How to Buy a House in Another State

Looking to relocate to another state but want to avoid renting? If you’re ready to jump straight into homeownership while you get settled, the idea of buying a house in another state can be both exciting and a bit overwhelming. Fortunately, the process is simpler than you might expect. 

Here’s how to buy a house in another state. 

How to buy a house in another state

When looking for homes in another state, you need to: 

1. Research the new location

Make a short list of neighborhoods, cities, or suburbs that you want to move to. Research each one to learn more about:

• Median home prices
• The competitiveness of the market
• Job opportunities
• School systems (if you have minor children)
• Access to amenities

These are just a few examples. Your list should focus on factors that are most important to you. For instance, older individuals may want to be located close to healthcare providers. Active people might look for neighborhoods with walking and biking trails, parks, and gyms. 

2. Find a local real estate agent

Next, find a real estate agent who has experience in the area you want to live in. Read online reviews and find out how long they’ve worked in the area. An experienced agent who knows the neighborhood can help you find a home that checks all of your boxes. 

3. Review state-specific laws 

Each state has slightly different laws regarding real estate transactions. The forms may look different, and you may have to jump through a few extra hoops, too. 

For example, some states require real estate attorneys to be involved in every transaction. This can add to the cost of buying a home, but it may also offer valuable protection for everyone involved. 

While your real estate agent and lender should be familiar with any state-specific requirements, always verify for yourself. The last thing you want to do is run into major delays a few days before your closing date. 

4. Compare financing options for out-of-state purchases

Financing works similarly whether the home is local or across the country. However, lenders may look more closely at:

• Employment stability, especially if you are changing employers
• Debt-to-income ratio
• Down payment reserves/savings
• Whether the property will be your primary or secondary home

If you are relocating for work, provide documentation from your new employer. The documents should outline when you start and your salary. 

5. Plan for remote showings

You’ll likely be “viewing” homes remotely, which can be a bit unsettling for some buyers. Here’s where having an accommodating agent becomes invaluable. A great agent will take their time when conducting walkthroughs so you can see all important elements of the home.

If you aren’t up for remote showings, you may have to plan a weekend trip to see properties in person. Make sure you coordinate with your agent so you can get the most out of your time there. 

6. Prepare closing logistics

The agents, lender, and title agency should handle most of the closing logistics. You’ll need to meet with a remote notary and sign all of your documents. The entire process should take about an hour or less. 

How to improve credit for buying out of state

Now that you know how to buy a house in another state, it’s time to make sure your credit score is ready. Lowering your debt-to-income ratio is one of the most important steps for increasing your odds of getting approved. This means paying down revolving balances and not taking on any new debt. Lenders prefer a lower DTI because it signals that you can manage your monthly mortgage payments.

You should also focus on making every payment on time. Late payments are a huge red flag. If you’re working to build or rebuild credit, adding consistent positive payment activity can help you establish a stronger profile. For example, platforms like Kikoff allow you to report verified on-time rent payments. 

If you’re planning a move in the next 6 to 12 months, these tips will help you become more appealing to lenders when applying for a mortgage. Remember, building credit is a long process that requires discipline and consistency. 

Conclusion

Whether you want to buy a house out of state or simply strengthen your credit profile for when the time comes to purchase a home, Kikoff can help. You can create a free Kikoff credit account, and no hard inquiries are required. Kikoff also offers a variety of other paid and free services designed to put consumers in control of their financial history. 

Take a step toward stronger credit habits with Kikoff.