According to Tracey Cecil-Simpson, a top agent with Semonin Realtors in Elizabethtown, the trend toward buying sight unseen is becoming more popular for various reasons.
That said, her advice to home buyers after successfully negotiating a sales contract is to make a trip to see the house.
“I encourage them to make the trip and visit the home during the home inspection,” Cecil-Simpson said.
What’s more, the entire transaction from the loan application, submitting the contract deposit, selecting the property, reviewing the home inspection, requesting needed repairs, setting up utility accounts and closing the transaction, all can be done remotely today. We do see more buyers conducting a closing remotely, according to Cecil-Simpson.
Although our most recent example turned out well, not all do.
It started with a prospective buyer for Hardin County who lived in Germany and the entire transaction was successfully completed remotely. While there were some inspection challenges along the way, this was the way we could get them the home they wanted and make sure it was ready for them when they arrived.
Some of the reasons a home buyer chooses the route of buying sight unseen might be:
1. They want to be ready to move into a home upon arrival.
2. They cannot make a house-hunting trip.
3. They have a very high trust relationship with a real estate agent or have a friend on the ground.
4. The market is so competitive that the time required for back and forth communication makes getting into a contract unlikely.
The last one is reality in the Hardin County Market, now in the second quarter of 2021. We currently have a housing shortage, and when a property comes on the market, multiple offers are submitted within hours and often at above asking price.
Homebuyers do not have the luxury of time on their side and sellers have maximum leverage.
These market conditions may not seem fair, but they are the reality of the local housing market.
Under these circumstances, the experience of relocating to the area to take specific jobs or military assignments may be a harrowing experience for families. The “sight unseen” buyer will have to continue to act fast to secure their home because of the minimal homes for sale,” Cecil-Simpson said.
What about renting a home sight unseen. Each property management office has its policy on how to handle this. Some don’t entertain the idea at all, some allow it if there is a close friend or family member to view the house for the potential renter and some just decide on a case-by-case basis.
The risk to the management company is if a potential renter rejects the house upon arrival and first sees it, the loss to the renter is relatively tiny. Still, the management company likely has left several robust rental applications and held the property off the market for a while.
In both the case of renting sight unseen and buying sight unseen, a customer can expect to sign a particular disclosure or contract addendum spelling out the potential downside of sight-unseen transactions and potentially significant upfront non-refundable deposits.
In summary, with the tools available to real estate agents and buyers today, virtually every aspect of a structure can be seen in photos, videos, inspection reports and Google Earth.
That said, a sight-unseen real estate transaction may be the best solution for the buyer who just can’t get in to see the house but has a skilled real estate agent guiding them through the entire process.
In a sight-unseen purchase, my biggest fear is, “Will the home meet their expectations?” Cecil-Simpson said.