How to Buy a House in Another State Before Moving

Home is where the heart is, but finding that home before you even move to a new state can feel like finding a needle in a haystack.

If you’re thinking about how to buy a house in another state before moving, you’re not alone.

Did you know that nearly 18% of homebuyers in the U.S. purchase properties in states other than where they currently live?

That’s a significant number of people navigating the challenges of remote house hunting, virtual tours, and juggling the logistics of relocating.

The reasons vary—some are chasing new job opportunities, while others are looking for better schools, lower taxes, or simply a change of scenery.

In fact, states like Texas and Florida have seen a massive influx of out-of-state buyers, with over 500,000 people moving to Florida in just one year, according to U.S. Census data.

It’s clear that buying a house in another state is no small feat, but with the right approach, it can be an exciting and rewarding journey.

Let’s talk about how you can make this process as smooth as possible.

Whether understanding the local real estate market or connecting with the right professionals, we will break it down step by step.

Why Buying a House Out of State is Different

Relocating to a new state comes with unique challenges, including different real estate markets, unfamiliar neighborhoods, and logistical concerns.

While technology has made the process easier, it’s still vital to understand the out-of-state home-buying process to avoid costly mistakes.

Curious about your moving costs? Fill out the details, and we’ll calculate them for you.

According to a survey by the National Association of Realtors (NAR), over 18% of homebuyers purchased a property in another state, driven by job relocations, better living standards, or lifestyle changes.

Steps to Buying a House in Another State

Here's a detailed guide to buying a house when you move to a new state.

Research Your New State and Market

The first step in the process of buying a house out of state is understanding your destination.

Investigate:

· Neighborhood demographics

· School districts

· Cost of living

· Property taxes

For example, Texas has a 1.8% property tax rate, while California averages 0.7%. Knowing this can influence your decision.

Hire a Local Real Estate Agent

A local agent is invaluable for navigating unfamiliar markets.

They can:

· Provide insights into neighborhoods.

· Recommend homes that match your criteria.

· Negotiate on your behalf.

Look for agents who specialize in purchasing property in another state and have experience with remote clients.

Get Pre-Approved for a Mortgage

Before you start house hunting, secure financing. What do you need in order to buy a house?

Pre-approval is a must. Lenders will evaluate:

· Credit score (aim for 620+ for conventional loans).

· Debt-to-income ratio (under 43% is ideal).

· Proof of income and assets.

Pro tip: Compare rates from at least three lenders, as mortgage rates vary widely by state.

For instance, in 2023, Florida’s average rate was 6.8%, while Colorado’s was 6.4%.

Virtual Tours and Remote House Hunting

Thanks to technology, you can now explore homes remotely. Platforms like Matterport and Zillow 3D allow you to view properties virtually.

This is especially helpful when buying a home remotely in another state.

Remember to ask your agent for live video walkthroughs to examine details not visible in photos or virtual tours.

Plan an In-Person Visit (If Possible)

While virtual tours are convenient, nothing beats seeing a property in person. If your timeline allows, schedule a trip to explore potential homes.

Use this time to meet with your agent, attend open houses, and tour neighborhoods.

Challenges and Solutions: Buying a Home Remotely

Common Challenges:

1. Trusting the process without seeing the property.

2. Navigating state-specific legal requirements.

3. Coordinating inspections and appraisals from afar.

Solutions:

• Work with a trusted local agent.
•  Hire inspectors and appraisers with excellent reviews.
• Use tools like DocuSign for seamless document management.

Tips for Buying Property Before Relocating

Here are some practical tips for buying property before relocating to make sure the process goes smoothly:

Research moving costs: Cross-country moves average $4,000-$10,000.

Understand state-specific laws: For example, some states require attorneys for closing, while others don't.

Prepare for dual housing expenses: If you’re still paying rent or a mortgage, budget accordingly.

How Much Does it Cost to Buy a House Before Moving?

When considering how to buy a house in another state before moving, understanding the costs involved is crucial.

These expenses can depend on the state, the specifics of your purchase, and even factors like local laws and market trends.

Let’s break down the primary costs you’ll encounter.

Home Purchase Price

The home’s purchase price is the largest expense and fluctuates across the United States.

Factors influencing price differences include the state’s economy, property demand, and location desirability.

For instance:

California: Known for its high cost of living, the median home price was $787,000. In cities like San Francisco, prices can soar beyond $1.2 million.

Iowa: Offers more affordability, with a median price of $229,000, perfect for those seeking small-town living or lower costs.

If you're relocating to high-demand states like Florida or Texas, expect an influx of out-of-state buyers to drive prices higher.

Closing Costs

Closing costs are the fees and expenses required to finalize the purchase and transfer of the property title.

These costs usually range from 2% to 5% of the purchase price and cover a variety of services.

Here’s what’s included:

Loan Origination Fees: Charged by lenders to process and approve your loan.

Appraisal Fees: Necessary to determine the property’s value, often costing $300–$600.

Title Insurance: Protects the buyer and lender against ownership disputes, costing around $500–$1,000.

Recording Fees: Fees for registering the transaction with the local government, varying between $50–$200.

Comparison of Average Closing Costs by State

Here’s a look at how closing costs differ depending on location:

Pro Tip: Keep in mind that closing costs can be negotiated. Some sellers may cover a portion of these costs, especially in buyer-friendly markets.

Property Taxes

Property taxes depend on the state and even the county.

These taxes are based on the assessed value of the property and fund local services like schools and infrastructure.

New Jersey: Has one of the highest property tax rates at 2.49%, meaning a $400,000 home would incur $9,960 in annual property taxes.

Hawaii: Offers one of the lowest rates at 0.28%, equating to $1,120 annually on the same home value.

When budgeting, remember that some states reassess property values annually, which can affect your taxes.

Homeowners Insurance

Homeowners insurance is essential to protect your property against damage or loss due to events like fires, storms, or theft.

Premiums vary by location due to:

Risk of natural disasters: Coastal states like Florida and Louisiana have higher premiums because of hurricanes.

Home value: Higher-value homes cost more to insure.

On average, homeowners in the U.S. pay about $1,200 annually, but in high-risk areas, premiums can exceed $3,000.

Moving Expenses

Relocating to another state comes with significant moving costs. Factors include:

Distance: Long-distance moves (1,000+ miles) average $4,037, but this can rise based on the size of your move and additional services.

Volume of belongings: The more items you move, the higher the cost. Downsizing beforehand can reduce this expense. 

Additional services:

Packing and unpacking: Adds $300–$1,000.

Storage: If you’re not moving in immediately, storage costs around $150–$300 per month.

Average Moving Costs Based on Distance and Size

Additional Costs

These often-overlooked expenses can add up quickly:

Home Inspection Fees: Typically $300–$500, but higher for larger homes or those requiring specialized inspections (e.g., mold or radon).

Survey Fees: May be required to confirm property boundaries, costing $100–$400.

Attorney Fees: In states like New York, having an attorney is mandatory and can cost $500–$2,000.

Utility Transfers and Deposits: Setting up utilities like electricity, water, and internet may require deposits ranging from $100–$500.

HOA Fees: If the home is in a neighborhood with a homeowners association, expect monthly or annual dues of $200–$400, depending on the community.

Tips for Managing Costs

Create a detailed budget: Account for all potential costs and include a contingency fund for unexpected expenses.

Shop around for services: Whether it’s movers or lenders, compare at least three quotes to ensure you get the best deal.

Negotiate where possible: From closing costs to repairs, there’s often room to negotiate.