Let’s say you’re moving far away because of a job, a new significant other, because you’ve always wanted to live somewhere that happens to be a long distance from your current location, or for any other reason at all. Maybe you’re caught in the middle of a hectic work or life situation that consumes every spare moment of your time. Or, imagine there’s a worldwide pandemic that forces you to shelter in place. Oh, wait…
What do the people who fall into one or more of these categories and who are trying to buy a home at the same time have in common? They all make great candidates for buying a house online.
You might follow up that notion with the question: “but is that really a thing?” — and we wouldn’t blame you. After all, buying a house is an elaborate, oftentimes laborious process, not to mention one of the biggest purchases you’ll ever make. The thought of buying a house online, without ever stepping foot in it until you move in, seems ludicrous.
But society has shifted and adapted to the fallout from the coronavirus, largely by digitizing as much as possible, including the real estate market.
The good news is, if you could benefit from buying a house online, you can absolutely do so. How to actually go about that is the tricky part, of course. In this guide, you’ll discover how to buy a house online, step by step, in a world where nothing is like it once was.
The pros and cons of buying a house online
It’s never been as easy or reliable to buy a house online than it is right now. There are infinite ways to do your own research on the internet from home, whether you’re perusing high-quality images and videos packaged by your real estate agent or investigating neighborhoods where you might want to live.
Plus, there are ways to complete every step along the way to purchasing your next (or your first!) house quickly and from the comfort of your current home.
Technology can substitute for in-person transactions and meetings, from walkthroughs to appraisals, inspections, and notarizations. It’s just never been fully utilized until 2020. The spread of COVID-19 accelerated the full activation of these digital tools. In addition to the online options for finding a top real estate agent in your area and digital communication platforms, new technology has proven instrumental in the home closing process. (More on that later.)
Beyond searching for homes on the regular market, you can even bid in online foreclosure auctions to find a great deal on a house. The bottom line is, there’s no shortage of online resources for completing a home purchase.
Now for the drawbacks to buying a house online.
The most obvious con of online home shopping is that you can’t physically be there to see the property for yourself. You can’t experience the tactile qualities of the home, like how hard the wood flooring is, the water pressure, or how well appliances work when testing them out.
This is why it’s critical to find the right experts and professionals to guide you through the process and trust them to deliver with your best interests in mind. Securing your real estate and mortgage network means you’ll have to do your homework.
To this point, Kim Davis, a top Brockton, Massachusetts-based real estate agent with 18 years’ experience, explains why an agent is your best shepherd through an online home purchase.
“It’s hard when buyers go online and start looking at properties. There’s so many variables, [like] whether or not they can buy that property, their loan program, if they’re doing FHA, will that property adhere to the guidelines,” she explains.
“I really think the first choice is to pick your agent. They know their local markets, they know the condition of the property, they know the locations, and they’ll be a valuable tool in the homebuying process and alleviate a lot of problems that can arise by searching on the Internet before you have established that relationship with the agent.”
Assembling a winning team
There are two major players you need on your team when buying a home: a mortgage lender and a real estate agent.
Once you recruit those essential pieces of the puzzle, the rest will fall into place. And yes, you can find them and work with them online.
The best way to obtain a mortgage efficiently, which is critical to a successful closing, is to get preapproved for one going into the real estate contract. You’ll want to contact a reputable loan officer or mortgage broker who can facilitate this process online for you and offer the best interest rate.
Get ahead of the preapproval game by collecting all the documents you’ll need to provide in advance so you can hit the ground running once you’ve selected which lender to contact.
The next step, which might just be the most crucial, is finding the right real estate agent. If that was important before, it’s pretty much imperative now. An effective agent will make up for not being able to visit the property and the neighborhood by accurately conveying all the details and features of the home for sale.
Because selecting an agent who can successfully lead you through a digital home purchase is key, some thorough vetting is in order. First, you want to make sure the agent specializes in the area where you want to buy; they should know it back and forth so they can best advise on the location of your future house.
Start by asking for referrals from people you trust. When narrowing down your options, look at reviews and community activity. Or, even better, let technology do the work for you and use a real estate agent matching tool with a stellar track record.
Once you have a few top contenders, interview at least three agents to find the right fit. Let them know exactly what you want and what you’re looking for, getting as specific as possible.
For example, some considerations when speaking to an agent include:
- What is your preferred method of communication and is the agent familiar with it?
- How experienced is the agent with remote home viewings and sales technology?
- How responsive can they be when you need quick answers, especially if you’re in a different time zone?
- Can they advise on the best mortgage lender to use for the remote sale?
You’re going to be in frequent contact throughout the entire process, so this is also an opportunity to gauge if your personalities click and what kind of feeling you get from this person.
When talking to your potential agent, have all your questions prepared that will help you make your decision. Finally, consider all the information you’ve compiled and hire the best agent that makes the most sense for you.
The search begins
You’ve landed on an agent after researching and interviewing. You’ve jumped one of the biggest hurdles! Now is the time to focus on the specifics of what type of home and neighborhood you want to live in.
- Do you want to be close to good public schools?
- Do you want a lot of land?
- A backyard?
- A pool?
- Would you prefer a condo in a building with a lot of amenities that is close to your office?
- Do you prefer peace and quiet, or proximity to a vibrant nightlife scene?
- Do you want convenient access to public transportation?
- Do you want to be close to parks?
- Would you rather live in a more family-populated neighborhood, or is that less of a priority?
- Do you want to be part of a Home Owners’ Association?
These (and more) are all important details for your agent to know before finding the best neighborhood that suits your preferences. You might also want to get a general feel for the neighborhood, its look, and its overall vibe.
To this end, you can ask your agent if they have any video tours of the neighborhood you could see or specific locations you could check out on Google Maps. For an even closer look, you could ask if your agent could take you on a physical tour of the neighborhood via Facetime.
This is where the real value of a local agent comes into play. An agent who is genuinely familiar with the different neighborhoods in the area where you’re searching will be your best resource, with the additional benefit of knowing about neighborhoods not previously on your radar. You might just find your dream house in a spot you never knew existed!
Apart from your real estate agent’s guidance, you can do your own research online by checking out what residents are saying about neighborhoods in Facebook groups and the NextDoor app.
Eye on the prize
Once you’ve settled on the neighborhood(s), house features, and amenities on your wishlist, it’s time to zero in on the properties that meet your criteria.
If your agent hasn’t set you up with access to your local MLS (multiple listing service) yet, that’s a good place to start. The site has filters for price range, location, property features, and more to fit within your parameters. There are options for receiving multiple search results once a day, or individual real-time results as soon as applicable homes land on the market.
Establish an understanding with your real estate agent regarding timelines, including how soon you plan to make an offer on a frontrunner. Some factors will be out of your control, like the current state of the market in your area.
When you spot a property from the MLS search or from what your agent brings to your attention that looks like a great match, let your agent know that you want to take a closer look. There are plenty of ways to learn about and virtually tour the houses that catch your eye. Online databases and actual, tangible books provide an abundance of history on any given property, from past title transfers to previous residents, whether the home is historic, and even if anyone has ever died in the home, among other information.
For touring a finalist, there are two ways your agent can show you the house: via a prerecorded video or a real-time virtual tour. Whether or not a video of the home is available, your agent should virtually walk you through the property with no one else present (including the seller or the listing agent) at least once using their digital tool of choice.
Mabél Guzmán, the National Association of Realtors’ VP of Association Affairs, offers her top three tips for virtual home tours during the online homebuying process.
The first is for the client and the real estate agent to agree on what platform or app is best to use, be that FaceTime, Zoom, or something different.
The second is for the agent to accurately and effectively convey the size of the property, including the spaciousness of individual rooms, how tall the ceilings are, how big the closets are, and so on.
The last tip is to conduct a debriefing immediately following the virtual tour to discuss the property that was just shown.
Buyers should make sure they ask a lot of questions during and after the tour, including anything they wouldn’t know without physically being there. Ask about any smells, sounds, and the general feeling in and around the home.
Prepare a checklist of questions for during and after the virtual home tour. You’re relying on your agent to be your eyes and ears, so be as specific as possible.
One major perk of virtual home tours is they’re super efficient and cut out the time it takes traveling to and from the property to see it. You could easily see several properties in one day from your living room. Your agent will need a strong internet connection, proper lighting, and high video quality when conducting a virtual tour for the best representation of the home as possible.
Closing in on the target
So by this time, you’ve selected your real estate agent, picked out the area where you want to live, toured homes that look like candidates, and done your research on the finalists. It’s time to make an offer!
Doing this electronically is no big deal since that’s typically how it’s done anyway. Your agent will email the listing agent your offer and any contingencies you’re requesting in the contract. After the seller accepts your offer, you can wire your earnest money deposit to a title company or escrow account throughout the closing process.
Speaking of the closing process, what follows are the biggest steps to take along the way in your online escapades to owning your next home.
Depending on the current ordinances in place in your area and the seller’s wishes, your agent may be able to join the inspector for the inspection. If that’s the case, they can take a video recording of the inspection, or you can ask the inspector to shoot a video for you.
Either way, the inspector should provide a thorough report of all findings following the inspection. If willing, they can also discuss the inspection with you and answer any questions you might have over the phone afterward — or, better yet, via video chat during the inspection itself.
If the inspection reveals any significant repairs needed, those will have to be negotiated with the seller through your agent.
It’s rare for a buyer to accompany an appraiser under any circumstances, and some appraisers were doing drive-by or desktop appraisals to comply with COVID-19 safety regulations, which might become more frequent in the future. The appraiser will email you a full appraisal report once it’s completed.
Once again, it’s common to accomplish this closing requirement online, anyway. Results from the title search and any additional documents requested, such as a land survey, can be emailed to you.
After executing everything necessary to complete the transaction — securing the mortgage, negotiating repairs, finishing the title search — you can move to the final walkthrough and the culminating step: closing.
With an online purchase, your real estate agent will do the final walkthrough for you, checking that all plumbing and electrical systems function properly, the seller is fully moved out, and the house is clean and move-in ready. Like with an inspection, you can ask your agent to walk through with you via a video call if you like.
Now for the moment you’ve all been waiting for: closing time! With the need for more digital functionality have come helpful technological advancements in the real estate world. While not every state allows remote online notarization (RON) yet, more and more states are approving bills to facilitate RON. Where that’s not available, ask your agent to help you arrange for an in-home notary visit to sign the closing documents, and then you will mail the forms to the title company.
And there you have it! Once you’ve closed on your house, your agent will have your key ready to pick up.
While it takes getting used to and requires some unusual tactics, buying a house totally online is absolutely possible, if not always preferable, in our changing world. The trick is having the human teammates working in tandem with the digital players.
“We do so much thorough upfront work. Even when you do WhatsApp or Zoom, or any of those — you’re in the property, you’re videoing the whole thing. You have the ability to save the video. The home inspectors are in there,” Davis explains.
So as the buyer, you can be confident that you won’t just have to take the word of your agent. “All the tools have been used accordingly for them to be comfortable and know what they’re getting.”
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