Buying a House Out of State: What You Need to Know
If anyone has told you that buying a house out of state is just as easy as buying one around the block from where you live now there is little chance that they have actually tackled a long distance move in their life. It is not without its challenges. However, if you prepare properly, and know what mistakes to avoid, the entire moving experience can be a lot less painful than you are imagining. It might even be enjoyable! This guide will definitely come in handy.
Hire a Buyer’s Agent
Although you can look in an online directory, the best way to find a buyer’s agent is through a referral. Since you may not actually know anyone in your future destination this can be a little tricky. Websites where natural profiles are maintained by agents can be helpful. ActiveRain and Realtor.com are good examples.
If you are moving for a job, ask your future employer if they can recommend someone. They will likely be happy to ask around for you. You can also join Facebook swap groups for the new year. Other members of your new community may be more helpful than you think. Plus, this will give you an opportunity to also ask for recommendations for schools, doctors, yoga studios, daycare facilities, vets, etc.
A buyer’s agent will recommend lenders and obtain preapproval letters. They will call listing agents to check the availability of homes you are interested in, and they’ll email you listings that match your list of requirements. They also make appointments to view homes and drive you from one home to the next, if you fly in town to do some house shopping.
Research the Area
If you are trying to figure out how to buy a house out of state the most important thing to do is research the area that you are interested in. Quite often, there is a very fine line between an upscale neighborhood and one that is questionable with a higher crime rate that you will want to stay away from. You can change the features of a home, but you can’t do much about a neighborhood that you end up hating. Neighborhood recommendations can also be asked for in the Facebook swap groups you join.
If you have children then you may want to even pick a school district or specific school first and then explore neighborhoods in that area. You can also call the local police station and explain that you are buying a home out of state and trying to settle on an area. Someone should be happy to answer questions for you.
Create a Timeline
It does not matter if you need to move in one month or three months; there never seems to be enough time to fully prepare the way you want to. You do not want to be in a state of panic, realizing that you are out of time. Figure out your timeline. Not only do you need to know the day you have to move before; you should look at your schedule and decide when you can physically go look at some home. If you have a current home, you need to sell it should be figured into your timeline. Your realtor may be able to help you create your timeline, too.
Compare Your Options
Buying a house out of state had to have been a nightmare before all of today’s Internet sources were available. With the click of a mouse, you can access a seemingly endless supply of properties for sale with photos, videos, and detailed descriptions. It has never been easier to shop for a home, and you don’t even have to get off the sofa. This will allow you to compare all the details of the homes that catch your eye, so you can easily narrow down your options to a few that seem to be a better fit than others. Redfin and Zillow are great resources for home research.
You definitely do not want to only be prequalified for a loan for an out of state purchase. Preapproval is strongly recommended. Now, the tricky thing about applying for a mortgage in a new area is that if you are switching employers, you will show minimal time on the job. Sometimes, obtaining a contract or letter from an employer you already lined up will help. Obviously, credit and down payment will be factors, as well.
Keep in mind that your credit is affected by big financial changes. So, deciding to finance a new car or buy new furniture for the home ahead of time are big mistakes. You also need to make sure that you are not late making payments on anything. Make sure you have enough money to cover closing costs, insurance, taxes, moving expenses, etc.
Wire Transfer vs. Cashier’s Check
Since a lot of this process will be done over the phone or via email, you will need a way to get the money there. You may end up stumped on trying to decide whether to obtain a cashier’s check or send a wire transfer. Honestly, there are advantages and disadvantages to both.
- Cashier’s Check – This is obtained at your bank. You will need cash or enough money in your account to cover it. Some banks charge a small fee for this service. The biggest problem with wire transfers is that some banks require an advanced notice to withdrawal a large sum of money.
- Wire Transfer – In the past, money transfers were delivered via telegraph. Today, most wire transfers are sent electronically. These transfers are often done at only certain times of the day, so if you miss your transfer time, you may be stuck waiting for the next day, which can delay your process. The drawbacks are that numbers can be transposed, transfers can get lost, and someone may not be available to okay a large transfer when you need to send one.
In case you don’t know, you can’t use cash or credit card; not even for your down payment. Escrow offices and title companies cannot record deeds until they have cash on hand.
Mistakes to Avoid When Buying a Home Out of State
- Not getting familiar with the area.
- Buying without physically seeing the home or at least having someone you trust (hired or otherwise) view it.
- Neglecting to speak with an accountant or learn about tax laws.
- Failing to research the area ahead of time.
- Rushing into a purchase.
- Getting prequalified instead of preapproved.
- Not creating a timeline and long-term budget.
- Trying to attempt the purchase without a buyer’s agent.
- Neglecting to consider resale value.
Some people wondering how to buy a house out of state will assume that they have to physically make a trip there, but this is no longer the case. Depending on your lender, they may overnight you a very thick pile of paperwork. Others prefer to use a combination of snail mail and fax.
Getting educated is crucial. The more you know about the process the less likely anything will go wrong. Don’t be afraid to ask questions, and have an attorney look over any paperwork you don’t fully understand before you sign it. Buying a home out of state poses some challenges, but the process will be much smoother if you are as prepared as you possibly can be.
Planning your move? Keep in mind that it is essential to keep everything in balance. Buying a house out of state might not be the easiest process, but due diligence will pay off in the long run. The sooner you can cross off finding stellar moving services from your list, the better you will feel.