Yes, you can buy a house in another state as long as you have the money to do so. No law says you must live full-time in a state where you own property, and it’s very common for homeowners and investors to own houses in multiple states. You can even purchase property in another country if you so choose, although that presents even more logistical challenges.
You can also get a mortgage in one state even if you live in another. However, you should research the requirements of the lender. Small banks and credit unions may only work with local homebuyers, but national and regional lenders typically won’t care as long as you meet the financial requirements.
- Do Your Research
- Create an Action Plan
- Find a Good Real Estate Agents
- Visit the Area
- Obtain Financing
- Close on the Sale
1. Do Your Research
The first thing you need to do before buying a house out of state is to research the process. Purchasing a home in another state requires more planning than buying locally, so it's important to be prepared. How much research and what you’ll need to know will depend on the purpose of the property.
For instance, if you’re buying a rental property, you want to thoroughly research the housing markets and price points to ensure it’s a sound investment. If you plan on buying a pied a terre or vacation home, you’ll likely want to research prime locations and attractions. Whatever you’re planning, make sure to research the local real estate laws, property tax codes, and other information that may be useful.
2. Create an Action Plan
Creating a solid action plan before buying a home out of state is also important. Buying a home is a significant responsibility, especially when it’s not immediately accessible to you on a day-to-day basis. So, you’ll want to have a plan in place before making a purchase. If you don’t plan on permanently relocating to the home, you’ll want to consider how you’ll take care of maintenance, lawn care, paying utilities, etc. You’ll also want to consider how you plan to purchase the property and what you will do after closing.
3. Find a Good Real Estate Agent
Hiring a good real estate agent is essential if you plan on buying a property out of state. Unless you plan to temporarily relocate to the area while home shopping and closing on the property, you’ll want a trustworthy representative to help you handle business. Plus, chances are, you won’t have as much knowledge of the local market, so it will help to have someone in your corner who knows the area very well.
4. Visit the Area
Even if you aren’t planning on permanently relocating to the new location, you’ll likely want to visit so you can look at properties and get a feel for the area. Certain tasks can be handled remotely, but before you sign on the dotted line, you’ll likely want to visit the property. Photos and videos can sometimes be deceiving, and you can’t necessarily trust everything you see or read online. So, it’s wise to visit the area before you close on the home, preferably before you make any commitments.
5. Obtain Financing
Unless you plan on paying cash for the home, you’ll also need to obtain financing to buy a home in another state. Although it’s relatively easy to get a mortgage for a home out of state, you will need to do some extra research. Research mortgage lenders who are licensed in the new state. You should also call them directly or check their website to ensure they will work with out-of-state homebuyers. But from there, it’s the same process as obtaining a mortgage anywhere else – fill out the paperwork, submit your documents, and wait for pre-approval.
6. Close on the Sale
Once you’ve obtained financing and found the perfect property, all left to do is close on the sale. It may be wise to make arrangements to be physically present during the final walkthrough and closing process so you can handle any last-minute issues. But if not, you can also arrange a remote closing and wire the necessary funds. This is where having a trustworthy real estate agent will be crucial, so you have someone nearby to help you overcome any obstacles.
Buying a house in another state isn’t as complex as you might think, although it does require additional planning and research. But as long as you’re willing to do the work and take the necessary steps to avoid headaches, the process isn’t much different than purchasing any home.