Sight unseen offers drop; is home buying getting easier?

Aly J. Yale
The Mortgage Reports contributor

A sign of things to come

There’s yet another reason for home buyers to celebrate. According to new data, the number of sight unseen offers has dropped significantly — indicating less competition and easing inventory pains in many markets.

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The changing market

According to data from Redfin, only 20 percent of recent home buyers made an offer sight unseen, marking a 15 percentage point drop since last year.  In November 2017, a whopping 35 percent of buyers made an offer sight-unseen.

Though surprising at first, given today’s high home prices and rising mortgage rates, Redfin’s Daryl Fairweather said the decline is starting to make sense.

“In July, we first reported that the market was beginning to shift toward buyers’ favor, with rising inventory and slowing price growth,” Fairweather wrote. “Buyers had become more choosy about what homes to move on and were behaving less hasty in making offers. And now, buyers are facing fewer multiple-offer situations, which allows buyers even more time to visit homes in person before making an offer.”

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Tech plays a role

Still, 20 percent of buyers is quite a lot. Though stiff competition may play a role in sight unseen offers, the rising use of technology might as well.

Thanks to 3D home tours, drone videos and interactive floor plans, buyers can virtually “walk through” properties easily without ever being on site. On-the-ground agents also use Skype and FaceTime to show buyers homes they can’t physically visit in time.

No Realtor? No problem. Let these robots take the wheel.

Despite this tech though, a decline in sight unseen offers is a good sign for buyers, according to Redfin agent Jessie Culbert.

“Now that most homes are staying on the market for longer than a week, there just isn’t as much pressure for buyers to make offers so hastily,” Culbert said. “That’s a big change from earlier this year when sellers set offer review deadlines, and they were strict. This meant that whether or not you had time to physically step inside the home, you had to get your offer in on time in order to be considered. Otherwise, you would miss out entirely on the opportunity to compete for it.”

Making an offer on a home without seeing it first

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Verify your new rate (May 25th, 2019)