How to Buy a House in Another State: A Step-By-Step Guide

If you're considering buying a vacation home — or a primary home — in another state, it’s important to be organized and manage your expectations. Since you may not be able to view the house in person or easily deliver paperwork to your real estate agent, planning is essential to keep yourself on track.

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We've compiled these steps to help you get started with purchasing a house out of state. Soon, you'll be enjoying your new home in the mountains, desert or by the beach.

How to buy a house in another state

1. Get pre-approved for your new home

Mortgage pre-approval gives you the buying power to make an offer on a home you love. Meeting with mortgage lenders to determine your loan options and secure pre-approval is the first step for any serious house hunter. Financing a second home typically requires a down payment (depending on your loan type). In fact, some lenders have stricter requirements for debt-to-income (DTI) ratios and down payment amounts since second homes often come with a larger risk for the lender. While you may be pre-approved for a large loan, you should still consider your budget to determine how much home you can afford. Loan pre-approval represents buying power, but you know better than your lender what a reasonable monthly payment is for your budget. Once you know your price range, you can start evaluating the homes and locations you’re interested in.

Affordability

To some extent, you can use your mortgage pre-approval as a baseline for your budget. It determines your buying power, so you can’t exceed that amount unless you have the cash available to make up the difference. Be careful, however: Your pre-approved amount may overestimate how much you can afford to pay each month. Make sure you build a proper budget before borrowing the full allotted amount. Budgeting for a new home isn’t just about your mortgage payments. Home inspection costs, closing costs, mortgage insurance and homeowners insurance are just a few additional costs to consider. Of course, furnishing your second home and moving costs can get expensive, too. As part of your home-buying budget, start to price out what you’ll need to buy immediately to enjoy your new home.

2. Research your target destination

If you can’t visit your target locations, the internet provides a wealth of resources to get a feel for places. Websites can help you understand the housing market and what your budget can afford in different areas.Don't stop at just the property listings, though. Use online resources to delve deeper into a city, town or neighborhood. Community websites and social media groups can offer valuable insights into what it's like to live there. The more research you do online, the more prepared you'll be to narrow your search and find a place that truly feels like home.Consider these location factors to decide if a destination is right for you.

An image displays the six neighborhood must-knows for how to buy a house in another state.

Property taxes

Property taxes are determined by the value of your property (land and structures) and the property tax rate. Property taxes vary by city, county and state, so where you decide to move can have significant tax implications. Many government sites have property tax calculators, so you can estimate how much you may be charged based on your buying budget and the local tax rates. However, these are estimates and other influences, like recent renovations or local real estate market trends, can also impact your property taxes.

Cost of living

Property taxes aren’t the only cost variable you should consider in your budget. Homeowners insurance, HOA requirements and utilities are all home-related costs that are likely different from your primary residence expenses, especially if you’re buying in a vacation hot spot. Beyond the home costs, you should consider how much you’ll spend while you’re in new community. Groceries, restaurant bills, gas prices and entertainment expenses will also vary, so you should set a reasonable budget for each.

Attractions and amenities

Your vacation home is meant to be a comfortable space to relax with plenty of opportunities to explore and have fun. Consider what attractions you want near your new home:

Ocean beaches
Lakes for boating
Designer or artisan shopping
Ski mountains
Golf courses

Local amenities, such as the types of businesses, parks and community event, can help you envision your life there. Local newspapers and community websites offer a great glimpse into upcoming events and entertainment options.

Crime rate

Safety is an important factor when determining where you want to live. Especially if you’re buying a second home that may be vacant for long periods of time, you want to know your home and possessions are safe. Crime rate data from the FBI or city crime maps can help you research safety. However, you should consider that crime data can be biased, and a safe neighborhood means something different for everyone. Visiting a location at all hours of the day will give you the best understanding of how comfortable a neighborhood is. If that isn’t feasible, check out local social media groups or apps to chat with residents and hear their experiences.

Seasonal changes

Seasons can impact your mood, the entertainment options in an area and the maintenance needs of your new home. If you’re looking for a beach home and hate the winter, consider southern beaches rather than northern East Coast residences that will need winter-proofing and receive heavy snow. Seasonal population changes can also be a factor in your decision. Is your new home in a university town that will have summer slow-downs? Or is your new property in a tourist town where you’ll be one of many snowbirds flying in for the winter?Understanding what you want from a new destination — and what seasonal weather or social changes may impact your experience — can help you choose the best place for your lifestyle.

3. Visit the area

Even if you can only swing a weekend visit, seeing a prospective area in person is the best way to experience a new place and decide if it’s right for you. While visiting, think about:

How interactions with locals go
What entertainment and amenities are available
The culture of the town or city
What daily life may look like
The cost of restaurants, entertainment and shopping

Browse Google Maps to check out local shops and restaurants, and see which neighborhoods have the amenities you love. Then, spend as much time there as possible.

4. Plan your home-buying process

Buying a house in another state follows the same home-buying process as buying a home across town, but it requires some additional planning to get everything organized.

An image displays the timeline to expect when learning how to buy a house in another state.

We’ve already covered the initial steps of finding a lender and determining a general location for your vacation home. Next, the active part of home buying picks up as you chat with real estate agents, consider active listings and organize your paperwork to submit an offer. Here are some other factors to consider for your timeline:

Preferred communication among your home-buying team
Contact information for agents, lenders, etc.
Important dates like holidays or current lease expiration
Goals like a date to start getting inspection quotes
Assigned responsibilities among home buyers

You’ll also want to determine your home-buying needs and wants while considering the home’s features and your budget. Include everyone involved in the decision so you can initially chat through potential compromises and make everyone feel heard.

5. Determine your home preferences

Before you consult a real estate agent and start house shopping, you should decide what type of house and features you want. Start having conversations with your family about what they want from a vacation home and what you need to be comfortable. Making a list of your wants and needs will help you compromise while house hunting and can provide a baseline for when you should make an offer. Wants and needs are subjective, though. A family with a large dog may believe a yard is an absolute must, while someone who hates yard work may decide it’s an immediate pass. Sharing the style of house you want, your needs and wants, and your neighborhood preferences will help your home-buying team find your perfect vacation home.

6. Find a local buyer’s agent

Your real estate agent is a major asset when shopping for a new house, especially if you’re out of state. Finding the right buyer’s agent in another city can be tough, but online reviews, video conferences and phone calls can help you decide who’s right for you.

An image provides the seven typical duties of a buyer’s agent to help people learn how to buy a house in another state.

Your real estate agent doesn’t just find properties for you to consider — they can give you insight into the neighborhoods you’re interested in and the local real estate market. If you’re buying a home sight unseen, agents help you tour homes virtually, draft offer letters and closing paperwork, and recommend other real estate professionals so your whole home-buying team is top-notch. Additionally, they’ll have the details about local real estate laws and regulations you may be unfamiliar with. Each town, city, county and state can have different laws, so having your home-buying journey guided by a local professional is helpful.

7. Get videos and tour virtually

When you can’t tour a home in person, virtual tours, videos and listing pictures are the next best things. Many online home listings even include floor plans to get a better feel for a home’s layout. A good agent will take you on a virtual tour of a home via FaceTime or Zoom. They’ll help you get an honest look at the property and highlight positives or concerns based on your needs and wants. Even if you can visit a home in person, be sure to take videos and photos so you can revisit your open house experience when deciding whether to make an offer. This will also allow you to share the home with your family and friends to get their opinions.

8. Explore local property management costs

Property management costs like lawn care, cleaning, repairs and routine servicing can vary significantly between cities and states, especially if your new vacation home is in a popular tourist destination. If you will be the only resident, you can work with contractors as needed to maintain your property while you’re away. A full-service property management company may be worth investing in if you want to offer short-term rentals between your stays. With year-round residents, maintenance needs will increase, and you’ll be responsible for any repairs needed to provide tenants with a safe and comfortable home. A property management company would help take care of these concerns while you’re at home across state lines.

9. Get your finances in order

A second home will add to your recurring home ownership expenses (mortgage payments, insurance and utilities). The actual mortgage process for purchasing a second home also varies from purchasing a primary residence. You may also find your pre-approval includes a higher interest rate than you expected based on your first home-buying experience. Because second homes also mean a second mortgage and increased costs, lenders increase interest rates to accommodate the extra risk associated with a second loan.

An image provides four ways to save on a purchase when learning how to buy a second home.

If you plan to rent the house when you’re not visiting, you’ll still be responsible for the extra expenses of a second home. However, depending on how you use your home, there are tax benefits available to alleviate some of the cost. If you plan to rent the house when you’re not visiting, you’ll still be responsible for the extra expenses of a second home. However, depending on how you use your home, there are tax benefits available to alleviate some of the cost.

10. Find a trusted title agency

Title agencies are responsible for investigating the details of the property’s previous owners, structures and property lines. This is called a title search, which ensures that the current owner selling the property has full authority to do so.Financing companies will often choose a title company and oversee this process, but some states require that the buyer find a title agency. Your real estate agent and mortgage lender will be able to tell you who’s responsible for this step and can provide recommendations for reputable title companies. Title searches identify anyone who owns or has a right to the property via liens. This is important because it validates your home ownership after closing so nobody else can claim the property. Additionally, any open and undisclosed liens, like unpaid property taxes, can become your responsibility once you purchase the home. If a title search was run, the title company takes responsibility for missing these details in the title search.

11. Get a house inspection

A home inspection is another important step toward closing on your new home. Unlike the title search, a house inspection isn’t required to purchase a home, but it is highly advised. A professional home inspector will check the home’s exterior and roof, interior, electrical, plumbing, appliances and more to ensure it’s move-in ready and doesn’t require any major repairs. After the inspection, you’ll receive a report detailing what they found, including any necessary repairs or concerns. At this point, as the buyer, you have the power to re-negotiate the home’s sale price when considering the repairs. Ask the seller to complete repairs before you close or exit the deal without repercussions.Buyers who waive a house inspection agree to buy property as-is, which means a leaking roof or electrical shortage is entirely your responsibility once you complete the transfer of ownership.

12. Buy your second home

Once you’ve chosen a destination, found the perfect home, had your offer accepted, and wrapped up every step of the closing process, it’s time to finally enjoy your new vacation home!There’s no doubt that learning how to buy a house in another state requires a lot of effort, organization and time. Luckily, buying a second home is easier with Pacaso. You can:

13. Create a move-in checklist

Here's a checklist to help you stay on top important tasks before your big move to another state:No matter if the home will be your primary address or a vacation home, be sure to:

Hire movers (if necessary): Consider getting quotes from multiple movers to find the best fit for your budget and needs.
Arrange for furniture delivery: If any furniture is scheduled for delivery around your move date, confirm the details and ensure the mover’s timeline aligns with your move-in schedule.
Contact utility companies: Research providers in your new area and set up services for electricity, gas, water, trash collection and internet/cable (if applicable). Schedule a connection for your move-in date or soon after.

And if the home will be your primary address, don’t forget to:

File a change of address with the post office: You can do this online at USPS Change of Address at least a week before your move.
Register to vote in your new state: You may need to research how to register to vote in your new state. You can usually do this online or at your local DMV.
Notify cable and internet provider: Contact your current cable and internet provider to transfer service to your new address or to schedule disconnection.
Update accounts and subscriptions: Update your address with banks, credit card companies and your local county to update your driver's license.

Completing these tasks ahead of time can ensure a smoother transition to your new home in another state.

A downloadable move-in checklist for those buying a house in another state.

Buy an easier way with Pacaso

Whether it's a beachfront escape in Maui or a ski chalet in Vail, our guide makes out-of-state ownership a breeze — for primary and secondary home buyers alike.If you’re shopping for a vacation home, consider unlocking the possibilities of out-of-state ownership with Pacaso's innovative co-ownership model. You can experience a luxurious vacation property in a coveted destination without dealing with management and maintenance challenges. Spread the cost among fellow co-owners while enjoying access to a stunning property. Pacaso makes scheduling a stay simple, and ensures your home is meticulously maintained so you can relax and create unforgettable memories.

How to buy a house in another state: A step-by-step guide for second-home seekers