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!