How To Buy A House Out of State?

Whether relocating within the same state or moving across state lines, shifting homes can be both exciting and overwhelming. However, if you’re buying a home in another state, the process may involve additional complexities — and it may not be as smooth as moving within the same state.

If you’re planning to move out of state, be prepared for certain challenges. Here are some essential steps to help you make the right choices when purchasing a house in another state.

What You Should Do While Relocating to Another State

Step 1: Choose the State

The first question you need to answer is: Which state do you want to move to? Your decision may depend on factors like a new job opportunity in another state or a desire to move closer to family.

If there are no specific criteria and you’re free to choose, consider important factors such as your budget, lifestyle preferences (city life or countryside), availability of employment and educational opportunities, potential for personal and professional growth, and the local climate.

The decision may not be easy, but it’s the most crucial step. So, take your time and approach it patiently.

Step 2: Decide What Happens to Your Current Home

The next step is deciding what to do with your current home. You can either sell it or rent it out. If you’re already renting your current place, this step will be relatively simple.

If you’re a homeowner, you’ll need to choose between selling or renting. Renting the property can provide a steady income, but it also means you’ll be responsible for ongoing maintenance, mortgage payments, insurance, property taxes, and management costs.

If you choose to sell, you’ll have additional tasks on top of buying a new home. In such cases, it’s a good idea to consult mortgage experts, such as Total Mortgage, for guidance and assistance in selling your existing property.

Step 3: Budgeting

Once you’ve decided what to do with your current home, the next step is setting a budget for your new home. As a prospective homeowner, you can use online mortgage calculators, like those from Total Mortgage, to get a better idea of what you can afford.

Key factors to consider while budgeting include:

• Your income
• Saved down payment amount
• Closing costs
• Homeowners insurance
• Property taxes
• Homeowners association (HOA) fees

Also, think about the size of your household, including children, spouse, parents, or other family members, as this will influence the type and size of the property you need.

Step 4: Do the Groundwork

Once you know your budget, it’s time to research neighborhoods that match your financial range and lifestyle needs. Keep in mind that the cost of living in your new location will likely differ from what you’re used to.

Beyond property prices, evaluate other critical aspects such as:

• Quality of education
• Access to healthcare
• Childcare facilities
• Grocery and utility costs
• Property taxes
• Transportation and commuting options
• Entertainment and lifestyle amenities

Step 5: Work With a Real Estate Agent

While you can search for homes and handle paperwork independently, doing so can be time-consuming and stressful, especially when you’re also planning a relocation. That’s why partnering with a local real estate agent is usually the best approach.

Even a small agency with strong local knowledge can be extremely helpful. They understand neighborhood dynamics, housing market trends, property values, and can guide you toward making informed decisions.

Tips for choosing the right real estate agent:

• Look for agents with a strong track record of successful deals.
• Review their professional certifications and credentials.
• Choose someone who specializes in the local real estate market.
• Ensure they communicate transparently and effectively.
• Consider agents experienced with clients similar to your situation (e.g., families, same-sex couples).
• Read online reviews, check neighborhood forums, and verify listings before making a final choice.

Step 6: Get Mortgage Preapproval

The next key step is obtaining a mortgage preapproval. This is an estimate from a lender indicating how much they may be willing to lend based on your financial situation, credit history, income, and debt-to-income ratio.

While preapproval is not a loan guarantee, it helps you understand potential loan amounts and interest rates, which can strengthen your position when making an offer.

Step 7: Visit the City and Homes

Once preapproved, you can start exploring neighborhoods and properties either virtually or in person. If you’re working with an agent, they can arrange virtual tours. However, in-person visits are always recommended when possible. Seeing the property and neighborhood firsthand, both during the day and at night, can provide valuable insights that online listings can’t.
Step 8: Make the Offer

After completing your research and selecting a property, you’re ready to make an offer. Ensure you understand the current market conditions, seller’s asking price, terms, and closing timelines. Negotiate thoroughly and review the purchase agreement carefully. Once both parties agree on the terms, you can sign the agreement.

Step 9: Close on the New Home

With mortgage preapproval, finalizing your loan should be relatively straightforward. After applying, the lender will complete underwriting, inspection, and appraisal. With your agent’s help, you can close the deal virtually or in person.

Step 10: Start the Relocation Process

Once the home purchase is complete and the agreement is signed, it’s time to focus on the move. Look for a reliable and cost-effective relocation service provider to assist with packing and transportation.

Things to Remember

• Buying a home in a new state with mortgage financing can be a time-consuming process.
• Securing a mortgage may be more challenging if you’re moving without a job offer.
• There may be a period of overlap between selling your old home and purchasing the new one, meaning you might face higher monthly payments temporarily.
• The down payment requirement for the new mortgage could be higher.

If you decide to rent out your current property, you may need to refinance with a non-owner-occupied mortgage, which typically has higher interest rates, shorter terms, and stricter credit requirements.

Moving Out of State? Be Prepared

Buying a home out of state can be a rewarding experience if you’re well-prepared. Having a clear plan of action will make the transition much smoother. For expert guidance and support throughout the process, consider consulting with professionals like Total Mortgage.