Buying a Home in Another State? 6 Tips for Long Distance House Hunting
A cross-country move can be adventurous, while at the same time it can be a bit stressful. You have to find a home, a moving company, possibly new schools. But, you have to remember you’re also getting so much “new” to look forward to. So don’t let stress get the best of you. Those nerves can easily be calmed with long distance preparation. It all starts with six simple steps.
Learn about the cost of living
Maybe it’s a new job opportunity that has you buying a home in another state. You’re offered a much higher salary, so all seems doable and incredibly exciting. But wait. Where is this move taking you, and what does the cost of living look like?
For those of you who may not already know this, cost of living takes your salary, utilities, healthcare, housing, food and entertainment, etc. into consideration when determining how much money is needed to live in a given city.
According to Smartasset.com, if you’re a family of four moving from Omaha to Denver, you can expect a 6% increase in cost of living and an 11% increase in taxes.* Or maybe you’re an individual considering a move to the booming markets of Seattle or Boston. If that sounds more like you, keep in mind that they came in at numbers 7 and 8, respectively, on Kiplinger’s 2018 Most Expensive Cities to Live In list.
Obviously, your location options are endless, so it may be a better idea to send you to a cost of living calculator, like the one shared on CNNMoney.
*Tax determination in this example considers federal, state, and local taxes.
Determine your search criteria
Maybe it’s a new climate, time zone, or landscape you’re looking to move to. You want to trade in that high rise condo for a quaint abode with a mountainous view. But wait. What does your budget look like, and does it allow you to make that dream home location happen?
Prioritize what’s most important to you: the scenery, having a spare bedroom, the shortest commute to work, etc. Do you have kids? You may want to find a neighborhood near the highest ranked school districts. No matter your situation, the best way to handle buying a home in another state is to prioritize what’s most important to you in a home and neighborhood. Then take that list and start your research to see what makes sense. Just don’t forget about your budget. Can you afford the lifestyle you desire, or do you need to make edits to your list of priorities? Are you looking to buy right away, or rent for a bit?
An easy way to complete your research is by interacting with local social media groups. Most metropolitans have Facebook “homes for sale” groups. They also have local parents groups. Both are easy-to-use options where you can communicate with the locals to better understand neighborhoods and cost of living.
Create a moving checklist
Don’t forget to keep organized throughout the chaos that is cross-country moving. After all, you’re not just buying a home in another state, but also searching for new doctors, health clubs, insurance providers, etc. You’ll have to register your vehicle, set up new utilities, and of course you’ll have to cancel all of those things once you embark on the journey to your new hometown.
The best way to stay on top of things: a moving checklist. You can easily create and stay on top of deadlines. And, you’re sure to not forget any important tasks.
Hire the right moving company
Know that a cross-country move can take weeks for your stuff to be delivered. So you want to get moving on your moving company right away. Get an in-home estimate to determine costs and to gain a better understanding of delivery dates. If you can be flexible when it comes to arrival date, you may be able to save some money.
You’ll also want to allow yourself enough time to purge unnecessary clutter and to organize the important items. Most of your moving price is based on the weight of your belongings and the space they take up in the truck. So don’t take everything with you and plan to sort through it once you get to your destination — it’s not worth the extra fees!
To better prepare yourself on what else you should know when interviewing moving companies, take a look at this FAQ resource from Allied Movers.
Just don’t forget to consider any cost savings that moving on your own may offer. If you don’t have too much stuff, there’s always the option to rent a moving truck (like U Haul, Budget, or Penske).
Work with a local real estate agent
Whether you’re looking to buy immediately or in the near future, you’re going to want to find a local real estate agent to work with. On some occasions, mainly in smaller markets, local agents may even be helpful in finding you short-term rental homes (though the above mentioned social media groups are an easy way to find rentals, too).
You’re going to want to interview a few agents and you’re definitely going to want to seek out referrals or customer reviews. A great way to find the best fit is by asking the right questions.
Your real estate agent is going to help you through your search even before you’re in town and able to see houses. They understand the difficulty of buying a home in another state. And best of all - when the time comes - they’re going to help you through the offer and negotiating stages, so you have the greatest chances of making that dream house your next home.
Lastly, don’t forget to take advantage of Google Street View. It’s a convenient way to scan neighborhoods of houses you may be interested in so you can get a picture of what everything looks like. You’re able to see neighboring homes, shopping centers, and local highways which can be very helpful when considering your work commute.
Get mortgage pre-approval
What’s as important as hiring a local real estate agent? That’s right, it’s checking your credit score and seeking mortgage pre-approval. And it can — and should — be done before you have a house picked out. You need to ensure you have a healthy credit score in order to obtain the most competitive interest rates. It’s the easiest way to make sure you’re receiving the greatest savings. How? It’s simple. The better your credit, the lower your interest rate, and the less you spend on paying your mortgage back.
Let’s consider the following example.
You’re looking to buy a $300,000 home using a 30-year conventional loan and a 10% down payment.
At a 4.75% interest rate, you’re looking at spending $1,521 as a monthly mortgage payment. Over the life of your loan (30 years), you will spend $237,040 in interest.
Whereas a 4.25% interest rate would mean a $1,441 monthly mortgage payment.And over the life of your loan (30 years) you will spend $208,165 in interest.*
It’s easy to see how even a small difference in interest rate, most often as a result of a better credit score, can lead to more money in your pocket.
*These examples do not consider property tax, home insurance, or HOA dues. They do consider PMI since the down payment is less than 20%.
Curious what your payment may look like, try our monthly mortgage payment calculator. Or start your pre-qualification today!
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And don’t forget, that mortgage pre-approval letter is going to provide you a pretty clear estimate of how much house you can afford. Better yet, it’s going to make that offer on your dream home really stand out amongst the competition.
Once you’re ready for that mortgage pre-approval step, be sure to reach out to one of our salary-based mortgage consultants. We’re licensed in all 50 states and have access to every loan in the industry. Give us a call on your schedule, including nights and weekends: (800) 910-4055.