Buying a House Out of State? Follow These 8 Tips to Prepare
Have you ever thought about living somewhere else? No, we’re not talking about another city, an upgraded house, or your neighbor’s home down the street that went up for sale. Somewhere far…. Far, far away. Well, your name doesn’t have to be Dorothy to leave Kansas.
Though all 50 states are united, each state has distinct characteristics and traits that make them unique. For example, the nickname for California is the Golden State, known for its vibrant ocean coast and laidback vibe. On the other hand, New York is known as The Empire State, famous for its historical architecture and buzzing streets. If you could, in which state would you buy a home?
For those who are 100% set on buying their next home in a brand-new state, we are super excited for your soon-to-be journey. No matter your reason for relocating, moving far away from your original home can be frightening, especially if you rarely move, let alone long-distance. Before you start packing your boxes, follow these eight tips on buying a house out of state.
1. Why are you moving?
First things first, let’s get to the foundation of your plan. Understanding the primary reason you are moving will allow you to perform initial research on the higher-priority items. For example, are you relocating for your career or higher education? If so, your research should include properties near your new workplace, educational institution, or nearby transit service.
If you are moving to experience life in another state, then your house search will probably broaden and provide you with more options, including hobbies and lifestyle.
2. Think about future plans
Now, let’s think about your long-term plans after your new move. Are you planning to have kids? Is your relocation only temporary, meaning you plan on moving back after a few years? Thinking ahead on upcoming milestones in your life will tie into your overall preferences. For those planning to have kids after moving, your research should be looking at high-rated school systems or friendly neighborhoods with parks.
If your relocation is temporary, you can probably reduce the budget of your new home since you know it won’t be for life. And since it’s solely for the sake of adventure, you might want to look at places either in the city where almost every store is only a walk away, or the suburbs, where plazas and shopping centers are prominent. You can also factor in properties that offer amenities, paid through an HOA such as a pool, tennis courts, laundry services, golf courses, and more.
3. Research the state
Researching the state is one of the most important items to cross off on your relocation to-do list. When you plan a vacation, do you just jump on a plane and wait to be surprised? Maybe, depends on how adventurous you are! When making a big decision such as relocating, planning ahead reaps high rewards and it is necessary that you carefully research the state you are moving to.
When researching, you will need to think about the weather, policies, history, culture, opportunities and so much more that could differ from your current living situation.
4. Find a top real estate agent
Your cousin’s best friend may be a nice guy, but when it comes to one of the largest financial investments you’ll make in your lifetime, you’ll want to rest assured you are in the best hands possible. To find your dream house in the new state, you’ll need a little help along the way and you’ll want to establish a power team to help you achieve your big move seamlessly. We recommend researching top-producing real estate agents in your desired area. Why a top-producing real estate agent? To start, only an experienced, localized real estate agent will be able to cater to your preferences in assisting with your home search. Realtors do much more than find the home. They help navigate you through the entire homebuying process from start to finish.
When finding a real estate agent, reach out to a few you think would be perfect for the job and ask about their experience with relocations. Some may have worked with past relocating clients and would have the right expertise to help you with similar needs.
Another good characteristic is a tech-savvy agent. This will be explained in more detail later, but long story short, it will be crucial for the agent to show you properties virtually and have great communication based on potential different time zones.
5. Find a good mortgage lender
Finding the right mortgage lender holds the same value as finding the right real estate agent. One thing to note is that usually, most lenders will want you to live in a state for at least 2 years before financing a home there. If this is the case with your mortgage lender, they can discuss with you how to fulfill this condition, the most sensible idea is probably renting before you buy. You want to ensure that your mortgage lender provides you with several options that will fit your family’s short- and long-term goals. Keep in mind that mortgage interest rates, loan limits, and loan programs can vary by state, so be sure to ask your mortgage lender if there are any requirements or procedures you are not aware of to avoid surprises.
Apart from that, your mortgage lender should be well-educated in their local area, have a high rating on customer service, and similar to your real estate agent, have experience in relocating clients. Other characteristics that you should look out for in a mortgage lender can be found here.
6. Explore house options
Here comes the fun part: looking for the right home! After choosing your real estate agent, you should now begin to relay what you’re looking for in your new home. Try not to leave out any details because this is where you’ll be living in your new state, so it’s completely fine to be as specific as possible. Keep in mind that there are also valuable real estate apps where you can conduct a filtered home search in the area you’re looking to purchase. Though, realtors typically know neighborhoods well enough to advise on where you should narrow down your online search.
There are a few ways you can check out the house in case you’re unable to physically travel to the state yourself. Realtors can show you a virtual tour of the house by simply FaceTiming you or recording it with their cellphone. Most homes now also offer a Virtual Tour with a new technology called Matterport, offering a platform to view a property as it transforms real-life spaces into an immersive digital model, panoramic scans, and allows you to interact in the home in a 3D model. You can also use this to measure the rooms to plan for your furniture. Did you know two-thirds of homebuyers in 2020 made offers sight unseen (Redfin, 2021)? With today’s technology, it is as if you are walking through the home yourself!
If you can travel to the state, we advise to stay for a couple weeks, if possible. Looking at your options in person will allow you to check out the safety of the neighborhood as well as nearby shops and stores that you’ll find yourself frequenting.
7. Verify your employment
Figuring out your job situation before moving to another state is just as critical as finding a new home. If you are opting in for a mortgage, this step should be confirmed before you choose your mortgage lender. Why is this?
Mortgage lenders will need to verify your employment and income are stable. You may need to explain your job transition to your mortgage lender to confirm that you will be employed in the new state. It puts you in a better position to qualify for a mortgage if your new job is in the same industry or line of work and provides a similar or higher pay.
Graduating college and looking to move? No problem! Typically, you need 2 years of history of employment to qualify for a mortgage – but if you just graduated college and got a job offer in a new state, we can use your college education as your employment history! Congrats Grad!
8. Take action on your current property
Own? Rent? Live for free? If you’re currently renting or living rent-free, then this will be a breeze. Assuming your lease is up soon, all you would need to do is follow the procedure given to you by your landlord to officially be removed from the lease.
If you own your place, you have three viable options:
Sell. If you own your home outright or owe less than what it is worth, then selling your place can be a great way to earn some cash to put towards your new home.
Keep. Assuming you have the financial capability to do so, you may qualify to keep your current residence and finance a new home. The new home would qualify as your primary residence, capturing the great interest rates and programs, and the departing home would turn into a second home. You wouldn’t need to do anything to switch it, even if you bought your current home as your primary residence.
Rent it out. Renting out your current/departing residence can be a great way to diversify your real estate portfolio, increase cash flow, create a new stream of income, and have renters pay down your principal balance as the home continues to appreciate in value.
Good Luck with Your Move!
We know that buying a home for the first time can be nerve-wracking, so buying a home in another state that you are not familiar with can be on a whole other level. As long as you’re well-educated on what steps to take to prepare yourself, then you’re putting your best foot forward.
Remember to consult with family and friends that have moved out of state before. Since they’ve been through a similar process, they will have sound advice that you can take with you on your upcoming journey. Your real estate agent and mortgage lender, given they’re experienced with relocation, will be a great source of information as well.
To make sure your moving process is as seamless as possible, check out our move-in checklist to ensure you are ready for your big day or find out when’s the best time to buy your new home.
