High-end homes are even more likely to get blind offers
Believe it or not, almost one-fifth of home buyers aren’t visiting the homes they are buying.
Nineteen percent of people who bought a home in the past year made a bid on a home before seeing it in person, according to a new survey commissioned by Redfin.
SurveyMonkey Audience conducted the survey of more than 2,000 people who bought or sold a home in the past year.
Buyers of high-end homes were almost twice as likely to have made an offer on a home sight unseen. Among people who bought homes for more than $750,000, 39 percent made an offer without seeing a home in person.
Joseph Kelly, president of ArcLoan, believes market pressures may be driving the sight unseen trend.
“I do believe that in many parts of the country it is very much a sellers market. The increase in buyer competition would certainly lend to buyers being willing to take a more aggressive risk during the purchase/contract stage in order to lock in a good buy,” Kelly says.
Overseas and out-of-state buyers may be helping to drive the sight unseen trend as well, according to Redfin.
Kelly also cautioned that “sight unseen” buyers should make sure they have a way out of their contracts if need be.
“From real estate and mortgage perspective, I would comment that any decent buyer agent will have legal language in the contract to protect them with a ‘way out’ of the contract. Typically, this would be through home inspection or financing contingency,” Kelly explains.
“Of course from a financing perspective, lenders don’t care if a buyer has personally seen the property, nor would that issue affect the approval of a loan in any way. The mortgage approval will include a satisfactory appraisal, which warrants both the condition and market value of a property.”
Because of the risks of buying without visiting a property in person, Redfin recommends the following tips for home buyers making offers on homes or condos sight unseen:
- Hire a real estate agent whom you trust and with whom you communicate well.
- Have a trusted friend or family member see the home for you, if possible.
- Ask your agent to point out aspects and features of the home that aren’t easily captured in photographs.
- Include inspection and other contingencies in your offer to the seller.