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How to Buy a House Out of State

December 02, 2020 · 6 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

How to Buy a House Out of State

With millions of American workers now laboring remotely (sometimes far from corporate HQ), some US workers are wondering how to buy a house out of state.

Long distance house-hunting requires a bit more planning than shopping for property just down the street. After all, the types of homes and property for sale and even the home-purchase laws can vary from state to state.

While data is scarce on the number of people in the US who are looking to buy a house in another state, one report shows that one in five Americans moved or know someone who moved during the Covid-19 pandemic in 2020.

The breakdown, according to age groups, is striking—with 37% of people ages 18 to 29 reporting that they relocated, had someone new move into their current housing, or know a person who moved.

Figuring out how to buy a house out of state can be a challenge, but for some it’s doable with a little long-distance house hunting advance planning.

Here’s an overview of the process of buying a house in a different state—from finding an on-site real estate agent knowledgeable about the local market to visiting potential properties before purchasing.

Why Buy a House in Another State?

There are multiple reasons why homebuyers might consider a house in different state, including:

Improved living situation

According to one 2019 study, 16.4% of Americans who moved did so because they sought an improved home living experience—including houses and apartments.

Affordability

People may opt to move to another state because it’s more affordable to buy a home there, when accounting for local cost of living and average home costs, than in the state where they currently reside.

Job relocation

Some companies or employers relocate personnel to out-of-state locations. Data from the US Census claims that 10.3% of Americans moved out of state due to a job relocation in 2018, for example.

Family reasons

Homebuyers may choose to buy a house out of state to be closer to family. Some might move to take care of aging or infirm family members. Others might choose to move to be closer to where their children or grandchildren live.

Retirement

Americans entering retirement may want to buy a home in a state where the weather and style-of-life appeals to retirees. According to one study, approximately 930,000 people ages 60 and older moved across state lines in 2018 – that’s up 16% from five years earlier

How to Purchase a Home in Another State

As the saying goes, the shortest distance between two points is a straight line. That goes double for people looking to buy a home out of state. Here are some ways to tackle that inter-state move:

1. Map it out

In this, the digital age, it’s easy to use the internet to research new homes and communities. Leverage “locator” sites like Google Maps to study a potential out-of-state home’s proximity to good schools, medical centers, law enforcement agencies, parks, and restaurants and retail outlets.

In doing so, you’re already getting a good sense of an out-of-state community before you start looking for a specific house.

2. Link up to social media

Social media platforms like Facebook Groups or Nextdoor can hook you up with local community groups online to get a better – and more personal – sense of home buying and community.

These groups are highly user friendly to newcomers and many group members are happy to answer any questions about life in their city or town.

3. Check in with co-workers and family

If you’re relocating out of state for a job or to move closer to family, check in with future co-workers and family members on advice on the best homes, neighborhoods and communities.

Once again, local knowledge can be a big benefit to homebuyers seeking to buy a residence out of state, but who lack sufficient knowledge of the local areas they’re targeting.

4. Talk to a relocation specialist

Yes, home relocation professionals exist. And, they could be a big help for individuals and families interested in an out-of-state move. A relocation expert can be especially helpful in making an out-of-state relocation easier on the homebuyer. Relocation specialists might help with things like:

•   Finding a long-distance moving company
•   Enrolling children in local schools
•   Securing a storage spaced for excess household inventory
•   Supervising contractor work on location, when either buying or building a home.

Relocation companies could also link you up with local service providers—like a doctor, dentist, lawyer, and accountant. Some may be able to help homebuyers to transport pets and ship family vehicles across state lines.

In certain cases, relocation services can be free of charge—as some earn their money from third-party vendors, like real estate firms or employers moving employees to an out of state location.

5. Find a reliable real estate agent

Some people who are interested in buying a house out of state opt to partner with an experienced real estate agent based in the area where they hope to move.

Why do some out-of-state homebuyers opt to pair up with a local realtor? Real estate agents based in that state may be able to provide more detailed information of local geography, towns, and the properties types on the market.

Real estate agents, also known as buyer agents, can also walk potential homebuyers through local zoning regulations and permits that may be necessary for house upgrades—as these can vary from state to state, town to town.

6. Visit your new state

In today’s digital age, it’s not always necessary to show up in person just to check out a property. Online house listings may include photos of the property (inside and outside), floor plans (if it’s not yet built), or videos of the space.

Local realtors can also send interested homebuyers images, data, and information on “homes for sale” in the new state.

That said, it’s understandable that someone looking to buy a house in a new state may want to conduct an on-site visit, too—especially once a property of interest has been found.

If you’re working with a real estate agent, you may receive short notice on when a home is open to viewing. So, it could be helpful to budget for out-of-state travel as part of the build-up to buying a home in another state.

While a real estate agent can act as a proxy for homebuyers, there’s nothing like being on site when a home inspector examines a listed home.

Licensed home inspectors can answer questions about the property, while the potential homebuyer is physically present and able to view any necessary repairs.

7. Get preapproved for a mortgage

It can be easier to find an experienced realtor or relocation specialist with a mortgage loan pre-approval letter in hand.

When a lender pre-approves a mortgage applicant (a hard credit check and a review of financial assets and documents is typical with home loan applications), they’re greenlighting a specific home loan amount at a particular interest rate.

Obtaining a pre-approval letter from a lender can communicate to home sellers and realtors that a homebuyer has already qualified for a home loan up to a certain amount.

8. Handle the closing online

While being on site is a good idea when the home is being inspected, homebuying closings can also be handled digitally.

You may need to pay a notary public to come to your current home to sign and credential key documents (or visit the notary at his or her local office) but the actual home closing can be done remotely.

Still certain legal documents may require a physical signature, so there could be some additional costs tied to mailing signed paper documents.

Your real estate agent or relocation experts might be able to help you find a good notary and title company with experience in your current state of residency and the one you plan to move to.

9. Find a long-distance moving company

Once you’ve signed off on your new out-of-state home purchase, don’t wait to find a trusted long-distance moving company.

Check online for rate information and reviews and stick with a long-distance mover with a solid reputation for reliability, performance, and high ethical standards.

You could start that search on the US Department of Transportation website, which tracks moving companies that transit across state lines. Here, you can check out potential movers’ company safety profiles, crash reports, and inspections.

Online review sites, like Yelp or Consumer Reports, can also be checked to read up on other consumers’ experiences working with specific companies.

Once you’re convinced the mover is reputable, it could be helpful to email or call to discuss moving rates and expected timelines for a long-distance move.

The Takeaway on Buying a Home in a New State

Buying a home in a new state can be confusing, especially when you don’t already live there.

But, with some careful preliminary research and pre-planning conducted, moving across state lines is something that millions of Americans do each year.

Applying for mortgage pre-approval, finding a local realtor, and seeing listed properties in person are just some ways to pursue buying a home out of state.

Thinking about moving out of state? SoFi home loans come with no hidden fees—requiring as little as 10% down.



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