In 2020, 63% of all homebuyers made an offer on a house without seeing the property — a sharp increase from 32% a year earlier. It’s an occurrence driven by the pandemic restrictions and technology as real estate agents stepped up their virtual game. Even as restrictions are being lifted, the phenomenon of making an offer on a house sight unseen appears to be here to stay.
Can you buy a house without seeing it?
With a price tag that comes with many zeros behind, it’s a risky move to put in an offer before visiting the home in person. However, buying a house sight unseen isn’t unusual. This type of purchase is more common with multifamily properties, duplexes, triplexes, single-family rental units, investment homes, or even a second home in a different location.
While the pandemic has sped up the adoption of homebuying tech, this phenomenon is also defined by the generational characteristics of buyers in the market.
For example, millennials are now entering their prime homebuying years. According to the National Association of Realtors (NAR), millennials now make up 43% of all homebuyers in 2022.
Buying a house would be as easy as online shopping for other goods in an ideal world. But here’s the apparent catch: it doesn’t come with a return policy.
Yet, homebuyers still choose to purchase a home before seeing the property in person. Why?
Demand surge, tech, and location independence
Every generation has collective characteristics. For millennials, it mainly revolves around:
Demand surge
The real estate industry is no longer like before. Inventory of houses for sale was excruciating low last year as properties went off the market faster than before.
Homebuyers had to navigate through bidding wars on the purchase price in a short period. Thus edging them towards taking unprecedented risks of making an offer without having toured the property.
Digital savviness
Millennials are the first generation to grow up in the internet age. They are digitally savvy and typically seek information through online searches before taking the next possible steps.
In other words, millennials rely on technology to help them achieve their goals — including buying a home.
According to a 2021 Zillow survey, approximately 40% of millennials were comfortable buying a home online, and almost 60% would buy a home after getting a virtual tour.
Live video tours, drone footages, and satellite imagery complemented by high-quality photos and floor plans give prospective buyers the sense that they’ve fully experienced the property.
Location independence
With remote and hybrid work being the new normal, the location of one’s home is no longer dependent on their job. Many homebuyers are seeking to move to a less expensive locale to offset rising housing costs.
A matter of trust: Your buyers need these before putting in an offer
The surge in buying a house sight unseen supercharged the real estate market during the height of the pandemic. However, with rising interest rates and restrictions being lifted, we’re also beginning to see less of a blind offer on a home. Most buyers, especially first-timers, still want to experience the property before making a final call.
Regardless, thorough research and a good understanding of the local housing market are vital to buying a property — especially when purchasing a home sight unseen. Here are the 5 main things your buyers need before putting in an offer:
A trusted real estate agent
Trust is the name of the game when purchasing a home before seeing it. When buying a home sight unseen, someone the buyer trusts should see the house and the area around it before they make an offer. It could be a friend, family member, an inspector, or a real estate agent.
Build rapport with your prospects from the get-go by striving to learn more about their goals, fears, and needs during the home buying process.
As mentioned earlier, millennials rely heavily on technology to help them achieve their goals. It typically starts with an online search for potentially available homes for sale.
Providing thorough information about the property enables them to take the following steps without searching elsewhere.
For example:
- Accurate description of the home
- Description of the neighborhood
- An honest evaluation of the home upon site visit
- Undistorted photos of the interior taken by a professional
- Floor plans
Access to virtual tours of the property
It’s crucial that your buyers get to view the property themselves through a video tour, even if they are not physically present. Some real estate agents like Ken O’ Boyle from Weichert, Realtors® – Foothills work with relocation companies to help home buyers find their potential new homes before moving to a new place.
If buyers don’t get a chance to see the house in person before making an offer, arrange a video call to allow them to ask questions in real-time about things they couldn’t discern from the photos.
A good home inspection
Home inspections are costly. Many potential buyers may also opt to forgo inspections to move deals along sooner.
However, it is worth having a licensed home inspector look through the space to avoid issues that can end up even costlier later on when the seller accepts the offer. For example, a leaky roof or a family of raccoons living in the attic.
It is your responsibility to protect your client and ensure they walk away from a potentially bad situation rather than put themselves in one. Want to go the extra mile? Recommend a trusted licensed home inspector to complete the job for them. Your buyers will thank you for it.
Recommendations on other listings
A good understanding of the local housing market is crucial when purchasing a home. Home buyers who purchase sight unseen rely on your knowledge and expertise to make an informed decision. For some, it may even be the biggest purchase of their lives. There is indeed a lot resting on your shoulders.
Remember, trust is the name of the game. Prepare a few other recommendations on other listings based on their must-haves, needs, nice-to-haves, and wants in case the home they laid eyes on online doesn’t meet their expectations. Below is a clear example of how a successful purchase of a house sight unseen should go:
Source: First-time buyer, National Association of Realtors
Conclusion
The phenomenon of buying a home sight unseen is still here to stay. While the pandemic has driven the adoption of home buying technology, this purchasing behavior is primarily spurred by the generational characteristics of most buyers entering their prime home-buying years in the market — millennials.
That’s not to say that this will become the norm. Technology is never about replacing a process. Instead, it is to enhance existing ones, so buyers have more options and access to properties, especially when relocating to a new locale.
Home buyers will still want to visit the property before putting in an offer. After all, it is a significant investment, especially for first-time buyers. Buying an unseen property is perhaps more suited for other property types such as multifamily properties, duplexes, triplexes, single-family rental units, holiday homes, and investment homes.
Should a buyer decide to make an offer sight unseen, make sure they have:
- A trusted real estate agent
- Access to virtual tour and floor plan of the property
- A good home inspection
- Recommendations on other listings
Remember, trust is the name of the game. Provide buyers with everything they need to make a successful purchase — especially when it’s sight unseen.
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