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United States of America (USA) - Buying Property
Once you have found the right home, the following is typical of the purchase process:
- You should have already agreed with a lender regarding a mortgage. United States lenders will often lend to foreign nationals with the proper income and employment verification.
- Place an offer on the property through a contract. The offer negotiations can go back and forth numerous times. However, an offer is a binding contract so once the seller agrees to it, this starts the formal purchase process.
- A deposit is placed in escrow, made by the buyer, to the seller. This earnest money is to show your good intentions to purchase the property.
- The buyer is responsible for all inspections and appraisals. Inspections are not always necessary, unless the lender requires it. However, all lenders will require an appraisal to be conducted to ensure the value of the property meets the loan amount at least.
- A title search is conducted. This title search is part of the closing documents and generally performed by the real estate agent as part of their service.
- Once this is complete, a final sale is recorded through a deed of sale contract which is then filed with the county. At this point, all funds need to change hands and transfer of the possession of the property occurs.
The entire process of purchasing real estate in the United States is likely to take between 30 and 60 days, or sooner if payment in cash is made rather than a loan. However, it can also take much longer depending on how fast both the buyer and the seller want to move.
Finding a Reputable Lawyer
Whilst a lawyer is not necessary for completing a home purchase, an expat might want to retain the services of one to ensure that no unfair advantage is taken. They also might be useful in getting some of the paperwork pushed through in a more timely manner. A foreign national must be able to prove that he/she has a legal right to reside in the United States before purchasing a home. Foreign assets and holdings may need to be figured in to assess the candidate’s purchasing eligibility. A qualified attorney may also be helpful in this matter.
Every state has a lawyer referral service that can recommend lawyers capable of completing this service. However, most legal referral services are booked up and often too busy to answer a phone so it may be easier to find an attorney by going online and searching for real estate attorneys in the local area.
What Fees are Involved?
There are many fees involved in purchasing a house. There are some that are mandatory such as purchasing home owner’s insurance and there are some that are not necessary but are recommended like private mortgage insurance. What is necessary is determined by the state and the financial institutions brokering the sale. They include but are not limited to title insurance, escrow fees, credit report fees, survey fees, property taxes (mandatory), state recording fees, inspection fees, document preparation fees, origination fees and appraisal fees.
System for Deeds and Property Registration
Each state has its own method for handling deeds and property registration. Usually this is done at the county court house. The fees and taxes involved will vary not only by state but also by the purchase price of the property. This type of information once it is recorded is a matter of public record and can be found by anyone who chooses to look for it.
Pitfalls and Problems Most Often Encountered by Expats
The most common problem that expats have when trying to purchase a home is getting all of the correct documentation together. This will include things such as proof that they are legally eligible to reside in the United States as well as all foreign property holding or bank account documentation.
Another thing that expats might find to be a huge problem is the fact that even if they are approved for a mortgage there is a larger percentage asked to be paid up front (up to a 50% down payment), as well as a higher interest rate compared to American born citizens.
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