Site Unseen Real Estate

When Donna Ryan and her husband were trying to relocate from Florida to Minneapolis last summer, they knew exactly what they were looking for: a house in southwest Minneapolis, preferably within walking distance of Donna's sister's house, with hardwood floors, a finished basement and an updated furnace, for less than $150,000.

But their plans collided with the summer's over-heated real estate market. Every house that interested them was sold as soon as it hit the market, Ryan recalled.

So they asked Ryan's sister Pat Vitale to continue the search. When she spotted the perfect house, the Ryans didn't want to let it get away. So they bought it sight unseen, working out the details by phone and fax.

Ryan isn't the first in her family to buy a house sight unseen. Vitale bought her southwest Minneapolis house in 1996 while she was living in New York City. "We didn't see the inside until after the closing," she said.

Such transactions are rare, even in hot markets, agents say. "I would be very uncomfortable as an agent" dealing with buyers who hadn't seen the house, said agent Mary Sommerfeld.

But there may be more sight-unseen purchases as technology makes it easier for buyers to inspect houses from a distance. "That's starting to happen, especially with the Internet," said Todd Grill, president of the Minnesota Association of Realtors and an agent with RE/MAX Results Realty.

More common are transactions in which one spouse writes a purchase agreement before the other spouse has had a chance to see the house. "That actually happens a fair amount," Grill said. "That's been going on for quite a while, either with out-of-town buyers or on hot properties (in) south Minneapolis. I don't like doing that unless the wife has seen it. It makes me nervous when the husband sees it and (writes a purchase agreement) subject to his wife seeing it. I'm a little more comfortable when the wife sees it."

Sommerfeld has worked on two recent transactions in which husbands bought houses that their wives hadn't seen. "Fortunately, they knew their wives' taste well. In one case, the wife was in Europe for a month. He sent videos. In the other case, the wife was on the Coast."

When one spouse is writing a purchase agreement on a house the other spouse hasn't seen, "the buyer's agent would probably write some clause making it contingent on an inspection, that could give a window of opportunity to get the other spouse in," said Susan Lichliter, an agent with Coldwell Banker.

Or an offer could be made contingent on the other spouse's approval of the purchase, said Sommerfeld. "You could put in any contingency you want. But that makes the offer less attractive. Contingencies haven't gone well in 1998. It's been an extremely busy market."

Demand has been highest for houses priced below $150,000 in popular neighborhoods. When Ryan was looking for such a house, she tried looking for houses on the Internet, with little success. "By the time they (the houses) got on the Internet, it was too late," Ryan said.

She and her husband had sold their house in Florida and had agreed to move out by August 15, so "we were under the gun," Ryan said. They asked Vitale to continue the search while they were in Florida preparing to move. "She knew what we were looking for," Ryan said.

The day before the Ryans moved out of their Florida house and set off for Minneapolis (where they planned to live with relatives until they could get into a home of their own), Ryan got a call from her sister. A house had just come on the market in her neighborhood. It was for sale by the owner. Vitale had seen it, and it fit the Ryans' criteria.

"She told me, 'This is it,'" Ryan recalled. After hearing the description, "I called him (the owner) in 10 minutes and offered the asking price" of $125,000, contingent on an inspection.

The owner was hesitant, she said. "It took me a while to explain." The Ryans had a letter from a lender saying they were pre-approved for a mortgage, which helped. But the owner wanted to wait and see what other offers he might get. "I told him, 'This is good for 24 hours. This is it.'"

Ryan worked out the final details of the purchase from the moving van via cell phone. "I've got the charges to prove it," she said.

Once she saw the 1906-built two-story house, "I loved it," she said. "It has a beautiful big kitchen." Since the move, she's seen other houses that she prefers, but she has no regrets about the purchase. "We're hoping to turn this around in a couple of years."

Source: http://www.hgtv.com/hgtv/ah_real_estate_buying/article/0,1801,HGTV_3159_1374766,00.html