An Uptick in Sight Unseen Purchases Indicates Opportunity for Agents
While purchasing a home before seeing it in person, or buying sight unseen, certainly isn’t new in the world of real estate, it’s quickly become more mainstream. Some wealthier buyers and investors have long made a habit of purchasing largely off the recommendations of their teams and an array of photos, but they are often steered more by profit goals such as average rent in the neighborhood or price-per-square foot.
For the average buyer, purchasing a home is a much more emotional process. Most homeseekers prefer touring the property in person, peering into closets and checking carpet quality up close. After all, this may be where they plan to raise children, accumulate wealth, or retire. So, why do nearly two-thirds of all buyers now feel comfortable submitting an offer sight unseen? It’s partially due to the global COVID-19 pandemic, but largely thanks to the work of dedicated real estate agents.
Buying Sight Unseen
In 2018, well before the COVID-19 pandemic, more than half of the agents surveyed by Realtor.com reported that they had worked with at least one buyer who was purchasing a home without seeing it first in the six months leading up to the survey. The same survey found that 20% of buyers had submitted an offer on a home before even setting foot inside. While that figure grew to 32% in 2019, buying sight unseen was still relatively rare. More than two-thirds of buyers were still taking the traditional approach to real estate, touring homes in person and making subsequent offers.
With 2020’s nationwide shutdowns, these figures essentially flip-flopped. As open houses and tours were canceled or severely limited, new work from home policies and record-low interest rates massively drove demand across the country. Buying a home sight unseen quickly became commonplace.
At the end of 2020, a whopping 63% of buyers reported making an offer on a home before seeing it in person. This figure is the highest reported since Redfin began gathering data in 2015, and it promptly demolished July 2020’s record high of 45%.
Leading the charge are tech-savvy millennials, who seem to be taking this new approach to real estate in stride. In March 2021, a significant 80% of those born between 1981 and 1996 reported that they could be persuaded to buy a home sight unseen. This isn’t necessarily surprising, as millennials now make up the largest portion of homebuyers while facing growing demand, limited supply, and record student loan debt.
Sight unseen buyers of all demographics (and their agents) will no doubt need to stay quick on their feet moving forward. According to Daryl Fairweather, Redfin’s chief economist, the phenomenon of buying sight unseen is unlikely to slow. Fairweather predicts that similar momentum will continue through 2021, and a majority of buyers will be forced to make an offer before seeing a home in person this year. She cites an established comfort with virtual tours and the influx of out-of-town buyers amid a big city exodus applying pressure to markets across the nation.
Just last year, 28% of buyers on Redfin planned to relocate, a record high. That figure grew 2% in one year alone and is likely to increase further through 2021. The result is cutthroat competition even among sight-unseen sales. Redfin reported that 20% of successful 2020 buyers had resorted to waiving their home inspection to tip the scale in their direction, up seven percentage points from 2019.
How Agents Can Assist in a Sight Unseen Sale
So, how exactly can real estate agents best serve their clients when it comes to a sight-unseen sale? One of the most helpful approaches you can take is utilizing various forms of househunting tech. Photos and video calls are essentially the bare minimum today, but you can also explore virtual staging, virtual reality, and more to help your client visualize the property in its entirety without leaving the couch. While this technology may seem intimidating at first glance, rest assured there are plenty of unique, creative tools for any skill set and budget.
You’ll also want to ensure your client can “see” the home at different times of the day. Morning light will likely make the space look different than late afternoon, particularly if all or most of the windows face the same cardinal direction. Not to mention, photos can lie. Between wide angles and high exposure, it may be hard for homebuyers to understand what the home actually looks like. Graham Candish, one such buyer, purchased a New York Tudor, sight unseen, from across the globe in 2018. While overall happy with his purchase, he did notice that the basement was particularly dark upon moving in. “Much more so than in the photographs,” said Candish. “They massively overexpose the photographs and turn on all the lights. You get there in person, and it’s not as bright as you’d imagine.”
While you’re at it, tap into other senses that your client can’t. Candish was also a bit surprised to find that “it smells like a basement,” an effect that certainly can’t be conveyed in photos. Whenever possible, tour the property yourself and make note of attributes, like funky smells, that don’t translate well digitally so that you can share these insights with your clients. Noise levels might also vary. For example, perhaps a nearby school lets out at a certain time each day, or the nightlife scene heats up after dinner. In-person tours could clue clients into these aspects but, from behind a screen, they’ll need your help in getting the full picture.
In the same vein, some agents choose to virtually walk clients through their potential new neighborhood. After all, the real estate adage “location, location, location” rings true both virtually and in person. “I always, always, always show [clients] around the neighborhood,” said Lindsay Katz, an agent in Sherman Oaks, California. “If there are issues with the inside of a house, they can get those fixed, but they can’t fix a neighborhood.”
Finally, be sure to provide precise measurements. Typical real estate photos, often taken with a wide-angle lens, can seriously overinflate the appearance of a space. A client might assume their sectional can fit in the living room only to find that it’s six inches too long after lugging it cross-country. If possible, offer a detailed floor plan or take measurements so your clients can get an accurate idea of their potential future space.
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