in. Another issue that could be addressed by checking into the title is for avoiding liens or encumbrances. This will make sure that the property is really owned by the seller, if there are any tax liens or legal actions against the property.
Consider financing matters.
You know that a real estate purchase can be financed using a mortgage. If you want to purchase through this way, have your credit reports ready. The leveraging offered by financing is a huge advantage to you as a buyer, but there are some caveats to consider if you’re buying the house as an investment. According to Bankrate, mortage insurance doesn’t cover investment properties, which means that you have to pay more than 20% of the total purchase price to gain financing.
Request a walk-through contingency.
If you haven’t had the time to physically see the property, it’s advisable to negotiate in the contract a walk-through contingency so that if the property does not measure up to expectations in person, you will be safeguarded. Do take note though that sellers are not required to agree to it and may ask for a higher purchase price in order to comply.
Know about remote closing.
When you’re about to close the deal, remember that purchase paperwork is full of a lot of lingo that you may not understand as a buyer. Have your agent assist you with those and make some research of your own. Also remember that remote closings hinge on the ability to locate a mobile notary, so you'll need to ask your lender, agent, or title company for recommendations early on in the process.
Have an exit plan.
In case you need to move out for some reason, assess what’s the best option for you to make and consider the time and costs involved. Would it be better to rent the place out or sell it? Have yourself and your trusted agent assess what option could be a better return for your investment.
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Counseling Session Activities
- Prepare the buyer for executing a buyer representation agreement
- Explain agency relationships to the buyer and get state required legal consent to represent, if needed
- Inform the buyer of working relationship based on state law, the REALTORS® Code of Ethics, and the broker’s business policies
Building a Relationship
- Learn the buyer’s wants and non-negotiable needs
- Understand the buyer’s budget and what will be needed financially
- Help the buyer understand what property their chosen budget will buy
- Consider having the buyer fill out a homebuyer’s checklist
- Assist the buyer in examining how much they can afford to spend
- Provide quality lender resources
- Partner with the buyer to locate suitable properties for consideration
- Match the buyer’s needs with available property
- Constantly re-evaluate buyer’s needs and refocus property showings to fit those needs
- After ensuring the buyer understands what is done for them, how it is done,and the benefit to them, obtain signatures on the buyer representation agreement
- Explain how compensation is paid, who pays it, and what the buyer’s options are for paying it
Educating the Buyer
- Communicate the working relationship based on state law, the REALTORS® Code of Ethics, and the broker’s business policies
- Explain Federal and State Fair Housing laws
- Explain what to look for in applicable property disclosures
- Reassure the buyer that their personal information will remain confidential
- Inform the buyer that you will always disclose all known material defects
- In accordance with state law, provide information on checking the sex-offender registry and crime statistics for the neighborhood
- Discuss available resources that the buyer can check to learn more about prospective neighborhoods
Preparing the Buyer
- Explain the timeline for house hunting, mortgage approval, and closing
- Explain the local market and how it impacts the buyer
- Show statistics on what percentage of list price sellers in the area are currentlyreceiving
- Inform the buyer on what home features are popular
- Identify current average days on market
- Share the dangers of using the price per square foot to figure home values
- Explain the concept of absorption rate and how it impacts the buying process
- Indicate current listing months of market inventory
- Share estimated potential out-of-pocket costs to complete the transaction
- Assist the buyer in analyzing the loan estimates
- Qualify the buyer for financial ability to purchase
- Help the buyer account for the complete costs of homeownership
- Prepare lender for listing agent calls
- Assist in comparing different financing options
- Help the buyer select for viewing only those homes that fit their needs
- Proceed in showing homes that fit the buyer’s must-haves
- Caution the buyer on posting information to social media
- Review the sample sales contract so the buyer is prepared when it comes time to make an offer
Showing Properties
- Schedule showings and provide access to all listed properties as soon as they become available in their local MLS broker marketplaces
- Educate the buyer on the immediacy of new listings appearing in their local MLS broker marketplaces and the lag time for them to appear on some websites
- Collaborate with the buyer on properties they may have learned about through their sphere contacts
- Research and assist on all unlisted properties the buyer wishes to see
- Preview properties prior to showing if needed
- Network with other agents to source properties not yet in their local MLS broker marketplaces
- Contact homeowners in focus areas to see if they are considering selling
- Set up an automated email alert system through their local MLS broker marketplaces that immediately notifies the buyer of properties that fit discussed requirements
- Arrange a tour of areas, schools, and key points of interest
- Provide resources containing neighborhood information on municipal services,schools, etc.
- Inform the buyer of negative aspects like nearby venues or operations that may result in issues that could impact value
- Collect and share any other vital information on available homes, remembering to follow all fair housing laws at all times
- Check applicable zoning and building restrictions
- Help the buyer decipher public property and tax information
- Collect and share pertinent data on values, taxes, utility costs, etc.
- Compare each property shown to the buyer’s wants and needs list and remind them of what they were looking for
- Help the buyer narrow the search until the buyer identifies top choices
Negotiating Offers
- Assist the buyer in getting the best property at the best price
- Suggest that the buyer learn more about the neighborhood prior to makingan offer
- Prepare a comparative market analysis (CMA) in advance of making an offer
- Prepare the buyer to have the most attractive offer in the current marketplace
- Explain common contract contingencies and include approved protective clauses in the purchase offer
- Ensure that the buyer receives and understands all state and federally-required disclosure forms
- Prioritize contract negotiation goals with the buyer
- Help create a negotiating strategy
- Use strategies such as an escalation clause to maintain a competitive offer
- Prepare the buyer for a multiple offer situation and develop negotiation strategies
- Write an offer that has a reasonable chance of being accepted
- Recommend optional contingencies and explain the pros and cons of using them
- Provide information on purchasing incentives that may be available
- Discuss financing alternatives
- Negotiate the buyer’s offers to arrive at the best price and terms
- Utilize hyperlocal expertise and strong communication skills to assist the buyer in being the successful offer
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