Just 20 years ago, the idea of buying a house without stepping inside it first seemed crazy. But, thanks to technology (and, more recently the COVID-influenced surge of buying interest), buying a home sight unseen has dramatically increased. In fact, in the early months of 2020, 25% of real estate professionals stated their clients had put contracts on homes without physically seeing the property. More recently, a Homes.com survey of over 1,500 visitors found that 42% of buyers are willing to buy a home sight unseen, or at least consider doing so.
Real estate professionals have adapted by offering virtual tours, 3D photos, drone videography, and other digital tools that give buyers the opportunity to virtually see the home if they can’t do it physically. But, even though sight unseen purchases are becoming more mainstream, can technology really replace the value of stepping foot in a home before buying? Here’s what to keep in mind.
What You Can’t See Can Hurt You
Agents always want to market properties in the best light; high resolution photography, professional grade videography, crisp aerials and drone photography are among many of the tools in their marketing tool chests. And while all those tools provide a great overall picture of a property, there are things they just can’t capture. For example, if the home has foundation issues and the floors are sloped, it might not be evident in the photography. The pictures and videos may look amazing, but if the home reeks of cigarette smoke, there’s no scratch-n-sniff photo option to clue you in.
How To Prevent Surprises
Thirty-eight percent of the Homes.com survey respondents stated that buying a home sight unseen is risky because of the potential cost of repairs — and they aren’t wrong. If you’re in a situation where you plan to purchase sight unseen, it’s crucial you have an agent working diligently on your behalf. That includes conveying their opinions, perceptions, and knowledge of the property, and negotiating a contract to give you the most protection. A buyer’s agent in this market should be willing to do a FaceTime or Zoom tour with clients to show what’s beneath the surface—for example, if the front door doesn’t close properly or any water damage underneath the kitchen sink.
But preventing surprises goes well beyond your agent giving you a Zoom tour. Buyers, whether virtual or not, have a role to play in protecting their interests. This includes hiring a professional home inspector, requesting and reviewing property disclosures, and doing adequate due diligence on all aspects of the home’s condition. Buyers also have the right to gather bids for repairs during an inspection period.
How To Protect Yourself
There’s no question buying a home sight unseen can be a risky endeavor, but there are ways buyers can protect themselves from buying into a headache. If you plan to buy sight unseen, it’s important to remember these protections:
- Appraisal Protections – Not only does this protect you financially, but appraisers can also identify and require repairs that may be a safety hazard.
- Home Warranties – Even if you get a home inspection, a home warranty can give buyers peace of mind if something goes wrong in the future.
- Inspection Contingency – Of survey respondents who believed buying sight unseen was too risky, having an inspection contingency was their most cited incentive to consider it a viable option. And here’s why: an inspection contingency can provide buyers with an out in the contract if they discover substantial problems with the home.
While these are just some of the ways to protect yourself during a sight unseen purchase, it’s certainly not an exhaustive list. And no matter the protections in place, nothing can replace having your eyes on the home before you write the check. But, as the real estate industry changes, sight unseen purchases will continue to grow in popularity. Regardless of the current intense seller’s market, remember to always protect your interests to avoid buying someone else’s headache!
For more insights on the homebuying process from start to finish, be sure to visit the Homes.com “How to Buy” section!