Buying Houses Online: the Pros And Cons of Online Buying for Nonresidents
Is it even possible to buy house in USA online? Yes! However, the process has its pros and cons.
We already discussed whether a nonresident can invest in the US real estate market and buy house on US soil. The answer, of course, was yes, absolutely.
Today, we’re diving a bit deeper into the issue of how you can actually do it.
As you probably already know, the US is an entirely liberal, open market. Everyone, foreign investors included, is invited to take a spin on the carousel that is the US real estate market.
As foreigners, nonresident home buyers have a slight disadvantage compared to US residents. When purchasing property, nonresidents don’t have the convenience of being on location. US residents can call a local realtor and see what’s available to them. They can investigate the market, compare prices, shop around, and get inside information from agents.
Meanwhile, you’re sitting at your computer, wondering whether you can invest in US real estate market without having to spend an arm and a leg on visa fees and airplane tickets to go back and forth every time you need to look at a specific property.
Well, once again, NRI has excellent news for you. You can.
In fact, you can do it in multiple different ways. One of them is to buy house in USA online.
The Wonders of Modern Technology Let you Buy House in USA Online
Buying houses online in the US isn’t a novel concept. Ever since the internet took the world by storm a few decades ago, we, as a society, have been slowly but surely shifting aspects of our lives online. So, nowadays, we buy practically anything and everything online. This year e-commerce sales will most likely reach $6.5 trillion.
Over the past five years alone, online sales volumes, in general, increased by a whopping 218%, and the number of shoppers who buy things online increased by 40%. And if you think there’s a limit to what we will buy online, trust us, there isn’t.
For example, during the pandemic, tech-savvy shoppers took advantage of the hot market and bought houses online.
Zillow, one of the most famous real estate online marketplaces, has seen a 41% increase in traffic year after year during the COVID-19 outbreak. What’s more, it’s reported that millennials, currently the largest population segment in the US and the largest contingent of home buyers, were not shy when it came to using their know-how and utilizing their skills not only to find but also to buy houses online.
Just to paint the picture, in November and December of 2020, 63% of home buyers were willing to (or did) put an offer on a house they’ve never seen in person.
Now, what does this mean?
Well, in simple terms, it means that the millennial generation is putting even more pressure on the real estate market by buying houses online. But, more importantly, it means that buying houses online isn’t such an unimaginable thing anymore. You can even sign the contract for the purchase using various online signature platforms. Legally, contracts signed online are as legally binding as the ones you sign in person with a pen on paper.
This isn’t exactly a novelty. In 2000, the government passed the ESIGN Act, which states that if all parties choose to sign a contract electronically, then that contract is legally binding. The ESIGN Act (the Electronic Signatures in Global and National Commerce) and the UETA Act (or the Uniform Electronic Transactions Act) ensure that the contract you sign online will be valid.
So, the answer to the question of can a foreigner buy house in USA online is a definite yes.
But should you?
Let’s look at the pros and cons, shall we?
Buy House in USA Online | The Pros
A Matter of Convenience
If you’re considering an investment in the United States, you probably already have some capital set aside. However, you didn’t get where you are today by wasting money.
Therefore, the most significant pro of buying houses online – convenience – is probably quite appealing to you.
When you browse properties online, you’re doing so at a time when it’s the most convenient for you. What’s more, you’re doing it from the comfort of your home. You don’t have to go anywhere.
This also allows you to see a large number of properties in a short while. Thanks to the already mentioned pandemic-induced online buying trend, most homes listed on popular and reputable multiple listing services have a virtual tour included in the listing. That means you can see practically every nook and cranny of the property you’re looking at.
You’re Not Wasting Time
When it comes to snatching the best deals on the US real estate market, timing is essential. According to the data from Realtor.com, the average time a house spends on the market is 61 days.
By looking (and buying) houses online, you can compare home prices, check out properties, set up inspections, and even go through real estate transactions in a matter of days. So, you’re saving precious time and giving yourself an opportunity to take advantage of a potentially good deal.
You’re Saving Money
Online home searches will definitely save you money. Depending on where you’re from, you may have to get a visa to enter the States. That can be not only a costly but also a lengthy process. What’s more, even if you don’t need a visa, you need to pay for travel costs and accommodations.
However, that’s not all. If you’re traveling to the US to look at a specific property, you’ll probably have the good sense to check out multiple properties at the same time. Arranging multiple viewings on the same day is practically a mission impossible, which means you’ll also have to pay for accommodations as well.
So, if you opt to buy house in USA online, you’re saving a lot of money. Of course, the entire process isn’t without its downfalls, but we’ll discuss those later in greater detail.
You’re In Control
Another major advantage of buying houses online is that you control the entire process. You do the research and reach out to potential sellers without having to rely on a realtor.
Of course, this can be a proverbial double-edged sword, given that it blocks you from accessing certain information realtors have.
Finding Off-Market Deals to Buy House in USA Online
Buying properties online isn’t just a matter of going for the most convenient option. Spending your capital gains online can also help you find off-market properties.
Off-market deals are those that aren’t listed on multiple listing services. Those are the deals that don’t have high visibility, so your competition to get them won’t be as stiff.
Unearthing these details isn’t an easy feat. It’s most easily done by networking with other investors, reaching out to contractors, or knowing which realtors will share their buyer and seller lists with you.
That is actually something that NRI can help you out with, as it’s an essential part of our service. We have steady and strong working relationships with:
- real estate brokers
- investors
- contractors
- wholesalers
- contracting agencies,
- etc.
So, we pretty much already know how to make an off-market deal happen for you.
However, finding off-market deals on your own is also possible if you utilize the power of the internet. Direct email marketing and virtual “driving for dollars” (which, in physical reality, means that you drive around neighborhoods you want to buy in and look for potential deals) are some of the best ways to do it.
Buy house in USA online with our help.
Nothing Is Off Limits
Finally, we can’t avoid mentioning the last advantage of buying houses online — being able to do everything (and we do mean everything) online.
If you want, you can buy house in USA online, without ever stepping foot in it. You can:
- browse homes for sale
- find a listing (or an off-market deal) online
- go through the house thanks to the virtual tour
- set up an inspection of the property
- open a bank account
- get financing
- do the paperwork
- pay property taxes
- and put your (electronic) signature on it all online
Therefore, there really is no limit to what you can do, thanks to the power of the internet.
However, as mentioned, the question of the day is — should you?
To answer that, we need to take a look at the downfalls of buying properties online.
Buy House in USA Online | The Cons
Although we’ve hinted at them throughout this text, there are actually quite a few disadvantages to buying properties online. When you’re a nonresident investor, there are several obstacles that you’ll face if you try to go down this road.
You Don’t Have All the Info
As mentioned, online property listings don’t have all the information you’d get if you were to meet with a realtor or broker in person. For example, you won’t be able to get any information about the neighborhood, the infrastructure, the people who live there, what the property and the house feel like, etc.
You Can’t Do a Physical Inspection (And Pictures Can Lie)
Buying online means that you can’t do a proper inspection of the house. Don’t forget: pictures can lie. So, that selection of gorgeous, seemingly perfect photos can be completely false.
You can schedule a formal inspection of the property you’re buying, even if you’re doing it online. They will inspect the foundations, check for termites, inspect the heating and AC, and generally poke around the house to see if everything is in working order.
However, YOU won’t be able to check the house. Physically walking through the house, checking for anything and everything from wobbly railings to outdated tiles that are just about to start peeling off from the walls, is a major must when buying a property.
And That Comes With Consequences
The NRI founder, Luka, learned that the hard way when he bought a seemingly perfect property online. It was at the very height of the pandemic when traveling to check out the property in person wasn’t really an option. Luka managed to work around that problem, of course, because he did everything online.
And when we say everything, we mean everything. From finding two off-market deals for two separate properties to figuring out through extensive research what his next steps should be, to finding consultants, lawyers, and advisors who could help him through the process and explain at least one step of it.
What followed was a lengthy maze of paperwork. Opening an LLC online isn’t impossible, but it’s complicated. However, Luka managed to do it and he signed an operations agreement with a partner online. He didn’t step one foot out of his own country in order to do it.
Of course, as mentioned, doing everything online and without guidance can be a double-edged sword. Although perfect on paper, one of the properties Luka purchased later turned out to be in a much worse state than it seemed. What followed was a pricey renovation process that brought out the overall price of the purchase to nearly double the original asking price.
These are the mistakes that often go hand in hand with online buying and are the ones you want to avoid. With proper guidance and coaching, Luka could have avoided them as well; but he didn’t know then what he does now.
And So Can the Sellers
Of course, it’s also vital to mention that although pictures can lie, so can the sellers. This really ties into the first downfall. When you’re unable to inspect the property physically, you have no way of knowing whether the seller is trying to scam you or not.
