How to Buy a Home in Another State
Tips for Home Buying Out-of-State
If you plan to buy a home in another state, many buyers find the experience to be very stressful, especially if the buyers are unfamiliar with the area. An out-of-state buyer could be at a disadvantage because the buyer may not know the best neighborhoods, any of the real estate agents in town or the state laws. It can be frightening to embark on a new direction without a guidebook.
Best Defense for Home Buying in Another State
The smartest thing a buyer can do is to hire a buyer's agent.
Do not ask a listing agent for representation because the listing agent most likely represents the seller. The job of a listing agent is to sell that listing at the highest price and terms for the seller. Here are good reasons to hire a buyer's agent:
· A buyer's agent will represent the buyer's interests and not disclose the buyer's personal information without permission.
· A buyer's agent will form a fiduciary relationship with the buyer and negotiate on the buyer's behalf.
· The seller generally pays the buyer's agent.
· Buyer's agents often are neighborhood specialists.
· A buyer's agent can help guide a buyer to make the right decision.
Finding a Buyer's Agent in Another State
Many buyers are referred by family, friends or co-workers to a buyer's agent. A referral is the best way to find an agent. However, buyers who are relocating to a new area rarely have the luxury of building contacts quickly enough to trust a referral source.
Alternatives buyers can use to find an agent are:
· Internet Searches
By finding online listings of homes for sale, a buyer can quickly figure out which agents in certain neighborhoods list most of the homes. But that would mean those agents are likely to specialize in seller representation and not buyer representation.
Instead, run keyword searches such as "downtown denver buyer's agent" from a search engine. A buyer can also search Web sites where agents maintain national profiles such as activerain.com or realtor.com, in addition to finding exclusive buyer brokerages that specialize solely in buyer representation and do not take listings at all. Be careful with websites that allow agents to advertise for business, you might get a brand new agent.
· Open Houses
An agent hosting an open house may or may not be the listing agent. Buyers should ask. Open houses provide an excellent opportunity to interact with a buyer's agent and find out more about the agent. If a certain agent appears knowledgeable and the agent's and buyer's personalities mesh, ask for a business card. Then look up the agent's website for more information, paying close attention to how many homes that agent has sold. If a buyer can't find that information, there's probably a reason.
· Ask a Top Listing Agent for a Referral at a Competitor
Many listing agents never work with buyers but know the good agents at other companies who do. Some work with buyer's agents on their own team. These are agents who work under the listing agent, and that situation could possibly present a conflict of interest under dual agency.
By asking for the name of a competitor, the agent who refers a buyer to another agent might receive a referral fee from that competitor. That motivates the agent to refer an agent who will perform.
Looking at Homes to Buy in Another State
The buyer's real estate agent can daily email new listings and price reductions to the buyer directly from MLS. Many of these listings will contain a virtual tour and additional photographs. If the buyer is interested in more information, the buyer can email the agent. Most of the communication can be handled via email, phone or fax.
· A buyer can fly into town on a Friday night.
· On Saturday and Sunday, for example, the buyer's agent can show the buyer homes.
· If time is of the essence, a buyer can sign an offer electronically without ever leaving the state.
Closing Concurrently in Another State
If a buyer is selling an existing home to buy a home in another state, a simultaneous closing is very difficult, if not impossible, to orchestrate. The reason is most banks will not fund a loan for the home a buyer is buying in another state until the bank receives the HUD on the sale of the buyer's existing home.
· Buyer's existing home closes.
· Funds are wired to the closer handling the buyer's purchase, and a HUD is faxed.
· The buyer's lender funds.
· The buyer's new home purchase closes.
At the time of writing, Elizabeth Weintraub, Cal BRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.