Tips For Buying A House Out Of State

Thinking of buying a house out of state? You’ll be in good company, with millions of families and working professionals now contemplating a move or the prospect of picking up an investment or vacation property.

If you’re thinking of buying a house in another state, it’s doable, provided you do a little homework in advance and don’t mind making a few calls. Down below, you’ll find several expert tips for buying a house out of state, and a closer look at what it takes to both make an offer and ultimately seal the deal.

As alluded above, anyone thinking of buying a house in another state will find themselves in fine shape, as it’s 100% possible, even if you don’t work in the state where you plan to move. Of course, you’ll have to meet your lender’s requirements for credit score, income and debt-to-income ratio, among other things.

In order to buy a house in another state, you’ll want to follow the below hints and steps.

Note that the process will look slightly different for each prospective home buyer depending on your situation. However, these guidelines will – as a general rule – serve you well in your quest to pick up a single-family home, multifamily residence, condo or other new (and remote) real estate holding.

1. Create A Plan

The first step that you should take when buying a house out of state is to create a financial and strategic game plan that best suits your needs. Likewise, you’ll also want to consider what you should do about your current home. Do you want to rent it out? Hang onto it? Sell it off?

You’ll also need to decide where you or your family would like to live. Consider what areas of the country, amenities and activities are most important to you. For example, are you looking for somewhere with great schools, stunning scenic backdrops or easily accessible hiking trails?

Your plan should consider the financial aspects of your move as well. You’ll want to consider how much home you can afford, how high a monthly mortgage payment you can make and how your income might sink or rise (and affect these calculations) in the future. Obviously, there will be numerous financial items to take into consideration as well, including but not limited to saving for a down payment, purchasing homeowners insurance, considering if you’re open to paying HOA fees, etc.

2. Research The Area And Cost Of Living

One of the next steps you’ll want to take is to research different areas of the nation and compare costs of living. In addition to getting a better sense of home prices, interest rates and monthly payments for any given area, you’ll also want to study up on what it costs for food, transportation, utilities, property taxes, medical care and other common expenses.

Naturally, popular areas of the country such as big cities (like New York and Los Angeles) tend to be more expensive to live in than rural locales. Likewise, leisurely escapes with seaside views or easy access to parks and wide open spaces often tend to command a premium at market as well. In other words, when thinking about where to live, don’t just research and get to know what baseline costs may look like to own property there. Also make a point to consider how your other daily and monthly expenses may grow or shrink before making any moves.

3. Find A Real Estate Agent

One of the most important steps when house hunting in another state is to connect with a local real estate agent or REALTOR^® in the city that you’re interested in. After all, outside of folks who grew up there, few people will know the area, its characteristics and emerging local trends quite as well as a real estate professional who’s on-site and well-versed in the particulars of the locale.

As a starting point, try to get some recommendations from family and friends, check with local listing websites and skim through online reviews to get a sense of who’s got a solid and trusted footprint in the area. But remember, you’ll want to speak with a minimum of three or four professionals to see who best suits your personality and working approach. Whomever you choose, they can prove an invaluable resource, and will serve as your eyes, ears and boots on the ground in case you need remote assistance or a remote viewing.

4. Get Your Mortgage Preapproval

Before you go house hunting, you’ll want to get preapproved for a mortgage to let home sellers know you’re credible and serious. Similarly, you’ll also want to speak with your lender and consult your budget calculations to get a better sense of just how high of a mortgage and mortgage payment you can comfortably afford. To this extent, you’ll want to research different mortgage lenders in your new city to compare rates. After all, no two mortgage lenders offer the same terms and conditions, making it a good idea to shop around for different mortgage types and offers.

5. Ask Your Agent For Virtual Tours

After you’ve found a reputable agent whose working method best gels with yours, ask them to help you locate and virtually tour different housing options. Your real estate agent can help you in your search for properties by speaking with brokers, connecting with other agents and checking online listings.

Your agent can also help you get a firsthand view of properties, whether that means accessing virtual touring options that are already available online of the property, or physically swinging by a home to take videos or pictures. Helpfully, many smartphones now offer real-time video conferencing options, meaning that oftentimes your REALTOR^® can simply phone you and give you a 3D view on-demand.

6. Visit The City And Potential Homes

Of course, there’s no substitute for an actual in-person visit on-site – not only to get a better feel for any property that you’re considering buying, but also the general area. On the one hand, this might entail driving by and getting a good look at different neighborhoods and potential homes that you’ve seen on virtual tours. On the other, it could mean swinging by different areas of town at different times of day or night to get a better sense of traffic patterns, dining and entertainment options and how comfortable or walkable a specific area of town feels.

Also be sure to map out and keep a close eye out for grocery stores, pharmacies, shopping centers and other destinations that you might frequently visit to get a sense of how conveniently located they are.

7. Make An Offer

Once you’ve picked a home that you want to purchase, you’ll need to make an offer on the house. But in addition to considering how much money you’re willing to spend, you’ll also need to consider how long you’ll have until closing, and any terms or conditions that your offer will be made under.

Note that customs in certain areas of the country surrounding offers may differ. For example, in areas where properties move on and off the market more slowly, you may be able to work in inspection clauses and contingencies. But in areas of the country where the real estate market is booming, you may need to reconsider certain ones. Again, your real estate agent can help you get a better sense of common practice for your area.

8. Get A Home Inspection And Appraisal

Once your offer is accepted, getting a home inspection done is important, as it can help you uncover current or impending flaws or issues with the property – issues or flaws that you may be able to get the seller to address. Likewise, having a home appraisal done, which provides a snapshot of the property’s value, will be necessary to help reassure your financial lender that they’re not lending more than the property is worth. Both a home appraisal and inspection should be conducted prior to closing on the home.

9. Close On Your New Home

As part of your home offer, you’ll also agree on a closing date for the sale of the property, at which time ownership of the residence transfers from the seller to the buyer. However, in order to close, several things will need to happen in a timely manner.

During the period from when an offer on a home is accepted until closing, it’s important to work with your REALTOR^®, mortgage broker, title company and any other parties involved in the transaction to make sure all outstanding questions are answered, documents filed and legal requirements met. On the bright side, some states don’t even require you to be there in person to sign papers the day of closing, and will let you attend your closing remotely.

10. Create A Move-In Checklist

Finally, don’t forget to make a move-in checklist of other miscellaneous tasks that need to be completed before moving to another state. For example, perhaps you’ll need to hire movers, file a change of address with the post office, contact your utility companies and register to vote in your new state. In addition, you’ll probably want to give the cable and internet company, and any furniture delivery stores necessary, a shout as well.

Buying a house out of state takes a little more legwork but isn’t generally that much more difficult in theory than buying a house that’s located in-state. Naturally, it takes a little more planning and coordination to manage, especially if you’re starting from scratch remotely and need to hire a representative in the form of a local REALTOR^® to be on-site.

However, as with buying any home in your current state of residence, it’s largely a process of doing your research, budgeting your finances and planning to make the acquisition. If you’re ready to begin the home buying process, apply for your initial mortgage approval today with Rocket Mortgage^®.