How to buy a house online: What to know
These days, you can find pretty much anything for sale online. Yes, even homes. Not only can you find homes for sale online, but you can also carry out the entire purchasing process online, too - without even seeing the home in person if you really need to move fast. Buying a house online isn’t for everyone, but it’s a useful resource to have available for any prospective homebuyer.
Buying a house online is easier today than ever before and it’s not just for investors or corporations - anyone can handle the entire homebuying process online. In the pandemic-era new normal, real estate agents and mortgage lenders alike have become more flexible as remote work has inspired many people to relocate further from their jobs and buy homes in different states, sometimes without even seeing them first.
With more online real estate services (including power buyers) devoted to homebuying, anyone can buy a new home online in a process that doesn’t feel too different from the traditional method. But just because you can, doesn’t mean you should.
Getting a house is both exciting and stressful, and it makes sense that you’d want to get it done as quickly and seamlessly as possible. Buying a home online can be the quickest option, which can come in handy if you’re eager to move to a new state or city or you have to relocate for work, but it isn’t always the right move for everyone.
Buying online is a bad idea for you if:
Online homebuying is for people who are comfortable with making a new real estate purchase with minimal help or have their own assistance in place to guide them through buying property in a new place, sometimes without having seen it.
Buying online may be right for you if:
There are a few different ways to buy a home on the internet. You can buy a house that you find online, site-unseen, through a homebuying website or look for foreclosure properties on online auction sites.
Modern tech-real estate companies, like Zillow and its competitors, not only allow you to browse and search for houses online - they can also help you carry out some, or all, of the actual buying-transaction on their site, too. Some companies and sites have more services and capabilities than others when it comes to online homebuying, like allowing you to get a mortgage or title insurance online at the same time.
Everyone has an idea of their dream home, right? Well, when it comes time to buy a house, you want to get as close to that ideal as practically possible. However, houses are expensive so you’re bound to make a few sacrifices.
When buying a house online, you can easily sort by the most important data points. Some of the most important items to consider include:
When you can establish definite minimums, it will help inform your search and give an agent some guidance to show you the right homes in a given area. Everybody is different and one person’s need to have a covered garage might just be a want for you. Take some time to jot down the most important elements of a home in your opinion and break them into “needs” and “wants.”
Even if you’ve been assigned to a new office in a certain city, that doesn’t necessarily mean you have to live there. This is why it’s particularly useful to find a local agent (we’ll get there in a moment) to give you a primer, but before you do, you can still do plenty of research on a given area online.
Again, think about what’s important to you. Information about school districts, walkability, commute time, and neighborhood amenities is easy enough to find online and will help you, at the very least, eliminate towns and neighborhoods you definitely don’t want to live in.
If you can, talk to people who have first-hand experience with the area you’re looking at as real-life testimonials are often stronger than what you can find online.
→ Learn how to choose house location
Just like the traditional homebuying method, when you’re ready to get serious about buying, you need to find a lender. A mortgage is a 15- to 30-year commitment so you don’t want to be hasty. Spend a little time shopping for a lender with a great reputation for supporting online purchases and competitive rates. Remember, even a slight difference in interest rates could add up to thousands of dollars over a 30-year period.
When you’ve found a lender you like, you must get pre-approved for a mortgage. The preapproval process helps you figure out how much home you can afford and gives you documentation that proves you’re a serious buyer capable of getting a mortgage for the amount you need to buy a home. Pre-approval is essential when you start actively searching for homes to make an offer on.
It’s also important for online buyers to note that conforming mortgage limits vary by state - even on some government-backed loans. For instance, the conventional loan limit in Massachusetts is much higher than in Ohio, so you could qualify for a higher mortgage with a lower down payment. As such, it’s important to get pre-approved in the right state, as your buying power could vary significantly.
To get pre-approved, you typically need to submit pay stubs, W-2s, and tax returns. You can do this in as little as ten minutes with Orchard Mortgage without a hard pull on your credit score. (And when you buy a house with Orchard you'll get no-fee refinancing for the lifetime of the loan, which can come in handy if mortgage rates go down in the years to come.)
Once you know what you want from a home and the general area you want to buy, it’s time to find a real estate agent to help you get the real scoop on the local market. A real estate agent is always useful for helping you find properties, write competitive offers, and facilitate closing, but they’re even more useful when you’re buying online.
For one, many home sellers are suspicious of online buyers who don’t use an agent. With the sheer volume of scams out there today, who can blame them? Agents add legitimacy to your interest.
Second of all, agents know their areas much better than you or any online research will be able to deduce. They know common issues that happen with homes in the region, they know the most desirable neighborhoods, and they have a general idea of the investment potential of different areas. Your agent will see the house before you and has a fiduciary duty to advise you in this enormous financial decision. If they find something out of the ordinary in a house, they can help you adjust your offer accordingly.
Don’t just hire the first agent you call. Take some time to interview agents and make sure the one you choose has experience working with remote sales.
→ Here are 19 questions to ask when buying a house
You’re certainly welcome to let your agent do the searching for you, but you can also use many online resources to help you find interesting properties. Filter by your budget, needs, and wants to narrow down your search and give your agent more ammunition to work with when looking for a home. Homebuying sites like Zillow, HomeLight, and RedFin make home searches easy, but your agent can also give you direct access to the Multiple-Listing Service (MLS). Online home listings may not always be up to date, and your real estate agent can give you the most accurate information.
When you’ve found a few homes you’re interested in, set up a virtual tour with your agent. Many homes on the market have pre-recorded tours readily available, but you can also do a video call with your agent as they walk through the house during an open house. (This way, your agent can answer specific questions you might have or testify to the condition of the home.) If you're able to, always try to go on a hometour in-person.
→ Going on a home tour? Here's what to look for
Just like the traditional process, when you’ve found a home online that you love, it’s time to make an offer. Your agent will facilitate this process and help you make an informed decision on how much to offer.
Even some parts of the the normal homebuying experience occur online, so coming up with an offer letter and submitting it should be a breeze. Your agent will handle sending the letter, communicating contingencies, and anything else you’d like to express to the listing agent. If your offer is accepted, it’s time to move into the closing process.
Most often, a third-party conducts a home appraisal that determines the “real” value of the home. If the appraisal comes in much lower than your offer, your lender may not approve your full mortgage amount. Much higher, and the seller may decide they can get a better offer elsewhere.
Then, the home inspection takes place. Unless you waived it as part of your offer - which you really shouldn’t if you’re buying online. In a typical sale, a home inspector will walk you through the home and perform the inspection with you present so you can understand any issues that arise. With an online purchase, this isn’t always possible, so you should ensure that your agent is present to take notes, photos, or videos of the inspection. You’ll still get a detailed report via email that you should carefully analyze to understand the condition of the home and any maintenance or repair costs you have to prepare for.
→ Learn why you shouldn't waive your inspection contingency
When the appraisal and inspection are completed to everyone’s satisfaction, your mortgage lender will underwrite your mortgage by assessing your financial records and finalizing the paperwork you’ll need at closing.
The final steps of a real estate transaction are especially important when you’re buying online because, in many cases, you won’t actually see your new home until you move in.
If you’re buying in person, you might not worry too much about a final walkthrough. If you’re buying online, don’t skip it, especially if you’ve negotiated that the seller will make certain repairs.
The final walkthrough is your last chance to see that the seller has held up their end of the bargain and that all major systems and appliances are still working correctly. If, for instance, the heating system is suddenly broken, you can hold up closing to make sure it’s fixed before you move. You don’t want to move into an uncomfortable home.
You can trust your agent to do this, or you could go and see the place yourself before closing in person.
Related: Can you back out after a final walkthrough?
While most home closings don’t happen literally “at the table,” closing documents must be notarized, which requires the physical presence of a notary. Most states allow remote online notarizations but not all.
If your state doesn’t allow remote notarizations, you’ll need to get in touch with a notary, then mail the documents to your agent to get them signed on the other end. You might have to designate your agent as a local legal proxy, too.
If you can do it all remotely, then don’t worry about doing anything extra.
→ Learn about the full closing process
Whether you’re doing it remotely or via mail, make sure your down payment and closing costs are ready to go, complete the necessary paperwork, and get ready to finally move into your new house.
Buying a house online isn’t too different from a traditional homebuying experience. The most important distinction is that it’s very important to find a trustworthy local real estate agent when you’re buying a house online. This person will be your lifeline and a trusted advisor to make sure you find a home that you really love. After all, the point is that you don’t have to see the house before buying, so make sure you cover all of your bases before you make a huge financial decision based on another person’s perspective.
When you buy a home with Orchard, you'll get the best of both worlds. You can browse homes for sale online, and we'll also match you with a real estate agent with expert knowledge of the local housing market. Plus, you can easily request to see the home in person, and our unique dashboard simplifies the process of homebuying all into one easy place online. Get started.
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