How to Buy Property in the USA? – A Step-by-Step Guide
Written by: Neelam Shahzadi
Reviewed by: Majid Hussain
For foreign investors, sharing a common language does not imply that purchasing a property in the United States is simpler than in other nations of low to no English skills. The US has its unique legal and immigration framework. More so, it can be challenging to close the best deals when you do not have a chance to view the property in real life.
Legend Properties has become a rising real estate firm in Pakistan and the UK for those looking to expand their business, relocate for work, or study in the US territories. We leverage our wide network to guide our clients to the most appropriate investments.
Before knowing how to buy a house in the USA, learn about what makes it worthy to invest your new home in.
Why Buy a House in the USA?
Here are what makes USA property investments most appealing to foreign investors:
1. Strong Economy
Specialists express optimism about the US’ ongoing positive trends on economic health, anticipating this robust economy will persist. New job opportunities, high employment rates, reduced tax burdens, and a rise in well-paying roles bolsters this economic strength. A flourishing economy also means a booming real estate market.
2. A Great Market for Foreign Investors
The United States continues to warmly welcome international real estate investors from countries such as the UK, Canada, China, and Singapore, making it an opportune moment for those considering investing in American real estate.
Investing in the US property market is not only for the ultra-wealthy. There are many attractive investment options where the initial costs are lower and rental returns promising. Specific tax benefits for international investors can significantly enhance profitability.
3. Plenty of Choices for Low-Priced Properties
he United States offers a wealth of affordable real estate opportunities. Surprisingly, American homes present exceptional value for money. While it is true that the most fashionable and affluent areas in cities such as Miami, New York, and San Francisco command high prices, majority of the countries in the US tells a different story.
International buyers are often astonished at the real estate bargains available. Take, for instance, the possibility of acquiring a standalone house near the attractions of Disney World in Orlando, Florida, complete with a swimming pool and backyard, for the equivalent cost of a modest one-bedroom apartment in an average town in the UK.
4. Opportunities to Rent to Tourists
Popular tourist spots are a great place to earn passive income by renting out to vacationers. Orlando, Florida, remains a perennial favourite among travellers. On the other hand, Seattle, Washington, has been highlighted by Lonely Planet as a must-visit destination. Houston, Texas is celebrated for its exceptional value. The last two cities appear to be on an upward trajectory in terms of tourism.
5. Myriad Choices Outside the Major Cities
Due to soaring costs in major urban centres such as New York, Chicago, and Los Angeles, many people have been moving to smaller, less prominent “second-tier cities.” They find their money of more value in these areas, as they can access more budget-friendly housing options of the same quality. An influx of residents in these lesser populated cities make these areas a wise investment opportunity for the long term.
6. Attractive and Spacious Home Options
American residences are renowned for their appealing aesthetics, featuring expansive living spaces that abundantly welcome sunlight. This sharply contrasts the current home design trends in the UK, which had been gravitating toward more compact living spaces in the recent years, mainly due to limited building spaces.
Across the United States, a diverse array of stunning properties awaits, ranging from the quintessential New England homes with iconic clapboard exteriors and charming white picket fences to the luxurious villas in Orlando and the sleek condos along the California coast.
How to Buy Property in the USA: A Seven-Step Process
If you are wondering where to start, we will give you clearer steps ahead. The following will guide you:
Step 1: Create a BriefDraft a comprehensive outline first
This will serve as a guide for you and your real estate agent, ensuring your search aligns with your property type, location, and budget desires. This will greatly help maintain your focus, as it is common to veer off track during the home-buying process.
To construct your outline, be sure to be clear about your buying motives, lifestyle preferences, and specific requirements. Establish a budget early on, clarify your financing options, and set a realistic timeline for your purchase. The more detailed you can be in this planning phase, the better the property search will be.
Step 2: Find the Right Estate Agent
Securing an adept agent is crucial. Choose someone who specialises in the type of property you are interested in, holds proper certification, and truly listens and aligns with your needs. It is wise to pick your agent or realtor in advance and share your precise requirements before starting the house hunting.
Step 3: Hire the Rest of Your Team
Building the rest of your team is essential for acquiring a property in the US. You will need a seasoned attorney to guide you through any local legal complexities, a currency expert for converting your money into dollars, and most preferably a financial advisor, too, to ensure sound financial dealings.
Foreign investors will also need the help of visa consultancy firms if they plan to acquire citizenship or a permanent residency in the USA. Given the potentially lengthy nature of this process, initiating it as soon as possible is advisable.
Step 4: Start Your Property Search
Solidify your preferred location and type of property. Then, proceed to explore real estate listings within your chosen locale. By this stage, you should already have a clear understanding of your financial strategy so that you can immediately determine and close exceptional deals, such as those on a foreclosure or short sale.
Step 5: Organise Inspection Visits
It is advisable to schedule a visit to the area you are interested in once you and your real estate agent have narrowed down your options. This allows you to explore various neighbourhoods and communities, engage with locals, explore retail options, and check out the attractions nearby to find the perfect location.
If your stay in the USA will be significant, consider renting a property in one of the neighbourhoods you are interested in instead of staying in a hotel. Experiencing life in the community for a short period, even if it is just for a couple of weeks, can provide a deeper understanding of the area and help you decide if it suits your needs. This approach is an effective way to ensure the area meets your expectations.
Step 6: Get Your Finances in Place
Before making an offer on a property, it is essential to discuss options with your financial advisor first, whether you use your savings, secure a mortgage, or figure out which other avenues to explore. Ensure that you have made arrangements for payment in dollars with your currency specialist, too.
You may need to engage experts from various areas to perform the property purchase holistically and appropriately.
Step 7: Make an Offer
With your financial arrangements secured, you can confidently submit an offer for your ideal home. Negotiations over price, conditions, and the anticipated closing date will ensue. Once an agreement advantageous to both sides are achieved, you can move forward with buying the property.
Your legal representative will examine the property’s documents and the transaction details. You will then sign a sales contract and pay for the deposit. This also presents the perfect chance to inspect the property’s condition further.
Step 8: Complete the Deal
Once all the paperwork has been completed, you can finalise the purchase and make your financial arrangements.
Taxes and Fees When Purchasing Property in the US as a Non-Resident
Before purchasing a property in the US, know the taxes and fees involved. The initial costs vary, with some expenses borne by the buyer and others by the seller. Some taxes are paid once; others are recurring. Typically, non-resident buyers pay at the following rates:
- Title search and insurance, ranging from 0.5% to 1% of the property value
- Recording fees, between 0.2% and 0.5%
- Legal fees, ranging from 0.5% to 1%
Other Property Taxes
Local taxes and fees may apply. Rental income must be declared and paid tax in the US. Furthermore, capital gains tax applies to the gains when the property is sold.
Unlike in the UK, non-US citizens enjoy a lower threshold for estate tax. All these property tax implications highlight the importance of tax planning around property ownership in the US.
Frequently Asked Questions
Before buying property in America, you need proof of identity, address, resident status, income, and affordability.
Foreigners can buy any type of property in the US, from single-family units and condos to commercial properties. However, it can be difficult for foreign investors to purchase from a housing cooperative.
Yes, foreigners can purchase property in the US with minimal restrictions, though non-residents may face additional challenges compared to US citizens.
How Legend Properties Can Help
Owning your dream property in the USA, while full of potential, can seem daunting. The US’ real estate market and legal procedures can be very complex. But with the right guidance and expertise, securing the best deals will be smooth sailing and rewarding.
Legend Properties is here to make your investment dreams a reality. With our massive market knowledge and network, we ensure comprehensive support throughout your journey, ensuring a hassle-free experience. Your dream home in the USA awaits, and we cannot wait to help you make it yours. Contact us today!
Reviewed by:
Experience hones, but constantly embracing learning and versatility is what brings you to the top. I have had several years of experience behind me regarding sales and team management in a handful of prestigious companies in the country, and even so, I yearn for further professional and personal growth; hence, the various trainings and courses I attended. Read More