- More than one in four properties were inspected virtually in July.
- Sight unseen allows buyers and renters to remotely view a property.
- Physical inspections are still recommended before signing on the dotted line.
Jumping on the floorboards and knocking on the walls when inspecting a house is becoming less of a priority for some, as purchases and rental agreements conducted sight unseen have grown in popularity.
The Sight Unseen reports by Little Hinges, which analysed over 350,000 virtual inspections, found that the average percentage of properties inspected sight unseen by interstate buyers had increased to 28.9% in July. While the average percentage of rentals viewed sight unseen from interstate also increased to 25.5%.
“The percentages of buyers inspecting property from interstate are the highest they have been since the beginning of the year, and the percentage of sight unseen rental inspections are the highest they have been since we started analysing our digital rental inspection data in January 2023,” said Little Hinges CMO, Mike York.
In July, 6.6% of properties were also viewed by international buyers, while rentals saw an average of 8.3% viewed internationally.
Sight unseen sparked out of necessity
The pandemic was a driving factor for the growth of digital inspections, particularly when leaving the house was not an option.
“During lockdowns, both locals and people planning to move interstate needed to secure a property before they arrived and were not always able to carry out physical inspections, meaning virtual inspections became a necessity,” said Real Estate Institute of Queensland (REIQ) CEO, Antonia Mercorella.
The popularity of sight unseen inspections is still apparent, which can be attributed, in part, to the development of technologies used for digital inspections, along with improved methods for digitally viewing properties.
“The pandemic has been a catalyst for greater adoption and recognition of innovative technological solutions. For example, virtual house inspections, virtual auctions, and electronic signing have become an expectation rather than a rare exception,” said Mercorella.
Sight unseen follows the cycle
“When interstate investors are very active in a rising market, they heavily use sight unseen purchasing. However, when rents stabilise or fall and the gap is greater for price versus rent, we seem to see sight unseen purchases decline,” said Elders real estate agent, Justine Dill.
An investors domain?
Savvy Fox Property Buyers Agent and Valuer’s director, Jacqueline Dwyer, told The Property Tribune that time is one of the main factors driving sight unseen, along with the financial commitment behind inspections, including time off work and travel costs.
“Inventors tend to be more comfortable with it because they see it as a business transaction and they are less emotional about the property,” Dwyer said.
The ease of use is also an attraction, recounted Dill.
“I have just sold a home in Newtown to an interstate investor. It makes it very easy for them when we do a FaceTime video before an open home so they can also have the benefit of seeing the home and surrounding neighbourhood rather than just relying on photos and an agent’s perspective on a property,” she said.
Not living in the meta quite yet
Despite these benefits and recent improvements to virtual inspections, many buyers and renters are still swiping left on sight unseen.
Dill said that while someone can virtually view the property:
“The downside is that they may not fully understand the area or demand for the home as they would if there in person and experiencing the whole open home scenario.”
Alternatives include calling on trusted professionals, such as buyers agents, to do proper due diligence, said Dwyer.
Mercorella added, “A physical inspection provides a vital opportunity to conduct a thorough visual inspection, inside and outside of the property, so you can assess its condition and any potential signs of damage to note for seeking expert opinion.”
“Virtual inspections can be very useful for time poor and physically distanced buyers and tenants, but there’s no replacement for a physical inspection.”