Is It Risky to Work With a Buyer Who’s Out of State?

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It’s common for seller’s agents to work with out-of-state buyers, but you should be aware of a couple of things. You might be liable for the misrepresentation of a property in a “sight unseen” home sale or violation of fair housing laws.

You probably thought, Yikes! Let’s avoid that. 


Consider adding virtual tours to your listings if your clients agree in advance. Virtual tours, when executed well, can potentially save interested parties time, hassle, and money. Since most buyers start their home search online, you’ll likely be able to eliminate the out-of-state buyers who aren’t serious about making a purchase.

In this article, you’ll learn how to take the proper precautions to protect your client, broker, and yourself when working with this type of buyer, so you’ll have an advantage during negotiations. 

Consider All Offers First

Remember to breathe and examine all the offers your client receives. If the out-of-state buyer has the highest offer and can pay cash for the home, it’s a competitive offer. However, if the out-of-state buyer wants to offer more than the listing price but their down payment is low and they want your client to cover their closing costs, set the offer aside. It’s always easier to work with a more financially stable buyer when you have options.

Also, check for contingencies in the contract. Is the out-of-state buyer rushing through the process by not including inspection and appraisal contingencies? Perhaps they need to move quickly because of a new job or they think the contingencies don’t matter. You’ll need to ask why they’ve decided not to include a contingency if the offer otherwise looks solid. Consider talking your client out of selling to someone who would give up these contingencies.

Conversely, if a buyer makes an offer contingent on the sale of their home in another state, keep in mind that it might stall your client’s transaction. You can always reject an offer with this contingency.

Talk to your client and find out who made the best impression. Have them think it through so that they’re not rushing the process. Remember that your client has the last word on who gets the winning bid, not you.

Assess the Buyer’s Financial Situation

You’ll want to examine the buyer’s finances with your client before you decide on any offer. If they can comfortably pay a down payment of 20% and closing costs, seriously consider them. If they need financing, you should check for a preapproval letter attached to their offer. If they can pay cash, that’s an excellent scenario.

Then, if you’re feeling confident about the out-of-state buyer’s offer, find out if they plan to make an earnest money deposit and the amount they can deposit into escrow. The more they’re willing to deposit, the more eager they’ll be to close the deal. 

Communicate with the Buyer

Clear verbal and written communication is vital throughout the transaction. Make sure that you include these key items in your online listing and the purchase contract:

  • A copy of the seller’s disclosure statement
  • A copy of a home inspection report (if seller ordered one)
  • HOA fees and information
  • A list of home features/amenities, neighborhood facts, and area statistics 

Have the buyer and seller correct any missing information or mistakes. Paying attention to detail can save you from many headaches and regret!

Protect Yourself from Liability

The difficult thing about working with an out-of-state buyer is that it may not be feasible to meet in person, which is when you might run into liability issues. For example, a buyer can try to claim that you weren’t forthcoming about water damage in the utility room. This is why you should keep every concern or current condition in writing as you go through your live walkthrough by FaceTime or other means, and have the buyer sign acknowledging this. 

The best-case scenario is when the buyer can visit the property in person. If that’s not possible, have their agent, family member, or close friend come in their place. You’ll want to know before the ink dries on the contract paperwork that they’re serious about buying. 

Make sure to brush up on the basics of the Fair Housing Act so that your words and actions are non-discriminatory when working with buyers. 

Encourage the buyer to order home inspections including specialized ones like a pest inspection, asbestos, etc. so that if they need to back out of the contract they still can.

Finally, ensure that you have a “sight unseen” addendum in the contract if your buyer can’t set foot on the property.

The Bottom Line

Protecting your seller with proper communication and legal documents can help you close a deal with an out-of-state buyer. Generally speaking, working with an out-of-state buyer is no different than working with an in-state buyer. Remember to offer a live walkthrough, discuss contingencies, and agree on the condition of a home before you sign a contract. These tips can help ensure that your and your client’s reputation stays intact. 

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