There is a well-documented pattern in real estate that every agent working a desirable market should understand: out-of-town buyers tend to pay more than local ones for comparable homes. It is not random, and it is not simply that they have deeper pockets. The research points to specific, predictable psychology, and understanding it helps you serve these buyers honestly instead of standing by while the market quietly overcharges them.
The key study here is by Lambson, McQueen, and Slade, who examined the Phoenix market and found that out-of-state buyers paid a measurable premium for real estate. Part of that premium came from higher search costs. An out-of-town buyer cannot spend six months touring every option and learning the micro-market the way a local can. They fly in for a weekend, see a handful of homes, and need to decide, so they shorten their search and accept a property sooner, sometimes at a higher price than a patient local would pay. But a big part of the premium was anchoring. Buyers coming from more expensive markets carried their home-market price expectations with them and used those as a reference point. To a buyer relocating from a pricey coastal city, a home in a more affordable market looks like a bargain even when it is priced above local value, because they are unconsciously comparing it to what the same house would cost back home. That anchor, imported from a completely different market, leads them to overpay relative to what an informed local would ever offer.
This connects directly to the broader anchoring research: people latch onto a reference number and then adjust insufficiently away from it, and here the reference number is the buyer's home market, thousands of miles from the property they are actually buying. The wider behavioral real estate literature documents this kind of imported-anchor effect, along with the way information barriers, not knowing the neighborhoods, the school lines, the recent price trends, push distant buyers toward properties that are easier to value and toward prices that quietly favor the seller. The out-of-town buyer is negotiating half-blind, and half-blind buyers pay more.
Now the ethical question, because there is one and it matters. This pattern can be exploited, and some agents do exploit it, steering relocation buyers toward overpriced homes and letting the imported anchor do the work. That is not the play I am recommending, and beyond the ethics, it is simply bad business. The reputation you build in a market is worth vastly more than one inflated commission, and relocation buyers talk to each other. The smart, sustainable play is to be the agent who closes the information gap for out-of-town buyers rather than the one who profits from it. You become their local intelligence: real comps, honest neighborhood context, the trends and quirks they could never see from three states away. You help them re-anchor on this market's reality instead of their old one.
Counterintuitively, this makes you more valuable to those exact buyers, not less. An out-of-town buyer usually knows, on some level, that they are at an information disadvantage, and they are often quietly anxious about overpaying in an unfamiliar place where they do not know anyone. The agent who visibly, proactively protects them from that mistake earns deep trust fast, and trust in a relocation buyer is worth a fortune, because it turns into referrals to everyone else relocating from the same company, the same city, the same social network. Corporate relocations especially move in clusters. Serve one transferring executive honestly and you can end up the trusted agent for their whole company's incoming moves. You trade a possible one-time markup for a durable, compounding stream of grateful, well-served clients.
There is a broader principle here that applies well beyond relocation buyers. Wherever a client has an information disadvantage, and in real estate they almost always do, you have a choice about which side of that gap to stand on. You can let the gap quietly work in your short-term favor, or you can position yourself as the person who closes it for them. The second choice is slower to pay off and occasionally costs you a fatter commission on a single deal. It is also the entire foundation of a referral-based business, which is the only kind of real estate business that actually compounds over a career. Trust is the asset you are building. Everything else is just a transaction that happens along the way.
So when you spot an out-of-town buyer, recognize the psychology quietly at work. They are likely anchored on a more expensive market, short on local information, and moving on a compressed timeline, which is exactly the combination that leads people to overpay. You can let the market take advantage of that, or you can be the agent who levels the field and becomes indispensable in the process. One of those is a quick buck. The other is a career. It is not a hard choice, and happily, the honest path is also the more profitable one over any horizon longer than a single deal.