If you are a foreigner and want to buy property in the US, don't panic! It's possible! Read this, and contact me for more information!
How to purchase a home in the U.S.
The term "global marketplace" has never been more descriptive - particularly when it comes to real estate.
According to the National Association of Realtors, international buyers purchased more than $68.2 billion in U.S. residential real estate from March 2012 to March 2013, across all 50 states. Property sales in the United States to foreign buyers amount to more than 6 percent of total U.S. home sales in value.
Whether you're an international investor, a Canadian snowbird or a first-generation immigrant living in the United States, purchasing in an unfamiliar market can be daunting.
This information is really helpful to understand the basics, but it doesn't replace the expertise of an experienced real estate agent. For more information, contact me and I will gladly help!
1) Determine how the property will be used
Before you start your property search, it's important to think ahead to how you'll use the home once the deal is done.
Will this be a vacation home?
A home to stay in while doing business in the United States?
A home for your children while they attend college in the States?
An investment?
An eventual long-term residence?
SIMPLY BUYING REAL ESTATE in the United States does not give foreign owners any rights or privileges regarding legal stay or status.
By determining the primary use for your property and how long you plan to own it, you'll be able to provide information to your real estate agent that will help guide the search and sale.
2) The U.S. real estate market works
EACH STATE IN THE UNITED STATES has its own set of rules regarding the purchase of real estate, including the type of purchase contract used, the method of closing the sale and even the duties and titles of the individuals involved.
Several important U.S. real estate practices worth noting:
In the United States, real estate listing information is shared by agents using multiple listing services and consumers can access that same information using real estate sites. Agents do have a particular tool called MLS, which does not allow unlicensed people to use it.
In some countries, it is typical to pay a fee to the agents who are scouting properties on your behalf and showing you around. In the United States, the sales commission is paid by the seller, so buyers DON'T PAY ANYTHING to have an agent work on their behalf.
In the United States, real estate agents need licenses to operate. The licensing system was designed to ensure real estate agents are qualified to guide consumers through the maze of finding, evaluating and financing real estate.
Foreign buyers will also want to give consideration to issues such as currency exchange rates, international wire transfers, banking systems, multi-national taxation and accounting issues, and import/export restrictions regarding currency and household goods.
3) Work with local real estate professionals
Foreign buyers (A.k.a. "YOU"!), in particular, should take the time to find qualified and experienced professionals to walk you through the real estate purchasing process.
IF YOU'RE NOT FLUENT IN ENGLISH, or prefer speaking in your native language, choose agents, attorneys, inspectors and bankers who are conversant in your native language. While it may be possible to get translated copies of standard real estate documents, it's likely that you will have to sign the English versions when it comes time to close the deal.
Assembling a qualified team will take some time, but a well connected agent should be able to get fast the people YOU need, to make the experience less stressful for you.
4) Find financing
Qualified foreign buyers with a 30 to 40 percent down payment can often obtain financing for their U.S. real estate purchases. MANY BANKS REQUIRE FOREIGN BUYERS to have a specific amount ($100,000 or more) on deposit with the bank while others set loan limits of $1 million to $2 million. You may also be required to present a minimum of three months of bank statements.
The U.S. home loan market offers an array of safe, affordable mortgages.
Before applying for a U.S. mortgage, you must first establish credit and earn a good credit score. You'll also want to be sure to report all income on your tax returns. Lenders use this income information to determine how much money they're willing to loan you to buy a home.
When the time comes to apply for a mortgage, consider major banks with global operations. These lenders will have the experience necessary to verify credit established in other countries and to guide you through the U.S. home-buying process.
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