What to Do When Buying a Home Out of State Means a Lower Cost of Living

Buying a home out of state? You're likely planning for a new job, new climate, new experiences, and even new prices. While the dollar looks and feels the same across locations, its value depends on where it’s spent, and the prices of housing, food, and services can vary quite a bit across the U.S.

Let’s say you’re one of those lucky souls who’s moving from a high cost of living area to a low cost of living area. You’re used to the big city life in a cramped apartment and homes that seem like mansions in your new area are well within your budget.

That's exciting news and may mean it's the perfect time for you to buy! Keep these three things in mind as you search for your new home, especially if you’re moving to a low cost of living area.  

Don’t match your old rent payment

It’s tempting to simply plan for a mortgage payment that matches your old rent payment.

After all those years cooped up in an apartment, you deserve this. And the logic seems sound--you could afford it then, you can afford it now. The trouble is that you can easily end up overpaying for a home with this mentality.

Sure, a three bedroom for the same cost of your old studio apartment seems like a steal, but it might not be in your new location.

Start your search just like you would in any other location--determine what you value and need in a living space. Whether it's space to entertain, room to grow your family, or access to certain amenities, make a list and use it as you search.

It’s not every day you agree to pay hundreds of thousands of dollars over decades, so be sure you’re making a smart investment that complements your lifestyle. 

On top of knowing your wants and needs, rely on the same tried and true real estate rules when you’re moving to a low cost of living area. Pay attention to:

  • Comparable listings (“comps”)
  • Sales
  • Square footage
  • Property age
  • Value of desirable neighborhoods and locations

These key metrics will help you gauge if homes are appropriately priced.

Tap into local expertise

The best way to collect comps, find ideal neighborhoods, and stay disciplined is to work with a great realtor.

Don’t have close friends and family in the area to ask for referrals? Tap into your social network. You might be surprised that an old friend went to college in your new town or a friend of a friend has lived there for years.

It’s also worth checking with your future employer and coworkers. One of them might have been in your shoes a few years back. And then there’s always online resources like Realtor.com, Zillow.com, and local realtor websites. Whether you get a referral or not, be sure to ask these five questions before hiring an agent.

As you interview agents, also pay special attention to their local expertise. Being new to town, it’s especially tough to know a good location from a bad one.

That unfamiliarity can cost you, so quiz your prospective agent for additional details about the community, neighborhoods, school district, safety, and so on. Find an agent with hyperlocal knowledge so you can find the best listings at the right price. Don't forget to do your own social media research to find the right neighborhood!

Be patient

Moving and buying a home can easily become a rushed process, especially when you’re relocating for work or family.

Cramming a lengthy process into a couple of weekends can lead to overpaying or picking a home in the wrong area. Working with an experienced agent can help mitigate these issues, but often it’s best to live and experience your new city before purchasing.

If you have the luxury of staying with a friend, having work foot the bill, or renting over the short term, you’ll have the time to find the right house, not just the first one. Don’t underestimate the value of patience when it comes to finding the perfect location for your new home.