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Each year, more than 40 million Americans pack up their things and move. The vast majority of them are motivated by housing and remain within the local area. However, 14% of moves are interstate, meaning people are relocating to an entirely different area of the country. And odds are, they’re buying a house out of state.
These long-distance moves are typically motivated by jobs. On the other hand, some older Americans often move out of state for family-related reasons.
Regardless, most of these relocations require homeowners to sell their current homes and buy new ones. This step adds an extra layer of stress and logistics to the move and can leave many potential buyers in a state of fear and indecision. How should they go about buying a house out of state?
Luckily, knowledgeable experts and advancements in technology have simplified the process and made interstate home buying possible for even the most uncertain buyers. Follow the 10 steps below to successfully find a home and streamline the move.
1. Assess Your Situation
Homebuyers looking to move to another state must first assess their current situation before searching for potential homes. Why are they moving? When do they hope to complete the move? Do they have enough money to relocate right now? Answering these and other similar questions will help them determine when to list their home and begin the search for another one.
If they’re like most interstate migrants, homebuyers are likely moving for work. In this case, their employer might foot the moving bill, give them a promotion and help them create a timetable. However, if the person isn’t completing a job transfer or moving closer to the office, they’ll have to list their goals and create an ideal time frame independently.
Many buyers assume that the out-of-state home buying process will be just as quick as a local move. However, if they choose an area in high demand or list their existing home when it’s a seller’s market, the process can take up to a year or longer. Therefore, it’s important to assess market trends before solidifying a moving time frame.
2. Do Your Research
Getting to know a new place takes time, especially from afar. And buying a house out of state is a huge commitment. That’s why interstate migrants should begin researching the prospective city and state early on in the process. Aside from Googling the locale, buyers can also read local news articles, join resident groups on social media and tune into local radio stations to get a feel for the area’s culture and community.
Homebuyers should also keep an eye on home values and the local job market in their desired area. How in-demand is their career or specialty? Are there opportunities for them and their partner to grow in their career? Will those lines of work pay enough to afford living in that city or state? Maybe there’s a different county or neighborhood that would be more suitable for their personal and professional development.
Families with kids should also consider factors like school districts, crime rates and public transportation options. Does the bus route include their prospective neighborhood? Can kids ride public transportation for free? Is the area safe enough for them to walk or bike to school? It’s easy to forget these small but important details when there are so many other factors to consider.
3. Reorganize Your Finances
By this point, most homebuyers will have already considered their finances and reorganized their budget to reflect the cost of living in a new state. Often, the cost of living correlates with wages, so a raise or bonus might be in the works for those looking to relocate.
However, if a homebuyer isn’t receiving a pay increase, it’s a good idea to start living on a tighter budget well before the move. This way they can learn to live on less and save a few paychecks to help cover the downpayment or mortgage when it’s time to move.
Speaking of mortgages, now’s the time to get preapproved for one. Homebuyers should expect to spend a few months paying down debt to raise their credit and qualify for better loans with lower interest rates. A mortgage lender can walk them through the process, but homebuyers must know their finances independently to make a decision that’s right for them and their budget.
4. Contact a Relocation Specialist
If a move is work-related, many employers will offer professional relocation services to assist with employee transfers. However, even those who are buying a house out of state for personal reasons could benefit from hiring a relocation specialist. This person will handle all the little details interstate homebuyers would manage if they had the time and knew the community.
For instance, many will arrange for packing and moving services, enroll the kids in a local school, find financing for the new home and help people sell and close on their current one. Of course, if homebuyers aren’t interested in paying for these services or would rather handle them independently, they can still ask a specialist for relocation materials. The information won’t be as personal, but it can provide some insight on what to consider as a homebuyer narrows their search and completes their moving to-do list.
5. Find a Local Realtor
Whether they hire a relocation specialist or not, it’s crucial that homebuyers find a good real estate agent. Look for a local realtor or buyers agent who specializes or has experience in helping those buying a house out of state. These professionals tend to be more tech-savvy and will have little problem facilitating video calls and virtual tours and helping you sign digital contracts.
Ask for referrals from friends and family to find qualified realtors or search local listings and read online reviews. Mortgage lenders can often point borrowers toward good agents, too. Homebuyers should interview multiple options to find someone who’s willing to attend open houses and other meetings on their behalf.
6. Take Lots of Tours
Most out the time, people who are buying a house out of state are unable to attend in-person showings and open houses. Instead, their realtor attends these events and connects through video calls. This method allows the buyer to take virtual tours of both the interior and exterior of prospective homes. It also lets them get a better feel for the neighborhood and nearby amenities.
Of course, once they’ve narrowed down their choices and are ready to make an offer, interested buyers should take a trip to see the house in person. Smell the air, feel the wood floors and get a better sense of the local community before signing paperwork and finalizing the move. A short visit will often make or break homebuyers’ final decision, so don’t skip this vital step.
7. Consider Property Restrictions
Every state has different real estate laws regarding disclosures, zoning, inspections, property lines and deeds, all of which can impact homebuyers. For example, one state may completely ban home additions or require the owners to get a permit first while another might them to do so without any restrictions.
Homeowners associations may also impose restrictive covenants on local communities to limit how owners can use the property. This covenant exists as a clause in a deed, making it legally binding and enforceable. However, most owners won’t realize they’ve broken a covenant until it’s too late. Then, they may have to pay fees, accept extra responsibilities or completely undo unapproved renovations.
Thus, people who are buying a house out of state should familiarize themselves with their new state’s real estate laws before making an offer on a home. Research zoning laws, building codes, property lines and other important details specific to the prospective neighborhood. Often, local realtors and real estate attorneys will have access to this information, so don’t hesitate to ask.
8. Work with National Organizations
Most lenders won’t offer loans to borrowers who’re unable to meet with them in person, a predicament that can easily frustrate interstate homebuyers. Luckily, there is a workaround. By applying for a loan through a national bank like Bank of America or Wells Fargo, homebuyers can easily apply for a loan in one state and manage their mortgage through the same branch in another. This strategy simplifies the process and ensures a seamless transition once they move.
Out-of-state buyers should also work with a national title company with affiliated branches in both states. This way they can visit their local office to sign papers or get them notarized. Then, if they need to file a claim later on, they can visit the office nearest to their new home.
9. Close on Your Existing Home First
Closings fall through all the time, regardless of whether they’re in or out of state. However, there’s a higher chance of them falling through if homeowners try to buy a new home before selling their existing one. In this case, they’d either need to have cash on hand or qualify for a second mortgage. Both scenarios are rather unlikely for most middle-class Americans, which is why it’s wise to close on home number one before purchasing another.
Of course, this timeline isn’t ideal, especially since most homeowners will have to find temporary housing between moves. However, they can avoid potentially having to rent by adding a lease-back contingency to the home sale. This clause allows the seller to remain in the home and lease it back for a set term — typically 30 to 90 days — while they close on their new home. In doing so, they’ll avoid signing a long-term lease, paying early move-out fees or overpaying for a short-term rental agreement.
10. Negotiate and Finalize
Once an interstate homebuyer has found their dream home, it’s time to negotiate and finalize the contract. This is where having a realtor or real estate attorney comes in handy. They’ll analyze the home inspection, research the home’s fair market value and negotiate both pricing and terms on the buyer’s behalf. An attorney will also add contingencies to the contract to protect your best interests.
When the time comes, sign any necessary electronic documents to complete the closing process from afar. Be aware of online scams and read over the paperwork in its entirety before providing a signature. It’s not uncommon for sellers to add last-minute terms and conditions and expect the buyer to look over them before signing.
Buyers can also renegotiate offers after the final walk-through if they spot a problem. In this case, they might add a clause requiring the seller to fix and pay for the defect before the move-in day.
Planning a Smooth Out of State Move
Moving to a new state is a big deal, but, with the proper planning, buyers needn’t be fearful. Instead, they can embrace a spirit of optimism and excitement by making a to-do list and starting the home buying process sooner rather than later. In doing so, they’ll minimize stress and ensure the smoothest move possible. If all goes according to plan, they’ll be home sweet home again in no time.