UNITED STATES OF AMERICA

Buying property in Boston, Los Angeles, New York, Portland

A Guide to Buying Property in the USA as a Foreigner

Purchasing property in the USA is possible for foreigners, even without US citizenship or a green card. However, buying a property in the US does not automatically grant residential status. The steps involved can be straightforward, but it’s important to understand the legal and financial aspects.

7-Steps to Purchasing Property in the USA…

1 Decisions
Before you begin your property search, decide on how the property will be used. Are you planning to live in it, rent it out, or use it as a vacation home or commercial premises? These decisions will influence where and what type of property you buy. If unsure about committing, renting a property in your desired area for a short period might be a good first step to determine if you want to settle there.

2 Obtain a Tax Number
A US Individual Taxpayer Identification Number (ITIN) is necessary to purchase property. Issued by the IRS, the ITIN allows foreigners to file tax returns if they do not qualify for a social security number. This number is crucial for the tax implications associated with owning property in the US.

3 Open a US Bank Account
Most mortgage lenders require foreigners to have a US bank account to facilitate the transaction. Opening the account early is recommended since lenders may want to see at least three months' worth of bank statements. You may also need to meet a minimum deposit requirement, which can range from $100,000 to over $1 million, depending on the bank.

4 Secure Financing
Mortgages are common in the US for property purchases, and foreigners can qualify for them. However, mortgage lenders require documentation such as bank statements, tax returns, and credit scores to assess your financial standing. Pre-qualifying for a mortgage can streamline the buying process by allowing you to know in advance how much you can afford.

5 Begin Your Search
Once you have your financing sorted, start your search by narrowing down the location, budget, and type of property you want. It helps to have a clear idea of the state, city, and neighbourhood where you plan to buy. Online searches and local realtors can help you find suitable properties.

6 Work with an Agent
Real estate agents in the US are experienced with property sales and can offer valuable insights into the market. When selecting an agent, look for those certified by the Certified International Property Specialist (CIPS) program. It's advisable to sign a buyer agency agreement, ensuring the agent represents your interests exclusively. The seller typically covers agent fees, which are around 6% of the purchase price.

7 Finalize the Purchase
After finding your ideal property and securing financing, it’s time to finalize the sale. This involves signing the necessary paperwork and paying the closing costs, which range between 1.5% and 7% of the purchase price. Once complete, you can move into your new property or begin any commercial operations.

Common Questions About Buying Property in the USA as a Foreigner

• Can I Buy a House in the USA as a Non-Resident?
Yes, non-residents can purchase property in the USA without holding American citizenship.

• What Are Closing Costs?
Closing costs in the USA typically range between 1.5% and 7% of the purchase price. These costs cover taxes, title insurance, agent and legal fees, and other administrative expenses.

• How Long Does It Take to Buy a House in the USA?
The process can take anywhere from 2 weeks to 2 months, depending on how long it takes to shop for and close on a property.

• Are There Taxes for Foreigners Purchasing Property?
Yes, there are tax implications for foreign property owners. It is recommended to consult with a tax specialist both in the USA and in your home country to understand your tax obligations.

• Do I Need a Lawyer or Conveyancer?
Typically, you do not need a lawyer when buying property in the USA, as real estate agents handle most of the paperwork involved in the transaction.

This guide covers the essential steps and considerations for purchasing property in the USA as a foreigner. It’s important to work with professionals like real estate agents and tax specialists to ensure a smooth buying process.

We can search, source, and provide the very best property options available for you before negotiating, securing and moving you in.

To find out more, contact us for further details.