Distance is not a stopping point anymore if you want to buy real estate—it can be done remotely. In our comprehensive guide, we'll explain how to purchase real estate in a distant regime and what nuances to anticipate. 

You can buy real estate remotely in many countries now. This is also a result of the coronavirus pandemic, which has forced all industries—including real estate—to a more remote mode of operation. This is especially true for the U.S. market, so today we have decided to tell you how specifically this country uses this practice.

How do remote home purchases work in the United States?

Step 1. Look for the right real estate agent. 

Not surprisingly, a good realtor is an important person in the remote process of acquiring real estate. This is even more essential than in a traditional practice because now you will be doing all the necessary kinds of stuff at a distance.  

What signs will tell you that a real estate agent is the one: 

  • He knows the place where you want to buy a house and can navigate there as a local. This includes acknowledging all the nuances and pitfalls of the local legislation, as well as acquaintances with good creditors, etc.
  • There are many reviews about this person, and the majority of them are good and support his professionalism. 
  • He has experience with remote transactions and can prove it. 
  • He is ready to hear about all of your wishes: what real estate would you like to buy—a house, an apartment, or maybe a townhouse? How big should it be, and what should its style represent? How about area and infrastructure? The ideal real estate agent should be able to cover all of these details.  

Step 2. Get a mortgage pre-approval (if needed).

If you are going to buy a house with a mortgage, you should have the preliminary okay from the bank before purchasing any object. And with this goal in mind, you will want to look at the various options for mortgages that are on the market. As we are talking about a distant process, the mortgage isn’t an exception—the pre-approval can be obtained online.

Mortgage common closing costs and how they look in different countries 

Step 3. Choose an object using video tools.

When purchasing an apartment at a distance, how do you select the suitable variant? Nowadays, it is popular to show real estate via video tours. In this case, your agent would be your eyes and ears. Be sure that he will show you all the corners and tell you everything you want to know, from the state of the furniture to the smells in the house.

Step 4. Send the seller a proposal.

Keep in mind that just because you offer a proposal to the seller doesn’t mean that he will choose you. Aside from you, he can receive many proposals from other buyers, including those who will do it in person. So, prepare to compete for your preferred real estate. But don’t worry: if you choose the right agent, he will interact with sellers and make all the needed preparations. 

Step 5. Conduct an appraisal and home inspection. 

Take the chance to use the Due Diligence Period, if it is provided for in your chosen state. During this period, you must inspect the home. This requires hiring a licensed inspector, who will document the property's condition and report any defects, deficiencies, or problems with it. 

The formal due diligence period, if there is one, typically lasts between 14 and 30 days. During this time, the buyer has the right to terminate the contract “for any reason or no reason” with a loss of only the due diligence fee. After this period, the buyer may withdraw but will forfeit the deposit as well as the due diligence fee. 

Step 6. Review the title insurance and make a title check.

Now is the time to review all the documents and get things in order. Your attorney will review the “title” of the house, which is the transfer of ownership rights on the property between the seller and the buyer. The attorney will see if there are any obstacles that may prevent the deal (including zoning issues or unpaid mortgage payments from the ex-owners). It is also your lawyer's responsibility to take out title insurance. This will protect you from any title issues.

Step 7. Get loan approval.

If you still intend to take out a mortgage, you will need final approval from your lender to close the sale. Your lender will complete a thorough review of your finances, the details of the transaction, and the home itself before deciding whether to approve the loan. This is called underwriting. Remote buyers will have to provide more information for this than a local buyer, but anything is still possible.

Step 8. Close the remote deal.

If everything goes as planned, it will soon be time to close the deal, pay the down payment, cover closing costs, and sign all necessary paperwork. Although this is typically done in person, digital technology makes signing closing documents remotely fairly simple.

The Electronic Signature Act of 2000 (also known as the “E-Sign Act”), which was passed in the United States, recognizes the validity of electronic signatures on legal documents. 

However, in order to complete the transaction, you will also need a notarized signature in addition to your authorized signature. The problem is that some states permit remote online notarization (RON), while others do not. 

The best remote closing option is provided by Remote Online Notarization (RON). Payments, identity verification, document signing, and notarization can all be done online without having to physically travel anywhere. Instead, you establish a video call, show the title company representative and notary your state-issued ID, and electronically sign all of your paperwork.  

There are two additional models for electronic closing if remote online notarization (RON) is not an option in the state of your choice: the hybrid approach and in-person electronic notarization (IPEN).

By using the hybrid method, you can electronically sign any document that doesn't call for a notary public before the transaction's closing date. Once that date arrives, you can meet in person with the real estate notary or closing agent and sign the remaining documents to secure your financing. While this method is not completely remote, it is perfectly legal nationwide because you still sign important documents in person. But since you're able to pay and sign documents before the actual closing date, the process is greatly accelerated. 

With personal electronic notarization (IPEN), you will still need documents to be notarized by a notary. IPEN differs from traditional notarization in that it notarizes electronic documents using digital signatures and stamps instead of traditional paper, pens, and stamps.

Before deciding whether to use any method of closing, be sure to check your state's laws regarding remote notarization.