Tips & Advice

Would you buy a house sight unseen?

Before you make a significant financial decision such as buying a house sight unseen, you need to weigh the pros and cons
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Have you ever thought you found your dream home after just one glance? Same. The first time I saw pictures of our home online, I was ready to buy the house sight unseen.

Just two weeks later, the manifestation of my dreams pulled through: We found out we’d need to move seven hours south, from Fort McMurray, AB to Calgary, AB. The time frame? Just one month. Suddenly, that far off the possibility of buying that dream home became a very real and distinct option. However, to make it happen we needed to start the process of buying a home as soon as possible.

We emailed our real estate agent that night; four days later, we put an offer in on that very same home, sight unseen. Although this sounds a little crazy (okay, a lot crazy), we’re not the only ones who’ve bought a home this way.

Online house hunting is a popular trend among all homebuyers. The National Association of Realtors® released a report in 2017, which claimed an overwhelming 95% of buyers search for their future home online. 

Years ago, these online home shoppers were trekking through local open houses — an old-fashioned attempt to get that visual impression that’s so necessary when selecting a neighbourhood and purchasing a home. I have to say, I’m grateful that this is no longer the go-to process. Now, with one click, you can find property details, photos, videos, virtual tours and detailed information about the neighbourhood – all while in your pyjamas.

But online shopping doesn’t mean that most people are buying a home, sight unseen, through an Internet search. While it’s still very uncommon for people to buy a property without doing a walkthrough first, it’s not unheard of in today’s connected marketplace. Gord Ross, Zolo real estate agent, estimates that he does two to three online transactions each year. That’s two to three sales where the buyer doesn’t step foot into the home before putting in an offer. 

Perhaps the reason why purchasing a home online (rather than just viewing the home online) hasn’t really become popular is because there’s a risk associated with buying a large asset, sight unseen. Still, there are times when big decisions have to be made based on 21 tiny MLS photos. To make the most of the situation, consider these tips.

What are the risks of buying a house online?

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In one of the most significant financial purchases you’ll ever make, it’s essential to analyze the entire property before you jump in and make an offer. If you’re forced (or choose) to assess the property strictly sight unseen, then the process of doing your due diligence may become quite onerous. Not seeing the home in person also means there is a chance you could miss something significant, and you might miss out on a chance to get a feel for whether or not the home is a good fit for you. 

Photos don’t always tell the entire story – but neither does staging

One of the most significant benefits to buying a home online is the ability to view the property through photos or video footage, including a FaceTime tour. Like staging, photos only show one angle, and you aren’t able to get in and move things around yourself. When you view a home in person, you can be thorough. 

During your personalized virtual tour, have your real estate agent show you every aspect of the home. Have them turn on the taps, flush toilets, open closet doors and take a good hard look at all of the appliances and landscaping. It’s also a good idea for the agent to take photos and videos that weren’t available on the listing for you to go back and look at later. When you don’t get the chance to see the home in person, it’s nice to have those as reminders.

If you buy a home online, there are no return policies. You need someone to view the property in person for you – whether it be a trusted real estate agent or family member. Do you believe that this person knows what’s important to you? “You want to make sure they aren’t just looking at what they’d like,” says Ross. 

Don’t expect to save money by not travelling to view a property

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When it comes to buying a home online, the typical reasons for doing so are time and distance. The primary reason for buying a home from just online visits is because you don’t live in the city where you want to buy. Ross estimates that most of his “sight-unseen” buyers are people who live out of the area who do not have the budget to travel back and forth for open houses or property viewings. 

While saving money by buying online would normally be considered prudent, that might not be the case when it comes to purchasing a home. Unlike vehicles, each home has a unique flavour and its own flare — you just can’t walk up the street to the next Realtor to buy virtually the same house, says Ross. For that reason, the concept of saving money on travel shouldn’t lead your decision on whether or not to purchase a home strictly through online investigation. 

Instead, consider whether or not you are emotionally comfortable with this type of purchase and consider how tolerant you are of risks. Think about how you handle life’s unexpected shocks. If you’re a relatively risk-averse person, buying a house online is probably not the right step, even if it does meet your “money-saving” criteria. 

Aside from travel costs, you won’t be saving much else. When you buy in another city or province, you still need a lawyer or notary to process the purchase and sale documents. Therefore, you may actually end up paying more in legal fees since many jurisdictions will require notarized copies of legal documents and contracts, and this requires you finding a legal representative in your current city and, potentially, in the city you are moving to. 

But these added steps and costs shouldn’t deter you if buying a house sight unseen is the right choice for you. It’s not like this extra cost is going to break the bank. 

In our situation, the added costs that we incurred still made our decision worthwhile. Buying a house sight-unseen cost us an additional $462 to prepare the notarized documents out of the city and $1,500 on a moving truck and travel expenses. While that may seem high, we would have spent an additional $2,000 for flights alone just to view houses and sign our paperwork with our hired real estate lawyer.

Stack the odds, get a trusted friend or expert on your team 

Perhaps the deciding factor on whether or not purchasing a property, sight unseen, is a favourable process, is whether or not you can enlist the help of a trusted friend or professional expert. 

If you opt to solicit friends and family for help, you should always give them a criteria list. If you decide to use a Realtor, then you’ll first have to find a real estate agent in your new city of residence. This is tough, so don’t be afraid to rely on the trusted experts in your current home city. Ask a Realtor in your current city for a referral to an Agent they trust in the new city. You can also take to an affiliated brokerage office to find an agent that has the experience you need.

Once we found agents through an affiliated brokerage, we sent six people to view the home in our place. We had two real estate agents (who work as a team), my parents and my in-laws. My parents were on FaceTime duty, giving us a virtual look of the inside of the home, and my in-laws were doing a more thorough review of the property. We had them check for anything that might require maintenance, from light switches to major appliances. The agents were available to send us any videos or answer any questions about the property that we couldn’t find on the listing. 

A good home inspection can make or break the entire deal

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Once you’ve done your initial research, it’s time to let a professional inspector weigh in. While a home inspection is important in any real estate transaction, it’s even more critical when you plan to purchase sight unseen. An inspector will advise you on any major issues, such as cracks in the foundation or water damage. They will also confirm whether it’s a safe investment that requires minimal maintenance. If an inspector finds any issues with the property and as long as your Realtor wrote the inspection condition in your bid offer contract — you can then opt to renegotiate with the seller or back out of the deal completely, financially intact. 

Be sure that when you choose your home inspector, you do your research to find someone who has a lot of experience and comes highly recommended. It’s never a bad idea to look at all of your options and do a couple of interviews beforehand. The inspector must be properly certified by the National Home Inspector Certification Council (NHICC). Bonus points if they are apart of an association, such as the Canadian Association of Home & Property Inspectors (CAHPI) or the Canadian National Association of Certified Home Inspectors, Inc. (CanNACHI).

Real estate experts, financial planners and heck, even acquaintances, will tell you that you need to see a home in person before you put in an offer. It’s not common practice to buy a property sight unseen because for most people, it’s far too large of a risk. But sometimes risks are worth taking. Isn’t buying a house, regardless of whether or not you’ve seen it, a gamble?

For our situation, it was more of a risk to potentially miss out on a home that checked all our “must-have” boxes just because we couldn’t see it personally. For us, the risk of missing out on a house that worked for us and within our budget was much greater than the risk of buying sight unseen. We were fortunate. We felt we could reduce the impact of the risks associated with buying a house sight unseen by wrangling in the parents to help. In other words, we found great ways to do our due diligence, even though we weren’t physically present. Add to this our roster of hired trusted experts and the transaction became virtually effortless.  

We don’t deny that buying a home for our family, sight unseen, was a risk. But it was also the best decision for us. We had saved the money for a down payment and closing costs, we’d made a list and discussed the important features we required in a home and we leaned on family members and developed a roster of trusted experts who could help  ensure that the property was right for us. Purchasing a home sight unseen isn’t for everyone, but it was right for us and it could be right for you.

Alyssa Davies
Alyssa Davies

Alyssa is a personal finance blogger who focuses on mixing finances with laughter. Through her blog, Mixed Up Money, she helps people relate, learn and become inspired. She recently joined Zolo as the content specialist and brings her passion for property and smart money matters to this growing brand.