Have you ever wondered if a foreigner could purchase property in the United States? The purchase of a home in the United States by a non-citizen foreign national is entirely legal. Between April 2021 and March 2022, foreign buyers actually bought close to 100,000 homes in the United States. This represents about 2.5% of all homes sold at that time. Green card holders, nonpermanent residents, refugees, asylum seekers, and DACA recipients are among the eligible homebuyers.
You can probably purchase a home as long as you can get a mortgage. When purchasing as a non-citizen of the United States, there may be additional restrictions.
How Foreigners Can Purchase Homes in the United States
- Choose a Location
Choosing a location in the US to purchase a property is the first step. You can look wherever you want because there are no laws that forbid a foreign national or non-resident from purchasing real estate anywhere in the nation. Depending on whether you’re looking to buy a primary residence, vacation home, or investment property, you’ll want to consider different states and cities. However, you should conduct extensive research before selecting a specific location so you can be certain it’s a wise long-term investment.
- Explore the tax laws
Tax laws can be difficult to understand, particularly if you are a non-resident or foreign buyer of real estate in the USA. So that you are aware of what you owe, it is imperative that you research the US tax code. Fortunately, you won’t be required to pay an extra tax simply because you are a foreign national investor. However, just like any other homeowner, you will still be required to pay property taxes to the US. You will also have to pay taxes on the net income if you buy an investment property. Therefore, it might be a good idea to speak with a tax expert who is familiar with US real estate laws before you begin your search.
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- Work with a real estate broker
When you’re prepared to take your search for a home seriously, you should work with a real estate agent who has knowledge of dealing with foreigners. Finding someone knowledgeable to guide you through the process is important because it is more complicated than working only with US citizens. The agent’s commission is deducted from the seller’s profit in the US. Therefore, working with a realtor has few drawbacks for buyers, and they will offer knowledge of the local real estate market that you may lack.
- Look for homes and submit an offer
You can begin looking at properties with the assistance of your agent. The best option would probably be to travel to the US to see the properties in person, but if that is not possible, your agent can show you the properties via video tour. When you locate a home that meets your requirements, consult with your agent to determine a reasonable asking price before putting in an offer. The seller will then have the option to accept, reject, or make a counteroffer, to which you will also have the option to reply.
- Do your Due Diligence as foreign national
The due diligence period starts once you and the seller agree on a reasonable price. Now is your chance to examine the property and determine its value and condition. During this time, you should inspect your home to look for any structural problems. Additionally, you should conduct an appraisal to make sure your offer is in line with the value of the property. If the examination or evaluation turns up any problems, you can go back to the negotiating table. However, you will finalize the purchase agreement with the seller if everything is in order.
- Gather the Money or Obtain a Mortgage Loan
You should start collecting the necessary funds after you’ve signed the purchase agreement to get ready for closing. When purchasing a home in the US, a foreign national frequently pay cash, though obtaining a mortgage is an option. Because so many non-citizens lack a US credit score, it can be challenging to obtain a conventional mortgage in the US. However, some banks provide loans designed specifically for foreigners and recent immigrants. So, before the closing, have your agent assist you in exploring your options and completing the underwriting process.
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- Close on the Property as foreign national
All that’s left to do is sign the contracts and close on the property once your financing is in place. Right before the closing, you should perform a final walkthrough. If you are unable to physically attend, you can still do this virtually. The deed will then formally be transferred into your name after you have signed all the required paperwork. The house is legally yours once the closing is over.
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