Buy a house from 3,000 miles away as a first-time buyer?
February 22, 2013 2:19 PM   Subscribe

How (Should?) we buy a house on the other side of the country? We know we want to move there, but we can't go yet.

My spouse and I currently live on east coast, rent, and are in well-paid but hours-intensive jobs. Our plan is to relocate to the Bay Area, close to my spouse's family, and downshift in our careers so we can have a kid and actually spend time with him/her. This will involve a very large drop in income, so we are trying to max out our years of high earnings before doing so. The upshot is we have to stay put for about the next 2 years, but after that we will move.

We have been idly looking at real estate for the past year or so but have only seen a few homes that we like, and they seem to not remain on the market long. We are tempted to go ahead and buy a house before relocating, rent it out to friends-of-spouse who live in the area, and have a wonderful home to look forward to. We have enough saved that we could put down 30-40% now, but would still need a sizable mortgage, given housing prices.

Is this a crazy idea? What do we need to do to make it happen? My not-behemoth bank, which I would normally approach for a mortgage, has no presence in that region. One of us has an error dragging down an otherwise spotless credit report; should we wait until that finally gets corrected before seeking pre-approval? Do we need a local agent to have a serious chance of getting the house we want?
posted by anonymous to Work & Money (15 answers total) 1 user marked this as a favorite
That is an INSANE idea!

California has had it's housing busts too. With seismic activity, natural disaster and the high costs of insurance (especially on rental properties) I wouldn't touch long-distance landlording with a barge pole.

Also, you have no idea where you'll be working. If you live in Marin, you won't want to commute to the East Bay. The topography and logistics require that you know where you need to commute to, before you decide where you'll be commuting from.

Also, prices being what they are, you might end up wit a Jumbo loan, which isn't as good as some other kind of mortage, so two more years of saving can make a huge difference in what you can afford.

Stick to your plan. I PROMISE that the right house, at the right price in the right place will be waiting for you when you are ready.

Keep saving, having more money for this will only put you in a stronger position. Not a weaker one.
posted by Ruthless Bunny at 2:26 PM on February 22, 2013 [1 favorite]

I have to tell you this is a bad idea. Neighbourhoods all over are so variable, down to specific blocks or sides of the street. We Moved to a new city a few years back and rented here, in two different areas, before buying this house as first time buyers. We read up, paid attention, and followed all of the advice on smart house hunting. We still made a mistake, in that the location of this house, which was ideal on paper -- "oh you can always sell in that neighbourhood" -- has proven to be an issue for owner occupancy and is getting worse. It's the sort of thing you wouldn't know unless you had lived in this house on this block, or been to this neighbourhood at all times of day, days of the week, and times of year.

Also, not only have you never been home owners, you've never been landlords, let alone cross-country landlords. This is potentially a very large mistake in which you and your declining income may be trapped.
posted by DarlingBri at 2:29 PM on February 22, 2013

Yup, crazy idea. Who knows what will happen in 2 years, maybe one of you gets a new cushy part time job in Seattle or something. The upside to this plan is slight, and the downside could be enormous.
posted by craven_morhead at 2:30 PM on February 22, 2013 [1 favorite]

I did it the opposite way. Was living in the Bay area and purchased a house in the NY 'burbs after flying in for the weekend, looking at 4 houses and picking one. We moved into it. I think it worked out great for us, but if you are not sure about the neighborhood or are not sure about being a landlord, I would wait.
posted by JohnnyGunn at 2:32 PM on February 22, 2013 [1 favorite]

This seems kind of risky for a number of reasons.

1 - The Bay Area has very restrictive rental laws and it can be difficult to evict someone should they not be willing to move when you're ready.

2- You don't know where you'll be working so you could end up with a horrible commute.

3 - You'll have to rely on others to too large a degree, whether it's the realtor, your family, home inspector, etc.

4- What is something in your current circumstances changes drastically before you move (major illness, death, divorce, family emergency, incredible job offer somewhere else, natural disaster, etc.)

Wait, save up and buy after you move.
posted by shoesietart at 2:35 PM on February 22, 2013

And yes, you absolutely must have a local agent if you want to stand a chance buying a house in the Bay Area.

Can the spouse's family act as your local proxy, maybe tag along with the agent to a couple of places that he/she wants to show you? Even that much indirect interaction on your part is way, way better than just letting the agent go nuts.
posted by Joey Buttafoucault at 2:37 PM on February 22, 2013

I have a friend who rented out a house he owned and everything I saw leads me to believe that being a landlord is a gigantic pain in the ass. You're on the hook (24/7) for appliances and all sorts of other things. And he lived just a few doors down from the rental property.
posted by jquinby at 2:45 PM on February 22, 2013

Rent for at least a year, or five. It's not actually mandatory to own a house, and doing so in haste could really easily wreck your quality of life.

There will almost assuredly be houses for sale in a couple of years.
posted by Lyn Never at 3:01 PM on February 22, 2013 [1 favorite]

Yeah don't do this. Especially with commute concerns. I was even hesitant to get an apartment before I found a job - we ended up finally moving to one in SF (with a short MUNI commute for my fiance) and I am just hoping that I end up working somewhere convenient! The Bay Area is a rather large area, and you are going to want to get the lay of the land before buying.
posted by radioamy at 3:05 PM on February 22, 2013

I live in the Bay Area, and am paying back the bank for our house. I have as much of an incentive as anyone to run up Bay Area house prices. However...

Remember that past performance is not a reliable indicator of future profits, and that to the best of anyone's ability to predict the market, current prices include predictions about future prices. House prices are as likely to tank as they are to go stratospheric, and the people I know who have gotten heavily into rental properties as a business haven't made nearly as much money as the "Rich Dad/Poor Dad" propagandists would have you believe (unless they managed to time and get out of the big boom exactly right).

We'd love to have you in the Bay Area, but in your own time. Don't get talked into a bad idea by people who have a vested interest in promoting bubble prices.
posted by straw at 3:05 PM on February 22, 2013

Don't do this, especially if you are trying to save money for when you take a pay cut. Real estate is not an investment.
posted by murfed13 at 3:14 PM on February 22, 2013

I totally understand WHY you want to do this--in your heart, you've already decided to move, and you're ready NOW NOW NOW and so it feels like buying a house and renting it out will be doing something rather than just being stuck where you are no longer satisfied.

It's a spectacularly bad idea, for all the reasons people laid out above. If you're seriously considering this, though, why aren't you trying to plan to move sooner? I get that 2 more years of savings would be nice, but if you're ready for the kid and the downshift, I can't imagine anything worse than being stagnant for two years while you wait out the clock. You only have one life, and you don't get those years back. Not to mention, unhappily waiting for things to change has the potential to be hard on your marriage, hard on your mental health, and (possibly, IANYOBGYN) hard on your fertility if you're in your late twenties or early thirties.

I'd recommend you either find a way to re-connect with the place you're living now--see it as your last two years of childless freedom, or last chance to explore all the places and things you always wanted to do in your city before you leave it forever--or plan to move sooner. When I was in a similar position, mentally checked out and waiting to move across the country to be closer to family, we ended up making a list of all the things we wanted to do in the city before we left and started ticking them off. We took a lot of weekend trips. We hiked nearly all of the Appalachian trail in VA, WV, and MD. And it *still* took about 4 or 5 months longer than we expected for my partner to get a job in the area we wanted to move to. Listen to your gut, if it's telling you it's time to shift your life over to a new place, go with it.
posted by iminurmefi at 3:23 PM on February 22, 2013 [3 favorites]

I did this. Don't do it. It seems attractive but it's a much better idea to arrive, rent, find work, and be intimately familiar with the neighborhood you're going to live in. Two years later, I am selling the house I bought in exactly this manner so I can move somewhere that suits me better. I'm not expecting to take much of a financial bath, but the amount of effort wasted is truly stunning.

Sleep on it (for a long time). You'll make a better decision that way. (Not to mention that, anecdotally, the Bay Area market is insanely competitive right now, and you won't have the time to make leisurely choices or weigh pros and cons.)
posted by zvs at 6:01 PM on February 22, 2013 [1 favorite]

Please don't do this. The potential risks outweigh the potential benefits on a staggering level.
posted by Melsky at 3:53 AM on February 23, 2013

Move first, and rent for a while, for all the reasons given above, plus stuff that you haven't thought of yet. You should let this scheme evolve to Plan C before doing heavy investing. The devil is in the details, and you can't possibly cover them all at this time and at that distance.

(Anyhow, for my money, I'd buy a houseboat in Sausalito, right next to Shel Silverstein's barge, and take the punt over to the City every day instead of fighting that insane traffic on the Bridge. But that's just me, and I gotta admit that I've not been in the area for a while.)
posted by mule98J at 11:17 AM on February 23, 2013

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