More Homebuyers Bid on Properties Sight-Unseen. Would You?
It’s easier now more than ever to see home listings online, watch 3D virtual home tours, and view drone videos of a property. But would you bid on a home without seeing it in person?
A new survey found that 44 percent of buyers polled in the San Francisco Bay Area did just that in 2017.
The Redfin-sponsored survey interviewed people from 14 major metro areas and found that nationwide 35 percent said they bid on a home without first seeing it in person — up from 33 percent in May 2017 and 19 percent in June 2016.
Who are these risk-takers?
Foreign buyers. Busy out-of-town professionals. Millennials who are comfortable shopping online. Anxious buyers determined to get their bids in ASAP or risk losing out because of the frenetic, competitive nature of the Bay Area market.
Because the current housing inventory is low, “people see a house go on the market and they think they have to hurry and bid on it,” says Abio Properties co-founder and broker Cameron Platt.
Cameron has handled sight-unseen bids as a representative of buyers and sellers, usually for out-of-county clients. He leads potential buyers on virtual tours and communicates via Skype, FaceTime, phone calls, and emails.
“I have 360-degree Theta camera that I use,” he says. “I put it on a selfie stick and walk around the property while narrating what I see. Then I post it to YouTube and we discuss.”
Of course, there’s risk involved for the buyer. But that risk is mitigated by technological advancements, says Abio associate broker Elisabeth Watson, who handled a few sight-unseen sales last year.
“As a seller’s agent, we shoot very high quality photographs, we shoot videos with drones so you can get a sense of the neighborhood, and we use 3D tour technology for listing websites,” Elisabeth says. “Buyers can view and revisit the property as many times as they want.”
As a buyer’s agent, she says, “when I first started, I wouldn’t write offers for clients who hadn’t seen the property in person. But today’s technology makes the sight-unseen offer substantially less risky. In some cases, particularly with investment property, the opportunity is more important than a physical walk through. Access to tenant occupied property can be limited, and digital imagery and floor plans make it possible to make an informed decision on an offer.”
Agents still have mixed feelings about sight-unseen bids.
“Personally, I would not write an offer for a client on a home they had not seen in person yet,” says Abio agent Tomi Thomas. “Given the nature of competition in our market, and the fact that most buyers thoroughly pre-inspect a home before the offer date, it’s not a very viable scenario in our market. And I could never recommend a buyer make an inspection contingency free offer on a home they had not physically seen and thoroughly studied for condition.”
Cameron represented buyers last year who, while away at Tahoe on vacation, bid on a Crocker Highlands home, “and it was a disaster,” he says.
“I did the 3D tour for them. They wrote a bid and it was accepted. Then they came down to see it in person and hated it. They cancelled the contract. They liked how it photographed, but when they got there, they saw high tension power lines across the street, the finishes were cheap … It was just hard to see that detail in photos and video.”
“You still need the human touch. It’s an emotional process,” Cameron adds. “In a home, there are a lot of intangibles. What’s the feel? What’s the natural light like? What’s the flow?”
The Redfin-sponsored survey included 4,270 people throughout the country. It found that millennial homebuyers were more likely to make an offer sight-unseen, with 45 percent saying they had done so, compared to 28 percent of Gen Xers and 6 percent of baby boomers.
Sight-unseen offers were more common among people buying more expensive homes, according to Redfin spokeswoman Rachel Musiker. Nearly 60 percent of bidders purchased a home in the $750,000-$999,000 range.
Have you ever bid on a property without seeing it person? Tell us about it! Contact Abio Properties at 888-400-ABIO (2246) or firstname.lastname@example.org.