How to Buy Real Estate in the US: What Foreign Investors Need to Consider

The American housing market remains a global leader among foreign investors. In 2024, total foreign investment in American real estate reached $68.2 billion, with 54% of transactions involving residential properties and 28% targeting commercial real estate.

This level of trust is driven by the country’s relative economic stability, underpinned by a high GDP of $27.3 trillion. Moreover, the market is open to foreign buyers, and local services enable remote property purchases.

In this article, we will explore what foreign investors need to know when purchasing real estate in the U.S., whether for personal use or rental income, and what legal nuances they may encounter in the process.

Key Aspects of Property Ownership in the U.S.

Unlike many other countries, the United States imposes virtually no restrictions on foreign citizens purchasing real estate. Regardless of residency status, foreigners can acquire residential, commercial, or investment properties. However, there are important nuances depending on the form of ownership:

• Sole ownership. This structure suits individuals purchasing property for personal use or rental income. The owner has full control over the asset and is directly liable for any debts or obligations, including those to the bank. In the event of legal action, there is no intermediary entity to protect the owner’s personal interests.
• Joint tenancy or tenancy in common. These are forms of shared ownership commonly used when property is purchased by multiple individuals (e.g., spouses or business partners). They offer flexibility in dividing ownership shares, either with or without rights of survivorship. However, co-ownership can lead to conflicts, especially in cases of disagreement between parties.
• Ownership via LLC (Limited Liability Company). This is the most popular option among foreign American property investments. An LLC is registered in the U.S. and becomes the legal owner of the property. If the property is subject to a lawsuit, only the LLC’s assets (such as the real estate itself or its financial accounts) are at risk—not the personal assets of its members. The downside is the cost of forming and maintaining the LLC, which ranges from $500 to $2000 annually, depending on the state.
• Trusts. Trusts are typically used for complex investment strategies or estate planning. They also offer personal asset protection, but they require ongoing legal support and carry annual costs starting at around $3000.

The Process of Buying Real Estate in the U.S.

The process of buying a house in America as a foreigner begins with a title search, which verifies that the property is free of liens, debts, or legal disputes. If the title is clear, an independent home inspection is typically arranged at a cost of $300—$600 to assess the property’s physical condition.

If financing is involved, an appraisal is also required by the lender to confirm the market value of the property. This usually costs between $400 and $800.

Once inspections and appraisals are complete, both parties negotiate and sign a Purchase Agreement, which outlines the terms of the sale, timelines, and possible contingencies. The last ones are conditions under which the buyer can back out without penalties (e.g., if mortgage approval is denied).

The buyer’s funds and transaction documents are then transferred to escrow, a neutral third party that secures the transaction. The escrow period typically lasts 30 to 60 days and costs 1–2% of the property price. Once all contractual obligations are met, escrow is closed and ownership is transferred to the buyer.

Closing takes place after signing the final paperwork (including the deed and mortgage documents) and paying closing costs, which range from 2% to 5% of the property price. These costs include taxes (property tax in the USA for foreigners), title registration fees, and escrow service charges. Ownership is formally transferred via registration with the county recorder’s office.

Important Note: Purchasing property in the U.S. does not grant the buyer any automatic immigration benefits such as a visa, green card, or citizenship. This often comes as a surprise to foreign investors. Most use a B-2 tourist visa for short visits (up to 6 months) or a B-1 business visa to manage their investments.

Remote Real Estate Purchases in the U.S.

There are no legal restrictions for buying a house in the USA for non-residents without being physically present. Both state laws and federal regulations allow the use of electronic signatures for real estate transactions, enabling the entire process to be conducted digitally.

Foreign buyers can purchase any type of property remotely, ranging from residential homes and condominiums to commercial buildings and multifamily complexes. For instance, in 2024, according to US real estate market data, 15% of condominiums in Miami were purchased remotely by foreign buyers.

Key stages of remote property acquisition:

1. Property search. Investors typically use platforms like Zillow, Redfin, Realtor.com, and LoopNet (for commercial properties). These platforms offer 3D tours and video walkthroughs, allowing thorough remote inspections. Hiring a licensed real estate agent is highly recommended. A qualified agent coordinates the search, arranges virtual showings, and negotiates on the buyer’s behalf. Ideally, the agent should hold the CIPS (Certified International Property Specialist) designation issued by the National Association of Realtors (NAR).
2. Due diligence. A title company conducts a legal review of the property’s history to confirm it is free of liens, debts, or disputes. All documentation and title reports can be delivered electronically. Investors also hire a licensed home inspector, who provides a detailed inspection report, complete with photos, videos, and descriptions of the property’s condition. If financing is involved or an independent market cost of property in the USA valuation is required, the bank or investor orders a formal appraisal.
3. Transaction execution. The Purchase Agreement is signed via secure electronic signature platforms. Funds are transferred to a neutral escrow account, ensuring security for both parties. Buyers can also use Remote Online Notarization (RON) to notarize documents from abroad, as allowed in most U.S. states.

After completing all documentation, the buyer transfers funds via international wire transfer (SWIFT) to close the transaction. Typical wire fees include a commission of 0.5–1% of the transferred amount, plus fixed bank charges ($20—$50). Upon closing, ownership is recorded, and the buyer officially receives the property title.

Property Prices in the U.S.

Before analyzing the US housing market prices, it’s essential to understand the main types of properties available in the country. Each category has distinct characteristics that affect price levels, maintenance costs, and investment potential.

Main types of real estate in the property market in the USA:

Housing prices in the U.S. vary significantly by region. The median home price nationwide is approximately $412,000, but in high-demand areas, it is notably higher: in Florida, median prices exceed $580,000 and in California, they surpass $820,000. For commercial real estate, average prices for office space in major cities is $2000—$4000/m² and $1000—$1500/m² for warehouses. Prices for multi-unit residential buildings in the U.S. start at around $1 million for small complexes in second-tier cities like Charlotte, North Carolina, and can reach $10 million or more in major metropolitan areas.

Average cost of house in the USA:

Luxury property prices in America:

The housing market in the USA at the state level has a substantial impact on average home prices across the country. However, the figures vary widely. For example, the most expensive housing is found in Hawaii, the District of Columbia (Washington, D.C.), and California. In contrast, the most affordable properties are typically located in Iowa, Arkansas, and Kentucky.

Average American home price by state (selected popular markets):

Mortgage in the U.S.

American home mortgages are available to foreigners in the United States, but the terms are stricter compared to those offered to residents, largely due to the limited number of banks willing to work with non-residents. In 2024, approximately 40% of foreign buyers used home loans in the USA, although they required 30–50% of down payment, compared to 3–20% for U.S. citizens and residents.

Home loan rates in America also differ. As of 2025, U.S. citizens and residents can expect rates of 5–6% for 30-year fixed mortgages (source: Freddie Mac), while non-residents typically face rates in the range of 6–8%. Currently, the US home loan interest rate is 6.77%.

In addition to standard income verification through tax returns or bank statements, foreign buyers must provide positive credit history in their country of origin (or in the U.S., if available) and proof of financial reserves sufficient to cover 6–12 months of mortgage payments.

The average mortgage in the United States for new loans is around $2300 per month, excluding property taxes and insurance. When including taxes and homeowners insurance, the total monthly payment typically averages $2800–3100. For homeowners who took out mortgages before 2022, the average payment is usually lower, around $1500–1700 per month.

In 2022, the mortgage market essentially broke down: within a few months, the average 30-year housing interest rates in the US jumped from 3.2% to over 7%. The main driver was the Federal Reserve’s aggressive rate hikes aimed at curbing inflation. As a result, new loans became drastically more expensive: a $400,000 mortgage that cost about $1700/month at the start of the year shot up to around $2700/month by year’s end, with the same loan term.

Banks that offer mortgages to foreigners purchasing U.S. property include:

• Bank of America.
• Wells Fargo.
• HSBC.
• East West Bank.
• Global Mortgage Group.
• Angel Oak Mortgage.

Mortgage applications in the U.S. can be submitted online or through a broker and must include all required documentation, along with a passport and ITIN (Individual Taxpayer Identification Number). The review process typically takes 2 to 4 weeks.

Taxes in the U.S.

Property taxes in the United States apply to both residents and non-residents. A non-resident is defined as someone who spends less than 183 days per year in the U.S. or does not hold a green card. The primary tax foreign property owners must pay is the Property Tax, which does not have a fixed federal rate; it is set independently by each state (and sometimes by counties or municipalities within the state).

US property tax rate by state:

There are no states with no property tax states in the USA. This is because property tax is a key source of revenue for local governments, which use it to fund schools, police, fire departments, and other essential public services.

Non-residents are also subject to property taxes in America. This includes individuals who spend less than 183 days per year in the U.S. or do not hold a green card. The main tax that must be paid is the property tax in the U.S. (Property Tax), which has no fixed federal rate and is set by individual state governments at their discretion.

In addition to real estate tax in the United States, non-residents pay a withholding tax on rental income in the U.S. The IRS withholds 30% of rental income. However, if during the operation of the property the owner spent money on maintenance and repairs, they can file Form W-8ECI and a tax return using Form 1040NR to have those expenses deducted from the taxable amount.

When selling property, a non-resident must pay capital gains tax in the U.S. This tax applies to the profit made from the sale and is 15–20% of the gain (the difference between the purchase and sale price). For example, if a house was purchased for $400,000 and later sold for $500,000, the net gain would be $100,000. The tax due would be 15%, or $15,000.

The final tax worth noting is the estate tax. This applies to non-residents whose U.S.-based assets exceed $60,000. The estate tax rate can be up to 40%.

Property Insurance in the U.S.

Home insurance in the USA is a critical aspect, especially for foreign investors. The country includes many regions with an elevated risk of flooding, wildfires, and hurricanes. In 2024, around 95% of property owners had insurance, including 60% of foreign investors. It is important to understand that property insurance is not mandatory at the federal level, but in certain cases, it is required.

Mandatory US property insurance:

• Mortgage financing. If a property is purchased using a mortgage, banks (such as Bank of America, HSBC) require homeowners insurance in the USA to protect against damages (e.g., fire, hurricane, theft). This is a mandatory condition of the loan agreement.
• Condominiums and townhouses. Homeowners associations (HOA) often require insurance that covers common areas (such as roofs, elevators) and personal liability.

If an investor purchases a home with cash and does not rent it out (e.g., for personal use), home insurance in America is not legally required. However, without it, the owner bears full financial responsibility for any damages. Even in low-risk areas, it is highly recommended to insure the property.

How to Search for Real Estate in the U.S.

Property search in the USA has become significantly easier for foreign investors thanks to the development of online platforms. In 2024, 97% of buyers used the internet to search for property, and 43% began the process by browsing online listings. In addition to well-known American real estate websites such as Zillow, Realtor, and Redfin, you can choose your dream home in the U.S. residential real estate section of Realting.com.

Real estate agencies are valuable for foreign investors because they provide legal support and understand the nuances of the local property market in the US.

• RE/MAX. A global network specializing in residential and commercial real estate. Popular among international clients due to its worldwide presence.
• Century 21. An international brand operating in 80+ countries, suitable for cross-border investors.
• Coldwell Banker. A subsidiary of Anywhere Real Estate, with a strong focus on luxury properties (e.g., Manhattan, Miami).
• Howard Hanna. The third-largest private brokerage in the U.S., active in 9 states, including Pennsylvania and Ohio.

Real estate agents in America charge a commission of 5–6% of the sale price, which is equally split between the buyer and the seller. For example, for a home priced at $400,000, the total commission would be $24,000, with each party paying $12,000. For non-residents, it is highly recommended to hire agents with experience in international transactions.