1 In 3 Home­buy­ers Made An Of­fer On A Home Sight-Un­seen

ForbesWeekly - - NEWS - BY KATE ASH­FORD, FORBES CON­TRIB­U­TOR

Shop­ping for a home has al­ways been some­thing of an ar­du­ous process. But lately it’s got­ten even cra­zier. Con­sider Redfin’s re­cent sur­vey that found that one out of three peo­ple who bought a home in the last year in 11 metropoli­tan ar­eas made an of­fer on a house sight-un­seen. That’s up from one in five a year ago.

This is par­tially be­cause of mar­ket con­di­tions. “Homes are go­ing un­der con­tract faster than ever,” says Rachel Musiker, se­nior com­mu­ni­ca­tions man­ager at Redfin. “The typ­i­cal home that sold in May went un­der con­tract in 37 days, and that’s the low­est num­ber we’ve recorded since we’ve been track­ing this trend in 2010.”

The mar­kets tracked in this sur­vey are some of the fastest in the coun­try, and they’re also places that at­tract a lot of re­lo­ca­tors – peo­ple chang­ing cities for a job or other rea­sons. “They can’t be fly­ing in ev­ery sin­gle week­end to be tour­ing homes,” Musiker says. “So some­times if a home hits the mar­ket on Thurs­day and we know it’s go­ing to go un­der con­tract by Sun­day, and if you think this is the one, you might have to make a re­ally in­formed de­ci­sion be­fore you see it in per­son.”

Luck­ily, that’s not hard in this age of mod­ern tech­nol­ogy. There’s a vast amount of in­for­ma­tion avail­able on­line about houses and neigh­bor­hoods. And sites such as Redfin of­fer 3D in­ter­ac­tive pho­tog­ra­phy on list­ings. “It’s a 3D im­age that lets you walk through the home vir­tu­ally,” Musiker says. “Redfin agents also con­duct video show­ings live via FaceTime or Skype.”

Other home­own­ers have a friend or

fam­ily mem­ber in town who can check the house out for them. “There’s just so much in­for­ma­tion avail­able on­line that I think peo­ple now feel con­fi­dent that they know what they’re get­ting. It’s not just a crap­shoot.” Musiker says.

And the sur­vey data doesn’t mean peo­ple don’t see a house at all be­fore they close on it. They’re of­ten present for the in­spec­tion or at some other point be­fore clos­ing or be­fore con­tin­gency pe­ri­ods are up. “So if they end up see­ing the home in per­son, they still have an out.” Musiker says.

In a seller’s mar­ket, mak­ing an of­fer on a house you’ve never vis­ited may be nec­es­sary to stake your claim if you can’t get there in per­son. But there are other ways to stand out from the pack if you’re hunt­ing down your dream home in a hot area.

Waive some con­tin­gen­cies.

If you can find a way to do it, con­sider find­ing a way to re­lin­quish some of the stan­dard pro­tec­tions in the con­tract. For in­stance, get an in­spec­tion of the home be­fore sub­mit­ting the of­fer (or walk through with an in­spec­tor) so you can waive the in­spec­tion con­tin­gency.

Of­fer more earnest money.

An earnest money de­posit tends to be 1% to 3% of the of­fer price, but of­fer­ing more—5% to 10%--can make you stand out from the pack.

Have your mort­gage un­der­writer go fur­ther.

Mort­gage preap­proval is a ne­ces­sity in a fast-sell­ing hous­ing mar­ket, but look for a lender who will also fully un­der­write the loan in ad­vance. “Not ev­ery lender will do this,” Musiker says. “We’ve found that it’s usu­ally a lo­cal lender who is of­fer­ing this ser­vice.” Talk to your agent and find out if they’ve had any buy­ers who’ve done this re­cently and what lender was able to do this for them.

Sweeten the pot.

“We’ve had buy­ers of­fer to create a non­re­fund­able de­posit that guar­an­tees that you’re go­ing to close,” Musiker says. “And if you don’t close the deal, the sell­ers keep the cash. That gives the sell­ers a lit­tle ex­tra in­cen­tive and ex­tra as­sur­ance that this of­fer is solid.”

Pay at­ten­tion to of­fer dead­lines.

Some­times the first of­fer at the ask­ing price wins the home, and you can’t beat that if you aren’t first. But some home­own­ers ask for all of­fers by a par­tic­u­lar date and time and then eval­u­ate ev­ery­thing at once. If you wait un­til the end of the of­fer pe­riod, your agent may be able to find out more about the com­pe­ti­tion and the other of­fers that have come in. “They might know what might be needed to make your of­fer stand above the rest,” Musiker says. “And your of­fer will still be con­sid­ered even if it’s not the first one.”

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