Sometimes the unexpected happens. You may be looking at moving to a new area for work or to be closer to your family. In that case, the idea of buying a home might not occur to you, but it’s something you should consider. When making any big financial decisions it is always advised to do your research. Most people think it’s too complicated to buy a home in another location, but there are some tips to make it a worthwhile experience.
Research the Neighborhoods
If you’re relatively unfamiliar with your destination city, this should be high on your list of priorities. You can contact real estate agents local to the area, talk to the police departments, and write to the area’s Chamber of Commerce. This can help you find out about comparable sales in the area you choose, the average cost of homes per square foot, and other factors that can give you a better grasp on the individual neighborhoods in the city.
Make Use of Technology
If you must buy a home without physically seeing it in person, you can take steps to ensure you’re getting what you pay for. Ask your real estate agent to tour the home for you, allowing you to see it via Google Hangouts, Facetime, or another video conferencing app. This will help you verify that the photos and videos uploaded to the listing accurately depict the property. You can also ask the real estate agent to tour the neighborhood with you in a similar way. By using video conferencing, you can amass a great deal of information without actually being physically present.
Understand That State’s Tax Laws
Contact a reputable accountant in your destination city to learn more about the real estate laws and property tax laws in that state. They may vary significantly from the laws in your current state, so it’s important to get a good understanding of the laws ahead of time. If you don’t know accountants in the area, ask your real estate agent to recommend someone. The differences in laws can affect how much you’ll pay in closing costs as well, so be sure to take this step, before making any offers. For example: Missouri Tax Laws and Texas Tax Laws.
Hire a Home Inspector
Whether you’re buying a house around the corner or across the country, a home inspection is essential. This can help you understand just what you’re getting into, as far as the condition of the property and the repairs you should expect to make. In some cases, state laws may require the seller to make certain repairs or discount the sale price in lieu of making the repairs. Once you find a good home inspector in your destination city, ask him to conduct a virtual inspection with you and send you the report.
Finding a Lender
Once you decide to buy a home instead of renting in your new city, you’ll want to start looking for lenders. Your best bet is looking for a qualified mortgage broker. A mortgage broker will be able to help you navigate the obstacles of getting a mortgage. Since a mortgage broker is familiar with many different scenarios involving mortgage pitfalls they will be able to advise you in getting your dream mortgage. In either case, be aware that your broker should be both knowledgeable and helpful in the mortgage process.
Researching the Cost of Living
This is important, because it may affect how much you’re willing to spend on your new home. If the cost of living in your destination city is significantly higher than that in your current city, you may want to be more frugal in buying your home. In addition to your mortgage, taxes, and insurance, remember that you’ll be paying utilities, groceries, and other expenses just to keep your household operating. Additionally, there may be unexpected repairs, even though you have had a home inspection. It’s important to be prepared for these eventualities, especially if you won’t know anyone in your new city.
Hire an Attorney
Even if you have a real estate agent working for you, you may also want to hire an attorney who specializes in real estate. While you’ll likely need an attorney’s services eventually in any case, hiring a lawyer earlier in the process can benefit you. A legal advocate can help ensure you’re protected against fraud and other financial dangers associated with buying out of state. Additionally, your attorney can go over documents to ensure your interests are safeguarded, before you sign off on something that you’ll regret. Also, an attorney can caution you about the differences you can expect in closing costs.
Certainly, buying a home in another state presents unique challenges that you might not otherwise face. However, it can be preferable to renting for a year and throwing away money that you would otherwise be investing in your new home’s equity. The process will require working more closely with professionals from real estate agents and lenders to home and pest inspectors, electricians, plumbers, and other contractors. If you remain diligent and research every aspect of the process, you can have a rewarding home buying experience.
Don’t forget to check out our home inspection checklist!