This week, online real estate company Redfin published the astonishing results of a survey. The survey found that 41 percent of millennial home buyers purchased real estate sight unseen. About one-third of all home buyers purchased property sight unseen.
If those numbers are true (and we have no reason to doubt Refin’s survey methods), it’s mind-boggling. One-third of home buyers never actually laid eyes on home they bought before the closing.
According to Nela Richardson, Redfin chief economist, “Millennials are already starting to set trends in the real estate industry. They are three times more likely than baby boomers to make an offer sight-unseen, and they’re more likely than older buyers and sellers to negotiate commission savings.”
Other real estate companies are betting that the trend will grow, with even more home buyers willing to close on property without seeing it in person. (We wonder whether home buyers willing to purchase a property sight unseen can make do without having a real estate agent by their side as well. This is a bet several real estate companies, like Zillow’s Instant Offers, area already making.)
Why do millennials (and other buyers) think it’s a good idea to make the single biggest purchase of their lives sight unseen? Do they think that because it’s so “easy” to renovate a home they can fix whatever problems exist? Has HGTV changed our perception of home improvement projects, not to mention Tiny Homes?
While it’s true that you can change so much about a home, including what it looks like inside and out, there are things you can’t change quite so easily. What happens if the properties next door aren’t as they appear on Google Streetview? Or, if the house is in much worse condition than advertised? Or if there is lead paint, lead in the water, or elevated radon levels? Or, what happens if you can hear the upstairs neighborhood through the ceiling, walls or floor?
Or, as we wrote about recently, what happens if the setbacks or side yards really aren’t buildable, which you might not realize unless you see the property in person or get a copy of the building bylaws, rules and regulations?
If you’re going to spend $100,000 or $1 million, we really think you really ought to tour the property in person. If a market is so hot that you feel as though you can’t take the time to see it in person, then you should either consider including a home inspection rider that is contingent upon your approval of the inspection report or you should shop in a new neighborhood or even wait to buy your home.
If not, then perhaps one of our correspondent’s take is worth considering:
“In your recent article, you hit the nail squarely on the head. When you addressed the issue of setbacks. When you told the questioner to stop complaining. The property owner was not forced to buy in that development. And yet he complains. Your response was he did not ‘do his due diligence.’ If someone is considering buying property in a community with ‘grey laws’ they should have had a real estate attorney review the contract. Thank you for telling the property owner he has no one to blame but himself.”