Buying a home without seeing it sounds pretty scary — especially when it’s consistently drilled into the psyche of buyers that it’s the biggest purchase they’ll ever make.
It’s well past time the industry back off a little on that “biggest purchase” line because fear doesn’t exactly help people make decisions. Plus, it really only pertains to first-time buyers, as most seasoned homeowners are well aware of what the process entails.
That’s why agents shouldn’t worry all that much about a client wanting to buy a home sight unseen. Many of them have been there before, and it’s really not that big of a risk. Buying “sight-unseen” is somewhat of a misnomer in today’s tour-tech-rich market. The term best refers to a home the buyer hasn’t seen in person.
Still, if reasonably possible, a person should see a home before buying it. Heck, I flew halfway across the country to look at a truck I planned to buy because I knew the vehicle originated in the Midwest. I’m damn glad I did. The condition of the under-carriage suggested it was stored at the bottom of a pond. So, yes, there are always risks, and as the saying goes, “caveat emptor.”
Yet, Homes.com conducted a survey of 1,500 visitors that discovered 42 percent of buyers are willing to buy a home sight unseen. I bet that number surprises you. Here a few reasons why it shouldn’t.
1. Tour technology
In the Inman Handbook on digital home showings, I wrote that “camera sophistication, bandwidth expansion, the mainstreaming of videoconferencing and consumer demand were all speeding toward one another long before the pandemic introduced an accelerant to the fuel mixture.”
Today, buyers expect to see a virtual tour, if not at least a listing video. Imaging technology can now edit exterior wash-outs to provide online tour participants with full views of fenced backyards and curb appeal, all but finalizing the immersive experience.
From fully orchestrated group open houses to an agent FaceTiming through a listing, it’s easier than ever for buyers to get enough information to submit an offer.
2. Availability and quality of property data
Industry vendors have made real estate data its own industry. What agents can learn — and then share — about a home and its location is borderline scary, but in a good way.
Powerful comparative market analysis solutions, such as Inside Real Estate’s dashCMA and Lone Wolf’s Cloud CMA, offer agents in-depth, visually rich ways to absorb what’s happening in real estate down to the cul-de-sac.
And these tools are no longer only beneficial to listing agents trying to woo sellers. They’re now incredibly prescient mechanisms for helping buyers know what to offer, when and what waiting even a week or two might bring.
TopHap is a data-layered mapping tool that vibrantly illustrates the physical characteristics of a market’s growth activity, ranging from fault lines and carbon dioxide density to noise levels and the slope angle of a street.
Think about it: Redfin, Zillow and realtor.com have well-funded economic research departments. Reports of all kinds are published regularly for the specific purpose of keeping agents and consumers information-savvy.
When it comes to being the source of the source, you’ve never been more resourceful.
3. Buyers are competitive
A Washington, D.C., listing received 88 offers in four days, 15 of which were made without the buyer seeing it. Social media threads swell daily with buyer-agent angst about losing offers and listing agents panic about juggling multiple offers.
“A real estate professional posted in the popular Lab Coat Agents Facebook group that she had just lost a bidding war despite offering all cash and $50,000 over the listing’s asking price,” wrote Inman’s Jim Dalrymple. “The post generated more than 100 comments, many of them from other agents who have experienced the same thing.”
A Redfin report stated that in February 2021, close to 70 percent of its agents faced at least one bidding war.
One-time San Francisco resident Erika [last name withheld by request], now of Truckee, California, spent nearly $1 million on a home she didn’t see in person, largely out of frustration of being beat by other buyers on previous listings.
“For sure, things were moving so fast, and I submitted the offer not really expecting to win it,” she said. Erika visited a few homes in person, but those offers went nowhere, she said.
The listing agent’s use of a 3D tour was a big factor. “With that Matterport virtual tour, yes, I felt comfortable. But if it was just photos? No, I do not think I would have done that.” she said. “Individual photos are ambiguous, you don’t know where you are in the house, or what bathroom it is.”
Erika said her agent Jovanah Vigil, founder of Tahoe Prime of eXp Realty, was a huge help. “She went to tour it, narrated while walking around,” Erika said. “That was super helpful.”
In a phone call, Vigil said sight-unseen buying is definitely more common today.
“I have another listing in escrow with buyers who haven’t seen it, and one before Erika’s, so my last three sales have been sight-unseen,” Vigil said. She also agreed with her client on how photos, especially those taken with wide angle lenses, can make it hard to judge a space. Matterport and other virtual tour tools play a big part, she said.
“One thing we’re required to do is complete an AVID, or agent visual inspection disclosure. With that, we go through the home to note any glaring issues, such as a hole in the wall, or stain on the carpet,” Vigil said.
But when the sale is sight-unseen, that form gets especially thorough attention.
Vigil said the Tahoe area is seeing a number of sellers order an inspection, offer it to buyers, and ask for highest and best.
As Erika iterated, pressure and frustration can be good things in sight-unseen scenarios, especially when buoyed by a smart agent and proven technology.
4. Every home needs work
News flash: There’s always something broken. Loose railings. Older water heaters. A touch of mildew under a deck. If these weren’t common household items, Home Depot wouldn’t exist.
Agents, outside of severe foundation or mold issues, most inspections only reveal stuff we all know is likely already an issue. Again, with so much home data available, as well as your own expertise in selling homes, there’s a good chance you can tell your buyer what to expect to fix once they’re moved in.
“If serious issues are uncovered on a property, selling ‘as is’ may become aspirational, and the sellers may need to adjust their asking price as well as terms to secure a buyer who will stick,” Cara Ameer wrote in an Inman article. “For example, a cash buyer may be the only one able to buy the property if its condition gets in the way of a lender being able to make a loan or a buyer obtaining insurance. Even a cash buyer may encounter difficulty getting insurance and may not want to take on the risk of trying to sort through all the complications.”
Know that there is plenty of precedent for as-is purchases, and they give buyers a tremendous advantage when things get competitive.
5. They’re becoming more common
As mentioned, there is plenty of precedent for buying homes sight unseen, and by the time this spree slows, there will be a great deal more of it.
I used to sell investment property as is, and often to investors from out of state who never came to look. Granted, investment property is all about the income stream, and it’s easier to assess repairs because the previous owners’ income and expense history spells it out pretty clearly.
Still, I never remember an issue with a client as a result of buying sight unseen.
As this ultra-competitive seller’s market rages on into 2021, more homebuyers, like Jones, will see 3D tours and motivated agents as their eyes and ears on the ground, as proxies for their presence.
It’s likely the pace of the current market will continue for some time, unless eventually buyers exhaust themselves of the bidding process. That looks doubtful as of now.
But the result of this market is a new comfort level, a new normal, of submitting offers without physically touring a home. The game just keeps changing.