Brokerage Survey: 45% of Contracts Are ‘Sight Unseen’ | Realtor Magazine
Virtual tools have helpedg home buyers feel more comfortable shopping online to choose a home and even make an offer, without first stepping inside. The real estate brokerage Redfin says the trend of “sight unseen” offers is reaching record highs.
Redfin reports that 45% of its consumers who purchased a home in the past year made an offer on a property without first seeing it in person. That is up from 28% in 2019 and the highest share since at least 2015, when Redfin first started collecting such data.
Redfin commissioned a survey in May and June of more than 1,400 consumers from across 29 major metros.In a separate survey conducted by realtor.com® in April, shortly after the coronavirus outbreak in the U.S., 24% of 1,300 consumers surveyed said they’d be willing to buy a home without first seeing it in person.
Real estate pros cite health concerns around the COVID-19 pandemic and heated competition from a shortage of homes for sale as reasons for the sudden urgency from buyers. Real estate pros are increasingly turning to virtual tours and a video walk-through to guide skittish buyers through homes.
Sight-unseen offers will likely climb over the next few months, predicts Daryl Fairweather, Redfin’s chief economist. “I predict that by the end of the 2020 homebuying season, the majority of home buyers will have made a sight-unseen offer,” Fairweather says. “The pandemic has changed the way many people view homes, and on top of that, the market is highly competitive. If you aren’t using this strategy, another buyer who is could beat you to the punch.”
While the offer might come before the buyer has seen the property in person, they do often visit the property before completing the process, real estate pros say.
These transactions can turn tricky when they don’t visit. Real estate pros say that buyers don’t always stick to agreed-upon timelines and may submit high offers just to remain in a bidding war but eventually back out after more carefully weighing their decision, real estate pros say. That has prompted some home sellers in Los Angeles to even refuse to consider sight-unseen offer altogether.
“FaceTime is pretty good, but it’s typically better for everyone if the buyer can see the house in person,” says Lindsay Katz, a Redfin real estate pro in the Los Angeles area. “Most people who make sight-unseen offers find a way to visit the home before actually closing the deal, even if it’s just a few days before getting their keys. If the pandemic gets significantly worse, that could change.”