This is an unprecedented number - in April, only 17% of offers were made sight unseen. The trend of buyers making decisions without physical inspection suggests a new level of comfort with remote homebuying.
The rapid shift is largely attributed to the coronavirus pandemic, which forced many potential homebuyers to avoid physical viewings due to health and safety concerns. In June, when states began to reopen, Redfin reported an increase in the number of customers who clicked through listings online and then placed offers without viewing a single home.
Redfin also found that buyers taking the plunge and buying sight unseen tend to be younger – over half are Millennials – and they tend to purchase relatively inexpensive starter homes. It appears as though the risk of a bad investment is not as great for these buyers as they typically purchase homes that are within a reasonable price point and can easily be resold if needed.
In addition, the median length of time from listing to offer shrunk significantly, indicating that buyers are eager to snap up homes quickly. In April, it typically took 20 days to receive an offer, but by June, it had dropped to just 10 days.
Generally speaking, the rapid shift in purchasing behavior is a testament to how technology is impacting the homebuying process. The rise of virtual tours, digital paperwork, and remote closings have all made it easier for home buyers to purchase properties without ever setting foot on the property. Many buyers are also taking advantage of low mortgage rates, which is further incentivizing those who want to make an offer on a home before they have a chance to physically see it.
It's an interesting time in the real estate market, since up until recently, seeing a property in person was considered an essential part of the buying process. Going forward, it will be interesting to see how buyer sentiment changes as the pandemic continues and more people become comfortable with the concept of buying without first seeing the property. At the moment, it could be said that buyers are taking a leap of faith when they make an offer sight unseen, trusting that the virtual tour they used was sufficient enough to replace an in-person visit.
Redfin's June report indicates that a large portion of home shoppers are now comfortable enough to buy a house without ever seeing it in person. The majority of these buyers are Millennials, who tend to buy relatively inexpensive starter homes without causing too much damage should the purchase be a dud. The period of time from listing to offer has decreased significantly as buyers rush to capitalize on low mortgage rates, and the rise of virtual tours and other digital services means buyers can evaluate properties from the comfort of their own homes. Ultimately, it appears that the increasing number of buyers willing to take a chance on a home without seeing it in person is a sign of the changing times and a testament to the power of technology in the real estate market.
This article was contributed on Jul 05, 2023