According to the latest census numbers, over 64% of American families own their own homes.  Unlike most countries in the world, the United States of America does not impose a citizenship requirement on land purchases, which makes the process of buying real estate in all 50 states uniform for both foreigners and US citizens.  There are no extra charges or hidden fees for a non-citizen to buy property in the US, nor are there any specific visa requirements.  It is worth noting, however, that non-residents are charged a tax at disposition of their US-based real estate, so it is advisable to plan ahead to mitigate the effect of or completely avoid that tax.  There are several ways to do that legally and effectively, most of which will be discussed in subsequent articles.

Technically speaking you don’t need an agent to buy real property in the United States.  However, buying real estate is a complicated process for anyone, let alone someone who does not live in the country and, in most cases, does not speak the language well enough to adequately represent himself.  You also need to know that in most real estate transactions the seller pays commission to his listing broker, usually 4-6% total, which is then split between the listing agent and the selling agent (the one who finds the buyer).  Since it costs the buyer nothing to hire an agent to represent him exclusively in a real estate transaction, it almost makes no sense not to do it.

There are a plethora of real estate agencies to choose from, including big national firms and smaller local outfits.  I would recommend interviewing at least several agents just to get a feel for their market knowledge and personal fit.

In the United States, real estate agents cannot operate without a valid license.  That gives you at least some assurance that the agent you are looking to hire has undergone at least the basic training and has a minimally required amount of knowledge about buying and selling real estate.

I would recommend looking for an experienced agent with a solid knowledge of the local market that you are interested in.  An experienced professional will prove invaluable in helping you navigate through all the phases of your transaction, from the initial search to the negotiation to closing.  You will find that the market knowledge and experience are most valuable assets that your agent could bring to the table.  It is also important to find someone you can trust and feel comfortable working with.

Access to Financing

In a traditional real estate transaction there would be a down payment around 20% of the purchase price and the rest would be financed.  The down payment amount can be adjusted up or down depending on other factors, but usually a sizeable down payment is required to get access to financing.  The balance is then financed through a large national bank with the buyer signing a promissory note and a deed of trust (or a mortgage) using the newly purchased home as collateral.

While opening a bank account in the US is a relatively easy task, getting financing for real estate purchase is far from easy.  For most home purchases a straightforward loan application with a bank would require a solid credit history and a steady income.  There could be other financing options available, but those would require thorough planning and guidance from an experienced real estate or mortgage broker.  In general, interest rates in the United States are at their historical lows right now.  Also, the rate for owner-occupied home is usually lower than for an investment property.  Obtaining financing for someone without credit history and/or steady verifiable income (not necessarily US-based) might become problematic.  However, with proper guidance from a market professional it can be done.

 Alexander Solonin

Astrum Realty, California, USA. Contact for expert advice on California and Virginia real estate