One in five homebuyers offers to purchase a home sight unseen, according to survey data commissioned by Redfin during 2015 and 2016.
Many of these buyers are looking at high-tier homes. 39% of those who purchased homes over $750,000 made an offer before seeing the property. Others who make sight unseen offers include those moving from out-of-state to pursue employment opportunities or investors purchasing distressed or foreclosed homes, frequently in bulk.
Sight unseen offers have become more common in today’s technological age. Along with the pressures from a fast-moving housing market that won’t wait for buyers to fly in from out of town, the ability to receive online and virtual — even virtual reality — tours has made the decision easier for some homebuyers simply unable to view the home before making an offer.
Still, even the most state-of-the-art virtual tour is never going to be as insightful as tangibly seeing the home in person, so the risk for buyer’s remorse is always elevated in these instances. To mitigate this risk, the prudent buyer with their agent thoroughly reviews the seller’s property disclosures and includes an inspection contingency clause in the purchase agreement. [See RPI Form 150]
While risky for the homebuyer, sight unseen offers also put additional pressure on the buyer’s agent.
Steps the buyer’s agent takes with sight unseen offers
While assisting a buyer who plans to make an offer sight unseen poses some additional challenges for buyer’s agents, there are some extra steps you can take to protect yourself from buyer-backlash when the home doesn’t match the impression the buyer had of the property based on the property disclosures and marketing materials.
- Conduct an extensive interview of the homebuyer. Glean as much information as you can on the type of home they’re searching for, including specific likes and dislikes.
- Use your experience in the area to discuss important factors with the buyer they may be unaware of, like distance from the home to amenities and services, local traffic, the quality of the local school district, and any nuisances that may affect the home or surrounding area.
- When possible, video chat with your buyer when they take a virtual tour of the home so you are able to immediately address their questions and concerns as they arise.
- Be ready to defend your buyer against the dismissive attitude of the seller’s agent, who may believe the buyer isn’t a bona fide purchaser since they haven’t physically inspected the home for sale. Be sure the seller’s agent is fully aware of all the due diligence investigations you and your buyer took to become experts on the property in question.
- Insist the buyer include an inspection contingency with their offer. The buyer may wish to include a walk-through contingency, but they run the risk of the seller refusing the contingency and signing a purchase agreement with another buyer.
- When an offer is accepted, encourage the buyer to video chat during the home inspection. This will give them a chance to talk with the inspector and ask pertinent questions about any potential trouble spots with the home.
And as you would with any buyer you represent in-person, encourage and inform your buyer, but don’t be pushy. You don’t want the buyer to feel they were pressured into purchasing a home they later regret — and spread this negative impression to others.
Agents: do you have experience working with clients who bought properties sight unseen? Share your tips with fellow agents in the comments below!
As a Broker selling short sale properties, when I have multiple offers on a short sale property, and I trying to help the seller pick the most likely buyer offer to close, I DO NOT ACCEPT OR CONSIDER SIGHT UNSEEN OFFER, though at an exaggerated high price because the clauses that allow the buyer’s withdraw their offer and derail my seller’s shot sale are too great…..especially when I have investigated the market and the offer exceeds the property’s market value for it’s condition. In other words, I skeptical of a fishing expedition offer (where the intent is to offer a high price to get the acceptance and then weasel down the price after the offer is accepted and the inspection and appraisal are done.
.you are so right on
During the residential real estate frenzy of 2009 in SW Florida, I was given the opportunity to facilitate several sight-unseen transactions. I always walked the properties, did a “visual inspection” of the property, reported all observable facts pertaining to the property and its location, stitched together virtual tours and had lengthy conversations with my buyers concerning criteria. I also always inserted a clause allowing the buyer to personally inspect the property by a certain date after acceptance. The buyer was also given ample time to review property disclosures. They all closed.
I sold one sight unseen that backed up to a busy railroad track…commuter train & 1 freight a night. They had a summer business in the Northeast and wanted a vacation home in Carlsbad Ca, near the beach. This was early in the digital camera era (it used a floppy disc). I took many pictures including one of the train in full view from inside the home. They loved it then and still do. Their grandson is enthralled. Today I would recommend a video chat thru Facebook or Google. http://carlsbadhomesforsalenow.com/
I have sold one home sight unseen before. The buyers were from out of state and called to purchase something completely different than what I sold them. The original listing was for a cute cottage home but the photo’s didn’t show all the graffiti on the walls of the liquor store next door. Although they were willing to buy it sight unseen, I took photo’s of the surrounding area and properties which quickly changed their choice to another home that was in the same price range that I felt comfortable selling them knowing it was a nicer location after they reviewed the photo’s for themselves and made that decision.