Key Takeaways:
- Buying a house out of state is possible with the right planning and professional help.
- Research your new location and get pre-approved for a mortgage.
- Lean on your real estate agent for local expertise, virtual tours, and inspections.
- Remote closing makes the process smooth and stress-free.
Buying a home is a huge milestone for many, but that excitement can turn to worry when buying a house in another state. The potential unknowns are daunting, but luckily, the process of buying a house out of state is very similar to an average home buying process.
From browsing Redfin for homes in your dream neighborhood — whether that’s in Indianapolis, Spokane, or New York — to closing the deal and settling in, we’ll guide you through every step of buying a house out of state.
1. Understand your goals and timeline
Take some time to understand why you’re moving out of state and when you would like to be settled. Common reasons why people move out of state include:
- Job relocation
- Being closer to family
- Better cost of living
- Preparing for retirement
- Better education opportunities
- Change of scenery or culture
- Tax opportunities
Knowing your “why” will help guide the rest of your decisions, including your ideal location, budget, and timeline.
If your move is time-sensitive, like a new job with a firm start date, you may need to prioritize quick, remote-friendly processes like virtual tours and e-closing. If you have more flexibility, you can take your time exploring different areas to find the best fit.
2. Research your target location
Regardless of your timeline, buying a house out of state requires extra research on the area you plan to move to. You’ll want to understand the local housing market, cost of living, job opportunities, taxes, and lifestyle differences compared to where you currently live. State-specific taxes like income, sales, and property taxes can significantly affect your budget, so it’s important to be aware of their impact.
Redfin has a number of tools to help you with your research:
- Housing market trends and insights: View current data on pricing, inventory, and sales activity in the area.
- Cost of living calculator: Compare expenses like utilities, taxes, and everyday costs to see how your budget will stretch in different areas.
- Affordability calculator: Determine what home price fits your budget based on your income and debts.
- Rent vs. buy calculator: Compare the financial impact of renting versus buying a home.
- Home listings: Access neighborhood info, climate risk, schools, and more on property listings
3. Get pre-approved with a mortgage lender
Before house hunting, getting pre-approved for a mortgage is a great way to both understand how much you can afford and show that you are a serious buyer. When buying a house out of state, it’s important to note that your lender must be licensed in the state in which you’re buying. Depending on the state, down payment and credit requirements may also differ from yours.
4. Find a real estate agent in your new state
The best way to streamline the process of buying a house in another state is connecting with a real estate agent you trust. Since you’ll be remote for most of the process, your agent becomes your eyes and ears on the ground. Choosing the right agent in this case becomes even more important. Make sure they have experience working with out-of-state buyers in addition to matching your specific needs.
5. Start searching for your new home
House hunting can be a fun, if not stressful, process. One of the best ways to begin is by making a must-have and nice-to-have list to compare your needs and wants. Make a set of lists for both neighborhood and home to narrow down your search areas. Depending on your schedule and your budget, there are a few ways to search for homes out of state:
- Virtual tours: A virtual 3D walkthrough is a great way to view multiple homes from afar. This tool can help you narrow down the options you want to check out in person, or even give you the confidence to make an offer right away.
- Live walkthroughs: Ask your agent to guide you through a home via live video. They will be able to answer your questions about things you can’t see like noise, odors, or traffic, and check details like closet space and water pressure.
- In-person visits: If time and budget allows, an in-person visit is highly recommended when buying a house in another state – or anywhere for that matter. Plan a trip to see several homes with your agent and spend time exploring the neighborhood firsthand.
Some buyers buy sight unseen with a trusted agent and strong contingencies, but renting first offers flexibility and time to explore the area before committing long-term.
>>Read more: Should I Rent or Buy a House? Pros and Cons
6. Make an offer and negotiate
Once you’ve found the right home, it’s time to make an offer. Your agent will help create a competitive offer that contains key contingencies, like an inspection and appraisal contingency, to include when buying out of state. If you’re also selling your current house, a home sale contingency can help buy you more time to do so. Make sure your agent is aware of your specific needs so they can help cover all your bases in the offer.
>>Read more: 7 Common Contingencies in Real Estate that Buyers Should Know
7. Get the results of inspection and appraisal
A thorough home inspection is crucial when buying a house out of state, especially if you haven’t seen it in person. If you can’t attend the inspection in person, ask your agent to go on your behalf. Request a video walk through of the findings and a detailed report with photos and notes to spot any issues before closing.
8. Close on your house remotely
Unless you’re visiting or in temporary housing, you’ll be closing on your out-of-state house remotely. Luckily, most closing documents can be signed electronically. As long as your agent and your lender have experience helping out-of-state buyers, closing from afar is a breeze. Depending on your brokerage, you might be able to have your new keys mailed to you or placed in a lockbox to retrieve when you arrive.
9. Plan your move and get settled
Now that you’ve closed on your new house out of state, it’s time to make your move. Moving in general can be stressful, and moving to a new state only adds more complexity. Hire a moving company and use a moving checklist to keep everything organized. Keep essentials like medication and important documents with you to avoid last-minute searches.
Once you’re settled, be sure to tackle these key post-move tasks:
- Update your driver’s license
- Update your voter’s registration
- Sign up for mail forwarding
- Change your address for work, finances, and subscriptions
- Set up your utilities and internet
And, of course, take time to explore your new neighborhood. Meet your neighbors, locate your nearest grocery store, and find some unique things to do to get to know your city.
>>Read more: 15 Moving Hacks to Make Your Next Move a Breeze
FAQs about how to buy a house out of state
Is it hard to buy a house out of state?
Buying a house out of state is very similar to the average home buying process. The major difference lies in the amount of research you need to do. Be aware of differences in taxes, cost of living, and local laws especially when buying a house in another state so you can budget accordingly.
What is the timeline for buying a home out of state?
The timeline for buying a house is different for everyone, but the general steps remain the same when buying out of state. If you want to take more time to search for the right neighborhood, living in temporary housing can extend the timeline and give you a chance to find the perfect spot.
Can I buy a house without seeing it in person?
Yes, many buyers purchase homes sight unseen, or having never set foot in the house. Using virtual tours, 3D walkthroughs, and trusted agents can help ease the process. Make sure to include inspection and appraisal contingencies in your offer to keep yourself protected.
Should I rent before buying in another state?
Temporary housing is a great way to get to know an area before making the commitment of buying a home. You can rent a house or apartment, look into corporate housing through your employer, or live in a long-term vacation rental if you need more time or info to consider buying a house.
Does my mortgage lender need to be in the same state?
Yes, your mortgage lender will need to be licensed to operate in the state you are buying in. When searching for a lender, try to find one who has experience working with out-of-state buyers so they can easily help you through the process.
Can I buy a house in another state without having a job there?
Yes, you can buy a house in another state if you don’t have a job there yet. Many people who own secondary properties own in areas other than their home state. Just be sure to consider your budget and whether you’ll be buying and selling a house at the same time.
What if I’m relocating for work?
Speak to your employer about relocation assistance. If you’re being transferred by your company or accepting a new job in another state, you may qualify for moving reimbursements.
The post How to Buy a House Out of State: A Step-by-Step Guide appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.