A Redfin survey seems to showcase the growing popularity of sight-unseen property offers.
According to the survey, 19 percent of people who bought a home in the past year made a bid on a home before viewing it in person. That number jumps to 39 percent for high-end homes that are worth $750,000 and more.
The survey, which was conducted by SurveyMonkey Audience, was sent to 2,200 consumers in Redfin’s primary markets, including:
- Baltimore
- Boston
- Chicago
- Los Angeles
- San Diego
- San Francisco
- Seattle
- Washington, D.C.
Although the findings could indicate a trend of some sort, the limited geography of the sample means that the results can’t be extrapolated to every market. Studies conducted with random respondent samples are more statistically sound than studies that segment respondents in one way or another.
However, this research could be evidence that some buyers in hot markets are eschewing in-person visits in order to get a jump on properties that are likely to move quickly.
Why so many sight-unseen offers?
According to Redfin, out-of-state or international buyers often have no choice but to make sight unseen offers because of intense bidding wars and fast home-selling speeds that don’t allow much time for extensive travel arrangements.
Local buyers are often compelled to make offers sight-unseen for the same reasons, but technology certainly plays an important role in why these buyers still decide to make sight-unseen offers.
Redfin notes that technology, such as 3-D models, live walkthroughs and extensive neighborhood data, allow buyers to learn about a home without ever leaving their laptop.
How to manage a sight-unseen purchase
Of course, there are risks with buying a home sight unseen, such as a buyer not liking the house as much as they thought they would — but a savvy Realtor can work around that.
In an article Inman published in March, Josh Tucker, a top producer and broker/managing partner of Anchor Real Estate in Charlotte, North Carolina, said he does up to 10 sight-unseen transactions per year.
Tucker says he always asks for a contingency period that allows buyers to view the home after making an offer — all for a price, of course.
“We need to act quickly — they know they are risking their due diligence money, so it becomes a matter of, ‘Are you okay with risking $5,000 to lock this house up before you can come to town and see it or take the risk and find it’s gone?’” He said most of them risk the money.
In addition to creating contingencies, Redfin suggests asking your buyers if they have a trusted friend or family member who can view the home, clearly lay out features of the home that can’t be caught on photo and video, and conduct live walkthroughs where the buyer can ask questions in real time.