In 2012 spent $68.2 billion purchasing properties in the United States. Their motivations were varied with 43% choosing the USA for its desirable location while another 21% felt US properties were secure investments and 27% made the investment because of the opportunity for profit. Although North American buyers (mainly Canadians) represented 31% of all transactions they were closely followed by Asians who were 26% of all buyers. The European community represented 24% while Latin Americans were at 13% of all foreign property. Detached single-family homes were the most desirable properties purchased (61%) followed by condominiums/apartments (26%) and the average price was $315,000. Buying USA properties can be challenging for first time investors and here are seven tips to make the process as painless as possible
1. Have your personal documents in order. Anyone can purchase property in the USA even if they are not US Citizens or are not green card holders or extended stay visa entrants. However, you will need at a minimum the following documentation:
– A valid foreign passport, or two or more current photo identifications such as a driver’s license, to show who you are.
– An Individual Taxpayer Identification Number. That’s a number assigned by the Internal Revenue Service to foreign nationals who need to file income tax returns.
Although property ownership isn’t tied to immigration or visa status, there are rules about how long you can stay. So if you’re not a citizen, check out U.S. visa requirements before you purchase.
2. Will you need a mortgage? The majority of foreign buyers paid cash for their property (62%) leaving another third in need of a mortgage. The U.S. banking system is familiar with international borrowers and even has Sharia compliant home financing. To get a U.S. mortgage, you must establish credit and earn a good credit score. To boost your score:
– Open U.S. bank and credit card accounts.
– Report all your income on your tax returns. Lenders use tax returns to verify your income and decide how much you can afford to borrow to buy a home.
– In addition our financial institutions that have overseas expertise can assist in security based portfolio loans and international currency transfers and verifying credit already established in your home country.
3. Work with a Keller Williams Agent who is a Keller Williams Global Property Specialist (KWGPS) with the training and experience of assisting international home buyers. Our KWGPS agents will have a team of experienced international real estate lawyers, finance professionals and title experts to that can help you protect your interests as well.
Share with your Keller Williams Agent any experience you have in purchasing US properties and what your expectations, goals and time frames are for your next purchase. Be prepared to take the time to sit with your agent for a full explanation of the US home buying process including the negotiation process. Be aware that the process of buying a property will vary between US States and regions so do not assume you’re buying experience in a previous transaction will be repeated in your next purchase. Ask your KW agent to explain how closing costs will be calculated and ask for home inspections to ensure you are purchasing a safe and sound home.
4. Learn to convert from the U.S. standard measurement into metric, or pick up a metric converter app so you can better estimate room and home sizes while shopping.
5. Don’t forget about the related costs of home ownership: In the USA you will encounter other home expenses you might not have in your country. Among these will be home owners insurance, property taxes, home owners association fees (HOA) utility fees for electricity, water and garbage service and home maintenance costs. It is wise to anticipate these extra fees and to set up a financial plan for your home so you know how much money to set aside for ongoing expenses.
6. Not fluent in English? Our KWGPS Agents will have access to people who can assist you in your native language and in many cases have affiliates in the title, finance and inspectors who are multilingual. Most title insurance companies can provide their documents in your native language however, most real estate contracts for the purchase of the property will be in English.