Sight unseen offers on the decline in recent poll
One in five homebuyers made an offer on a listing without seeing the property in person, according to the real estate brokerage Redfin. However, this was down sharply from the previous year, when more than one-third of buyers considered buying a home sight unseen.
In May, Redfin surveyed 4,264 people in 14 major metro areas who said they had bought or sold a home in the past year, or planned to do so in the coming year. The report on sight unseen offers focused on 1,463 responses from people who said they had purchased a home in the past year.
Twenty percent of respondents said they had made at least one offer on a home they hadn't visited in person. This was roughly equal to a similar survey in June 2016, when 19 percent said they had made a sight unseen offer, but down from 33 percent in May 2017 and 35 percent in November 2017.
Sight unseen offers often occur because a buyer does not want to miss the opportunity to buy a home. As such, they are more prominent in competitive markets where listings garner multiple offers and are sold quickly. Sight unseen offers are also more common when a buyer is contemplating a long distance move, since it is simpler than taking a flight or lengthy drive to visit homes.
"Now that most homes are staying on the market for longer than a week, there just isn't as much pressure for buyers to make offers so hastily," said Jessie Culbert, a Redfin agent in Seattle. "That's a big change from earlier this year when sellers set offer review deadlines, and they were strict! This meant that whether or not you had time to physically step inside the home, you had to get your offer in on time in order to be considered. Otherwise you would miss out entirely on the opportunity to compete for it."
Photos in a real estate listing can give a good overview of the property, and some companies also offer video tours or other virtual walkthroughs of a listing. However, these resources might conceal certain defects such as mold or an unpleasant odor. Visiting a home lets you take a more comprehensive look at the residence and its neighborhood.
Redfin suggests that the decline in sight unseen offers reflects a gradual shift in the market. While buyers were more motivated to make a sight unseen offer when price gains and rapid sales were favoring sellers, an increasing number of available listings and a slowdown in price growth are offering more advantages to buyers. As such, buyers have more options and can take the time to review the available homes in person.
The brokerage says sight unseen offers will likely become more common, regardless of market fluctuations, as virtual tours become more reliable. However, it also suggests that the drop in sight unseen offers in the spring was an early indicator of a market shift. It plans to conduct another survey on sight unseen offers this fall to see if their prevalence continues to change.
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