Buying a Home Remotely: A Step-By-Step Guide

Buying a home remotely is becoming increasingly common these days. It has been standard practice for some time in the real estate world for sellers to skip the home closing by pre-signing paperwork and having sale proceeds wired directly to a bank account.

Now, the entire process can be done remotely—by buyers as well as sellers. Learn more about the process of buying a home remotely.

Benefits of Buying a Home Remotely

You may want to buy a home remotely for a myriad of reasons, and the process has become increasingly common.

“People who buy remotely often do so to purchase a second home or vacation home,” says Todd Kaderabek, a residential broker associate with Beverly-Hanks & Associates Realtors in Asheville, N.C. “Typically, they are from out of state and have jobs and other obligations that prevent them from spending a lot of time on the home-buying process.”

Financing can be a factor in whether a home is purchased remotely, Kaderabek says. For example, if a parent is buying a home for a child who lives out of state, they may need to buy the home remotely. The parent would buy a home they didn’t see in-person and handle the paperwork, closing remotely.

Real estate investors may also choose to buy homes remotely. Real estate investors often follow the 1% rule of thumb, which states that the monthly rent earned on a property should be at least 1% of its purchase price. rule in certain markets, which may be located a significant distance from the investor’s home base. Buying a house remotely in markets where purchase prices are lower or rents are higher can be an attractive option for real estate investors.

Whatever your reason for buying remotely, there are certain steps you can take to ensure the process goes smoothly possible.

Find the Right Real Estate Agent

You will depend on your real estate agent to handle nearly the majority of the home-buying process, so it’s critical that you find a good fit. “Home buying involves a lot of moving parts,” says Kaderabek. “It’s important to find a good personality match between the client and the agent.”

Consider interviewing potential real estate agents, whether by phone or video, and get references see what other buyers have to say. You’ll want a real estate agent who is familiar with the market you are buying in, and has knowledge about local price trends and may know about lenders with competitive mortgage interest rates.

Ask About Experience

When you speak with a potential agent, Kaderabek recommends asking from the start: “How often have you done this process remotely?” Experience matters and agents who work frequently with remote buyers are more likely to understand how it works, negotiate favorably, and find suitable properties for the buyer.

The agent should also be able to advise on a mortgage lender. “A non-local lender is likely to use a non-local appraiser, which can be the death knell in unique markets,” says Kaderabek.

Ask About Availability

Many real estate agents work odd or part-time hours, which can be particularly difficult for remote buyers. Your agent will serve as your proxy, so they need to be available during regular business hours to handle a variety of tasks in the home-buying process, including home inspections.

“I attend all home inspections, but with an out-of-town client it’s critical,” says Kaderabek. “In a world where home inspections take place between nine and five, it’s going to be very difficult for an agent to attend your home inspection if they have another job.”

Share Your Wish List

Once you have an agent, share your wish list with them so they can help you find the perfect property. The more refined your list, the quicker the home search may go. If you have too many requests, it will likely slow down the process.

Stick to the things that really matter—size, location, house style, walk-in closets—and leave out the minor details that would be easy to fix or update in any home. And if there are any deal breakers—features you absolutely could not live with (or without)—let your agent know early on, so they don’t spend time looking at the wrong properties.

“If you’re an agent, you have to take that bold step to call your client and tell them you’ve found the perfect property for them,” says Kaderabek. As a buyer, you need to trust that your agent knows exactly what you’re looking for and that they have also taken the time to look closely at the home.

Use the Due Diligence Period

Once a home is under contract, you have time to review title documents and deed restrictions, as well as to conduct inspections, financing, and bank appraisals before closing.

In some states, including North Carolina, there’s an official due diligence period, during which buyers conduct their due diligence and decide if they want to go through with the home purchase. This may not apply if the home is a new construction.

The buyer pays a non-refundable due diligence fee, typically between $500 and $2,000. This essentially compensates the seller for taking the home off the market and gives the buyer time to make a decision.

The buyer also makes an earnest money deposit, equal to about 2% to 3% of the purchase price—or more in fast-moving markets. Both the due diligence fee and earnest money deposit are negotiable between the buyer and seller.

You can typically terminate the contract for “any or no reason” during the due diligence period and forfeit only the due diligence fee. If the buyer backs out after the due diligence period, they will forfeit both the due diligence fee and earnest money.

As only the due diligence fee is forfeited if the buyer terminates the contract during the due diligence period, remote buyers can use it as a tool to get a house under contract while giving an easy out to terminate the contract with limited financial risk. In the case of buying remotely, you can use that window of time to view the property in person if you can before making any final decisions.

Close Remotely

The E-Sign Act of 2000 makes your electronic signature just as valid as if you signed the documents in person. In addition, advances in technology have made remote closings routine for sellers and very feasible for buyers. Your agent will send you all the pages of the contract and addenda. You’ll sign them using an electronic-signature system, which usually sends the signed forms back to the appropriate party.

“Attorneys still require physical signatures so your agent will work with the closing attorney and FedEx all the necessary documents to you ahead of the closing,” says Kaderabek. “The agent then goes to the closing table with the closing documents—without the buyer—and the funds are wired to complete the transaction.”

The Bottom Line

Buying a home remotely can be a good option for second-home buyers, parents who want to buy homes for their children, and out-of-state real estate investors. In many ways, the process is the same as buying a house in person, However, you will depend even more on your real estate agent to find the right home, be present for the inspections, guide you through the paperwork, and attend the closing.

As such, finding the right agent—one who has experience with remote transactions—is one of the most important steps you can take when buying a house remotely.