I am out of state investor and currently have my real estate agent look at properties BEOFRE we write a contract. I am curious, those agents that write contracts for clients on houses sight unseen, what contingencies do you put in the contract to be able to back out if something is alarming? Can you put in contingencies stating contingent of walk through? I would like to hear from others before I bring this idea up to my realtor. Thanks in advance!
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
4y
Investors can add as many or little contingencies as they like. Considering this insane sellers market it's pretty obvious what works better. The more you add the less appealing the offer. If you don't understand the difference between financing, inspection, appraisal, or an "as-is" addendum I encourage you to use the search bar on this website. There's a vast wealth of knowledge in this forums and it's free.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
4y
Not sure where you are buying, but about 25% of the homes in DFW area both by investors and owner/occupants are bought sight unseen by the buyer.
Some people can do this, some can't. Sometimes the realtor sees them first, sometimes they don't. Market moves pretty fast in many areas of the country, so this is probably getting more and more common.
I think it depends on where and what you are buying and other factors as to if this is a good idea or not. Many many buyers now for example in my market are also waving inspections and options to back out of the contracts. We also see lots of full appraisal waivers, so that is not an out any more. It does shift risk from seller to buyer now.
One of my buyers a few years ago told me......what can be wrong on a house, that I can't fix, or fix for a fairly minor amount of money. He is an investor and pretty handy, but this was for his $1mil personal home purchase. What's common we see that people may want to fix....HVAC, Water Heaters, broken seals on windows.....foundations, roofs...some of that we can see on a visual inspection....HVAC a little tougher....so he says what if I can't fix HVAC and have to buy 2 new units....$10-12,000. Sure big expense, but on a $1mil house, not that big of a deal. He was looking in neighborhoods he knew pretty well and on homes less than 20 years old and occupied....so fairly good odds most things taken care of.....safer bets...
If you buying older homes, or unoccupied homes, then maybe there can be more issues and more expensive issues vs price of the house. What issues do you expect? What are the cost of those issues? How are your margins and margins for error? Is there a simple checklist you can use to verify those concerns....how old is the roof, any signs of leaks inside?, how old is AC, how old is water heater, how does foundation look?
Remember there are people every day that buy houses without too much inspection. I mostly buy foreclosures and while I look at the outside of almost every one, very rarely get to see inside before we buy....and there are often 100s of people at these auctions buying as well.
Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
4y
I only invest locally but if I know the neighborhood and can map out the house based on photos, I'll often put out offers site unseen. But if I'm offering site unseen, I always ask for a 3-5 day inspection period to go see the home in the event my offer is accepted. If I see the home within that window and the house doesn't meet my expectations, I can back out of the deal.