If you’re looking to buy a house, you’re generally going to want to see the property in person. That said, there are situations that may prevent a buyer from ever setting foot on the property before buying. In cases like this, some buyers will make what is called a sight unseen offer. Let’s take a closer look at how these offers work, their pros and cons and how you may be able to navigate them.
Understanding sight unseen offers
If you’ve been wondering “What does sight unseen mean?” while on your real estate journey, don’t worry — it’s a fairly straightforward concept. As you may recall from above, if you’re buying a home sight unseen, you’re basically just buying it without actually setting foot on the property. Instead, you might rely on photos or video tours to give you a sense of the property’s condition and surroundings. The rise of technological advancements that allow us to see or “visit” properties potentially halfway across the world have helped facilitate these types of offers.
Besides this caveat, the process of making a sight unseen offer isn’t that different from your average offer. Usually, you’ll want to get a trustworthy real estate agent to guide the process. It may be a good idea to get pre-approved for your mortgage. This will tell sellers that you’ve got the funds to cover the purpose and may help the purchase move more quickly. After looking through photos or taking a virtual tour of the property, you’ll probably want to get a home inspection. Inspections are a common step in the homebuying process, but when you’re in a different location, they’re even more important. There’s plenty of things an inspection can reveal that a video tour may not.
If the inspection reveals there aren’t any major issues, you’ll want to proceed to make the offer and, hopefully, close on the home.
Pros and cons of sight unseen offers
Agreeing to purchase a home you haven’t seen in person may not be for everyone, but there are a variety of factors that may make sight unseen offers attractive or even necessary. That said, there are some potential disadvantages to be aware of as well.
Pros of sight unseen offers
- Convenience: If you’re located far from your dream property, a sight unseen offer may save the time, energy and expense of visiting in person
- Timing: The process of viewing homes is occasionally time-consuming, with many buyers having to visit several properties before they make any offers. As sight unseen agreements don’t require those visits, they can help buyers save precious time.
- Competitive edge: Sight unseen offers could help buyers move quickly in a hot market, which is when there’s high demand for housing and low inventory. A hot market usually benefits sellers as they may receive a lot more offers, resulting in a bidding war. The competitive nature of a hot market means buyers may want to forgo a tour and just skip straight to the offer to save time and potentially gain an edge on the competition, especially if the sight unseen offer is higher than the home’s asking price.
Cons of sight unseen offers
- Misrepresentation and hidden flaws: People who make sight unseen offers may end up realizing the property was misrepresented online. If the home is misrepresented, or if an inspection missed something, you could end up feeling buyer’s remorse or having to shell out some major dough for surprise repairs.
- Limited insight: Photos and video tours are usually helpful for anyone buying a house unseen, but there are some limits to the insight they can provide. It may be hard to get a good feel for the space or the neighborhood without visiting. Sight unseen offers are usually a shorter process, which could mean there’s less time to learn about the property. Deeper knowledge of a home’s history and condition may improve your shot at negotiation, but buying sight unseen may not provide this opportunity.
- Legal and financial risks: If you sign any contracts or make any financial commitments without inspecting the property, you may expose yourself to legal or financial risks if the property doesn’t meet your expectations.
How to lower the risks of buying sight unseen
If you’re concerned about the risks of buying a home sight unseen, don’t panic. There are several ways you may be able to protect yourself from the potential pitfalls, such as:
- Carefully watching virtual tours: A virtual tour may help buyers get a more complete picture of a property’s condition and general “feel.” You might even want to have someone local tour a place and dial you in on video or send you the footage.
- Hiring a local real estate agent: If you have a particular area or property in mind, hiring an agent could be a helpful move. Sharing your desires, concerns and goals may give an agent enough insight to make important calls on your part. It's rarely a bad idea to have someone on the ground looking out for your interests if you’re buying sight unseen.
- Phoning a friend: If you don’t want to hire a real estate agent, consider asking any friends or family you may have in the area. They might know you and your preferences more intimately than an agent.
- Using contingent offers: Including contingency clauses in your contract may offer buyers some added protection. Inspection clauses and walkthrough clauses, for instance, may provide you with an out should inspections or an eventual walkthrough reveal any issues with the property.
Sight unseen offers allow buyers to purchase a property without seeing it. Buying a house sight unseen is an option for anyone looking to move on a sale quickly, as well as buyers with travel constraints. As with any major purchase, buying sight unseen may come with risks, but there are ways to mitigate them. If you’re considering a sight unseen offer, it helps to do research, hire an agent and take advantage of contingent offers designed to protect buyers. Seeing a place in person may be ideal, but you don’t have to miss out on a great opportunity if you can’t make it there.