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Blind Offers: Are DC Homebuyers Really Bidding on Homes They Haven't Seen?
A few years ago, DC real estate agent Max Rabin of TTR Sotheby's International Realty was working with a client who wanted to purchase a two-bedroom condo in Logan Circle for his daughter. The problem was that he lived in San Francisco and his daughter wasn't in DC at the time. So, if he made an offer, he would have to do it without seeing the home first. The client ultimately bid on the unit and that bid was accepted.
"He did not actually see the unit until about two weeks after settlement when he came to DC with his wife and daughter," Rabin said. "It was an awkward and nervous moment, but they were all very happy with the unit."
Instances like this might seem rare in the home buying world. Who in their right mind would make an offer on a home, the largest financial decision that many people make, without seeing it first? Well, it may not be as uncommon as people think. A recent study from Redfin concluded that 32 percent of buyers who purchased homes in DC last year made offers on listings they had not seen. Considering the District's status as the seat of federal government and home of several universities, there are likely a variety of situations in which would-be homebuyers put in offers on homes sight unseen, but one in three buyers is a very high percentage.
"In today's fast market with low inventory, there are situations where a buyer has seen a lot of homes and knows precisely what they are looking for," Redfin agent Steve Centrella said.
"I think it's pretty rare, but it definitely happens," Mandy Mills of Compass told UrbanTurf. "When the market is a little hotter and things go very quickly, it's sometimes necessary to do that to get the right house."
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To be clear, the study notes that the majority of buyers who made offers before seeing the listing, ultimately saw the home during or before the home inspection. There's also a sizeable portion of the market for which sight-unseen offers are the norm: new construction. "Lots of buyers put down deposits based on renderings and floor plans which are all subject to change," explains Rabin. "Many buyers for new condos don't see the final product until they step into the unit at a final walk through."
Another group that might be pushing the percentage of "blind offers" up are investors.
"I think investors will buy things without seeing them," Mills noted. "They don't care what it looks like, they care that it has the return rate to be a good investment, so I have to think that they account for a big portion of that 32 percent."
Judging by Redfin's data, 32 percent is actually a below-average rate nationwide, where 35 percent of homebuyers put in blind offers on houses last year. In Los Angeles, 57 percent of homebuyers had made offers on homes they hadn't seen; San Diego comes in second at 46 percent.
Overall, Rabin and Mills agree that it is unlikely that as many as one in 3 homebuyers last year made sight-unseen offers — especially if one focuses on closed sales, which the Redfin study does not. Still, both agents could reference their own clients that had made offers without seeing a home first, and Mills will be closing on one of those transactions soon.
This article originally published at https://dc.urbanturf.com/articles/blog/did-one-in-3-dc-area-homebuyers-really-buy-sight-unseen/13629.
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