How to Buy a House out of State

Image shows a queer couple shaking hands with a buyer's agent. Text reads: "Why hire a buyer's agent to relocate? A buyer's agent is highly recommended—they can negotiate on your behalf and serve as a resource on the neighborhood; A referral is the best way to find a buyer's agent, but you can also find one on your own. Try keyword searches like "[city] buyer's agent" and websites like Realtor.com; look for exclusive buyer brokerages that specialize solely in buyer representation and don't take listings at all"

Image by Brianna Gilmartin © The Balance 2020

Most people find the experience of buying a home in another state to be particularly stressful, especially when they're not familiar with the new area. Out-of-state buyers can be at a disadvantage because they probably don't know the best neighborhoods, school districts, local and state laws—or anything else, for that matter.

If you're facing this challenge, you have a few options for getting help.

Look for a Buyer's Agent

The smartest thing a buyer can do is hire a buyer's agent in the new state. Don't ask a listing agent for representation—they most likely represent a seller. A listing agent's job is to sell a particular listing at the highest price and at the best terms for the seller. This can conflict with your best interests.

Buyers' agents represent the buyer's interests. They won't disclose a buyer's personal information without permission. They form a fiduciary relationship with their buyers—a legally binding commitment to act in their clients' financial interests—and negotiate on their behalf.

Many buyers are referred to an agent by family, friends, or co-workers. A referral is the best way to find an agent, but buyers who are relocating to a new area rarely have the luxury of building contacts quickly enough to trust a referral source. You might need some alternatives.

A buyer's agent is critical for your home search. These agents are often neighborhood specialists and they can help guide you in making the right decisions for your particular needs.

Enlist a Specialist

Yes, there's such a thing as a relocation specialist. You can hand off your agent search to a specialist, and most of these folks will even go the extra mile, helping you with moving details when the time comes.

Your employer might even arrange a specialist for you if you're relocating due to a transfer. Otherwise, do an internet search for "relocation specialist" or "relocation expert" and the appropriate city or ZIP code and see what you find.

How to Find a Buyer's Agent on Your Own

Find online listings of homes for sale in your target area. You can quickly figure out which agents list most of the homes in certain neighborhoods. Yes, this means that they likely specialize in seller representation, but identifying them will at least let you rule these agents out.

Run keyword searches such as "downtown Denver buyer's agent." Look for exclusive buyer brokerages that specialize solely in buyer representation and don't take listings at all.

You can also search websites where agents maintain national profiles, such as Active Rain or Realtor.com. But be careful with websites that allow agents to advertise for business. You might end up with a brand new agent. That's not always bad, but it's especially helpful to work with someone experienced when you're relocating.

Attend Open Houses

Although the agent hosting an open house is often the listing agent, buyers' agents often visit open houses as they scout out potential properties for their clients. Keep alert for anyone who appears professional and who seems to know the hosting agent rather than the mom with two kids in tow. All you have to do is ask, "Are you an agent?"

Ask for a business card if the agent appears knowledgeable and your personalities seem to mesh, then look up the agent's website for more information. Pay close attention to how many home purchases that agent has closed. If you can't find that information, there's probably a reason.

Ask for Referrals

Many listing agents never work with buyers, but they do know good agents at other companies who do. Some work with buyer's agents on their own teams.

Sometimes an agent who refers a buyer to another agent might receive a referral fee. This can motivate a listing agent to help you out. Again, there's no harm in asking.

Look at Homes

A buyer's real estate agent can email you new listings and price reductions daily from the multiple listings service (MLS). Many of these listings will include virtual tours and additional photographs. You can easily ask for more information regarding any you might be interested in, then fly into town on a Friday night and see the homes on Saturday and Sunday.

If you are ready to make an offer from a distance, it's incredibly easy to do these days. Buyers can now sign offers electronically without ever leaving their homes.

How to Close Concurrently in Another State

A simultaneous closing is very difficult—if not impossible—to orchestrate if a buyer is selling an existing home to buy one in another state. Most banks won't fund a loan for the home a buyer is purchasing until the bank receives documentation confirming the sale of the buyer's existing home.

It usually ends up happening this way:

  1. The buyer's existing home closes.
  2. Funds are wired to the closer handling the buyer's purchase and documentation is faxed.
  3. The buyer's lender funds.
  4. The buyer's new home purchase closes.

Perfectly timing both closes, especially at a distance, can be tricky, but it's possible. Communicate closely with both of your agents throughout the process to ensure everything goes smoothly.

Article Sources

  1. American Home Agents. "Buyer’s Agent vs. Selling Agent vs. Listing Agent." Accessed June 22, 2020.

  2. National Associational of Realtors. "Fiduciary Duties." Accessed June 22, 2020.

  3. Investing in Communities. "What Every Real Estate Client Should Know About Real Estate Referral Fees." Accessed June 22, 2020.

  4. Mylene Merlo. "Concurrent Closing – Selling and Buying a Home at the Same Time." Accessed June 22, 2020.