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Buying a Home in a Different State - What You Need to Know

Couple with moving boxes | Buying a home in a different state

Tips for Buying a Home Out of State

Are you looking to buy a new home out of state? This can be a stressful process, especially if you don't know the area well.  If you're fortunate enough to be able to buy the new home without a mortgage, go for it. But if you are looking to get a mortgage for your new purchase, you might be surprised to learn that the loan may not be as easy to obtain out of state. Depending on the reason for your purchase, you might have a higher down payment or interest rate.

If you have decided you want to buy a house in another state, here are some helpful tips covering what you need to know.

1. Obtaining a Mortgage

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. Don't get discouraged; just know that things might take a little longer. The lender's decision to allow the out of state purchase may depend upon the reason for your purchase.  Make sure you have a well-thought-out decision, because if you say it would be fun to own a home in tropical Florida (while you're from Arizona), you will probably get denied. Don't be surprised if the bank or lending institution chooses to raise the down payment requirement or decides to charge a higher interest rate.

2. Internet Searches

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 to become familiar with the different agents who specialize in the local neighborhoods; it's not a bad idea to email a few of them. Most 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 key words (example: search "buyer's agent downtown Los Angeles" rather than "Real Estate Agent in LA").

3. Ask Around

If you have friends or family in that state, ask them to identify some good areas/neighborhoods, and areas that you likely want to avoid. Since you're unfamiliar with the area, you'll be at a slight disadvantage.

If you need help the best thing to do would be to hire 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 best 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 best interests.

Sometimes 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 the CRS (Certified Residential Specialist) or CRP (Certified Relocation Professional) designations which mean the agent has had considerable extra training.

4. Visit the State

Visiting the state is a must. Maybe you've been before for vacation or to visit family, but this is the best way to become familiar with the area.

While visiting, go to some open houses to get an idea on pricing and neighborhoods. Open houses are an excellent opportunity to meet and interact with buyer's agents and find out more about them. Open houses are sometimes held by the selling agent, but often are organized by the buying agent.  You might end up finding an awesome 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. Take a look at their website and check to see just how many homes they have closed on.

5. Closing Process - Initial Procedures

Once you find the house of your dreams, you will have to do a home inspection. If you don't have anyone who can help you with this, then you will have to fly out and see the property being inspected. If you can come out to witness only the inspection or the closing, it is recommended that you are on hand for the inspection to get an in-person understanding of the issues related to the property.  Many inspectors will readily 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 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 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, we're here to help...just click the button below!

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