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Improvements in technology impact almost every aspect of our lives. House hunting is no different. According to the National Association of Realtors®, 97% of homebuyers in 2020 used the internet in their home search. More than half of them found the home they would eventually purchase on the internet.
Granted, there’s more that goes into the home buying process than just finding a home. But as more people use the internet to find homes, it stands to reason more people will seek to finish the process online.
We’ll walk you through the basics of this process, so you can feel more confident making an offer online or in person.
Should You Buy a House Online?
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What are you looking to do?
Just because something is trending, doesn’t necessarily mean it’s a good idea. Before committing to a completely online home buying experience, we’ve put together some pros and cons to consider.
If you’re house hunting online, you can expand your search net without needing to put additional miles on your car. This is especially beneficial if you’re looking to purchase a home in another city or across the country.
By doing a virtual walk-through, you can rule out many homes that you otherwise would have needed to see in person. You also don’t have to worry about scheduling a time or making open houses.
Online home buying sites let you see the bigger picture. You can see what houses are being listed for, what the current inventory looks like and what’s coming soon. While it’s still a good idea to work with a real estate agent, you can get a much better sense of your local real estate market by doing some research on your own.
If you’re shopping for a mortgage online, that means there’s a greater pool of lenders available to you. This gives you the opportunity to shop around and find the best possible rate for your situation.
If you don’t tour a house in person, you won’t be able to inspect it closely. Photographs and virtual tours are often provided by the seller, who will seek to paint the property in the best light. This means you could miss flaws that might have been obvious in person.
Most listings focus on pictures and virtual tours of the property itself. Even if you look on Google Maps, it can be hard to get a sense of what your neighbors would be like or how safe you’d feel walking down the street without seeing the property in person.
Online home buying can be like online dating. Just because you like a profile picture, doesn’t mean there will be chemistry when you meet in person. The same is true for stepping into a home for the first time. However, what may seem like a flaw might feel like “character” when you see it in person. Buying a home online means skipping the chance for a vibe check.
Buy a House Online in 5 Steps
If you decide that buying a house online makes sense for your situation, we’ve broken down the process into simple steps to follow.
1. Get preapproved
You’ll want to find a mortgage lender who can take your application online. It’s good practice to shop multiple lenders before deciding which one you want to use.
Going through the preapproval process has several advantages, including giving you an idea of how much house you can afford. You can use our handy mortgage calculator to see what your monthly payment would look like at different price points.
Getting preapproved can also make your offer more competitive. It lets sellers and real estate agents know that your financing is more likely to go through.
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Rocket Mortgage® lets you get to house hunting sooner.
2. Get a real estate agent
This is one of the best things you can do for yourself before starting your house hunt. When you buy a house online, it’s even more important.
Typically, you can find a real estate agent through the same sites you might use to look up houses – or you could go the Google route. Just make sure you pay more attention to their reviews than their bios.
When you have a few names on your list, start reaching out. Don’t be afraid to treat these conversations like an interview and ask them some tough questions.
Make sure your agent:
- Has experience helping online buyers
- Is a fast and clear communicator
- Can successfully record videos on a phone (and share files)
- Is detail-oriented when looking at homes
3. Start house hunting
There are several popular house hunting websites that you can use to find properties. Real estate agents also have tools that can send you emails when new properties come on the market or if there’s a price cut so that you don’t have to spend all your time monitoring these sites yourself.
Take virtual tours and review floor plans
You have a lot more options for virtual tours these days. In fact, many online property listings include virtual tours. If they aren’t available, talk to the seller and your agent about taking a virtual tour on Skype or FaceTime. They’re not exactly the real deal, but they can help you get a better sense of the property.
Also, be sure to ask for floor plans, explore every corner of the house and visualize yourself in the space. Break out a measuring tape and do some test measurements to see how your furniture may – or may not – fit in the new space. All of this can give you a sense of what the home is like and make it easier when it’s time to move.
4. Make an offer
Congratulations! You’ve found the one. Now, go out there and get it!
Your real estate agent can help you figure out what to offer for the house.
The whole process of making an offer, negotiating and signing a purchase contract can be done online with e-signatures – aka electronic signatures.
When your offer is fully accepted, your agent will type up a digital purchase agreement for you and the seller to e-sign.
5. Close on your new home
The closing process begins as soon as the purchase contract is signed. The whole process usually lasts a month or more, and it ends on your closing day.
You can take care of all the steps required to close on a house remotely. Work with your agent and your lender to handle some important milestones:
- Home inspection: Hire a qualified inspector to check for any issues the house may have. Depending on what they find, you may want to ask the seller to make repairs or lower the final price.
- Appraisal: Ordered by the lender, this confirms the home isn’t worth less than the amount you plan to borrow.
- Title search: Check the ownership records to make sure the seller has the right to sell you the house.
- Homeowners insurance: Usually required before you buy, this insurance covers fire, theft, flood or accidents after you move in.
- Mortgage underwriting: If this didn’t happen before the offer was accepted, your lender may ask you for additional information and supporting documentation.
- Sign and pay: Here’s when you’ll pay the final closing costs and sign the legal documents. In return, you’ll get the keys to your new home!
Online Isn’t the Only Way
Remember, just because you start the home buying process online doesn’t mean you have to finish it that way. Combining online resources with in-person handshakes and feet on the ground can be one of the most effective ways to buy a home.
The Short Version
- Pros of online home buying include saving time, expanding your search net and being able to do more market research
- Finding a good real estate agent is important – even if you plan to purchase a home virtually. They can do a tour of the home and show it to you with a video call
- The steps for putting in an offer and closing are the same. You’ll just be relying on e-signatures and other technology to officially close the deal
National Association of REALTORS®. “Real Estate in a Digital Age.” Retrieved March 2023 from https://cdn.nar.realtor//sites/default/files/documents/2021-real-estate-in-a-digital-age-10-05-2021.pdf