Buying a Home in a Different State - What You Need to Know
Tips for Buying a Home Out of State in 2020
Interested in buying a home out of state? This can be a challenging process, especially if you don't know the area well. As more employees are working from home and moving into more affordable housing markets, relocating is becoming a real possibility.
If you’re looking to get a mortgage for your new purchase, you should know how you can make the move easier. Here are some helpful tips for what you may need to know.
1. Be Prepared for a Longer Timeline
Obtaining a home loan out of state may not be as easy as it would be if you were purchasing a home in the same state as your current home. However, there’s no need to get discouraged—just know that things might take a little longer.
2. Work with the Right Real Estate Agent for You
When buying a home in another state, it's essential to do your research. Go online and read about different cities and neighborhoods. Search online listings of homes as well as for an experienced Real Estate Agent who specializes in the local neighborhoods. Once you reach out to them, most Real Estate Agents will send you listings each week so you know when new houses hit the market. When searching online, make sure you are specific with your keywords. For instance, search "buyer's agent downtown Los Angeles" rather than "Real Estate Agent in LA".
3. Ask Friends and Family Their Thoughts
If you have friends or family in the state you’re thinking of moving to, ask them to identify some areas/neighborhoods that meet your criteria. Since you're unfamiliar with the area, you'll be at a slight disadvantage.
If you need additional help, you may want to consider hiring a buyer's Real Estate Agent. They are often neighborhood specialists and will make sure they find what you are looking for. A buyer’s agent works in the interests of the buyer and will not disclose their personal information without authorization, but rather negotiate on the buyer’s behalf. Do not ask for a listing agent because they most likely represent the seller and will be working in the seller's interests. Some home loan agents have deep familiarity with the real estate community and may be able to recommend you to reputable Real Estate Agent.
Begin the vetting process with personal referrals and be on the lookout for a Certified Residential Specialist (CRS) or a Certified Relocation Professional (CRP)—designations which mean the agent has had considerable extra training.
4. Visit the State/Area You’re Interested in Moving to
Visiting the state is also helpful in your out-of-state homebuying search. Maybe you've already been to the area before for vacation or to visit family. However, this is still a great way to become familiar with the area.
Open houses (when available) provide a better idea about pricing and neighborhoods. They are an excellent opportunity to meet and interact with buyer's agents and learn more about what the owner’s expectations are for the sale. Open houses are sometimes held by the selling agent, but often are organized by the buying agent. You might end up finding a helpful buyer's agent who will be able to help you continue your search.
If you connect with the agent, you can get their info and ask them if they have any more properties that meet your criteria. Check out their website and see just how many homes they have closed on.
5. Try to Be There for the Home Inspection
Once you find the house of your dreams, you will need to have a home inspection. Who ultimately attends a home inspection is dependent upon the state guidelines in which the inspection takes place. However, being present at the home inspection provides the buyer the perfect opportunity to ask the inspector questions about the home’s different systems, as well as other issues related to the property. Many inspectors are willing to instruct new homeowners in home maintenance and point out relatively minor issues that ought to be fixed even if they won’t affect the sale.
After the inspection, an appraiser will inspect the home to make sure it is worth as much or more than the purchase price. From here, the procedures will be the same as if you were buying a house in your home state: the buyer must organize the paperwork, secure the insurance coverage, the title, and the mortgage or loan. During closing, funds can be wired to the closing attorney or title insurance company in the destination state.
If you have questions or would like more details on how to begin the process of buying a home in another state, New American Funding can help. To learn more, click on the button below.