How To Buy and Finance Property In The U.S.A

U.S. Foreign Buyer Report 2008

2008-08-27T11:20:00.000-07:00

REALTORS® Report Foreigners Come to America to Buy Homes

WASHINGTON, August 07, 2008

International real estate purchases in the U.S. continue to be a significant share of business for many (United States) Realtors, according to the 2008 National Association of Realtors® Profile of International Home Buying Activity.

This new research indicates that international buying activity in the U.S. is widespread. NAR estimates that between 150,000 and 190,000 homes were sold to foreign nationals from May 2007 to May 2008. Recent foreign buyers purchased properties in every state and the District of Columbia. The most popular states where international buyers purchased homes are Florida, California and Texas. Arizona, New York, Washington and Nevada were also popular.

The typical international buyer purchased a single-family vacation home costing $297,400. Four in 10 paid for their U.S. property with cash, compared with 7 percent for all domestic buyers. The typical international owner stayed at his or her U.S. property for 2.6 months during the year, according to the NAR findings.

Foreign exchange rates have helped make U.S. homes more affordable for international buyers. The euro, for example, has strengthened 24 percent versus the U.S. dollar over the past two years. Home prices are also now more affordable in places such as Florida and Arizona, contributing to those states’ popularity among foreign buyers.

“Many international buyers recognize that real estate is an excellent investment and are drawn today by abundant inventory, low interest rates and a softer dollar. These conditions allow them to own their own a piece of the American dream,” Gaylord said.

International buyers are distinct from domestic buyers. International buyers tend to purchase more expensive properties, which cost an average of 36 percent more than the typical domestic buyer’s home purchase. In fact, more than 14 percent of properties sold to international buyers sold in excess of $750,000. Foreign buyers also show a greater preference for condos and townhouses compared to domestic buyers.People from North America, Europe and Asia accounted for more than 85 percent of recent foreign home buying transactions. The top six countries of origin for foreign home buyers, in rank order, were Canada, the United Kingdom, Mexico, China, India and Germany. This year, Canada replaced Mexico as the country with the largest share of foreign buyers in the U.S. The percentage of Canadian buyers doubled from last year, from 11 percent to 23.5 percent.

The 2008 NAR Profile of International Home Buying Activity is based on responses from approximately 4,000 Realtors® who serve foreign buyers. It describes international home buying activity in the U.S. over the 12-month period from May 2007 to May 2008 and updates information from the 2007 survey. The full report is available from NAR’s Research Division or at www.realtor.org/research/research/reportsintl

Steps For Getting Mortgage Financing By Foreign Buyers

2008-08-19T13:54:00.000-07:00

STEPS FOR FOREIGN BUYERS TO GET MORTGAGE FINANCING IN THE U.S.A.

Open U.S. Bank Account. Work with those banks that will allow you to do this before entering the U.S. or having to make a special trip. What they will need:
a. Complete W-8Ben form. Obtain form at http://www.irs.gov/pub/irs-pdf/fw8ben.pdf
b. Copy of Passport
c. Copy of second official form of identification to verify address and date of birth
d. Account documents will then be mailed to you to be signed and notarized. Mail back to address provided.
e. Funds needed for down payment and reserves for U.S. real esate purchase should be wired into your new account once fully established.
Apply for ITIN – Individual Taxpayer Identification Number
a. Process time is 12 – 16 weeks so it is important to do early on.
b. Form is at http://www.irs.gov/pub/irs-pdf/fw7.pdf
c. Include required documents and mail to IRS or to an approved local CPA/Accountant
Determine your best financing options by talking with professionals very experienced in handling foreign national loans
Obtain two credit reference letters from banks
Request free E-Book of the complete guide to “Buying Real Estate in the United States” by sending email to Lori@SandonGroup.com to be released August 2008.
Once you have initated the above steps, contact a real estate agent specializing in working with the international market and foreign buyers.

I would be happy to refer you to industry professionals, such as attorney's, accountants, banking representatives, real estate and mortgage professionals, etc that specialize in the foreign and international markets that I feel excel in their professions.

2008-08-13T13:15:00.000-07:00

FOREIGN INVESTMENT

Investing in U.S. Residential Real Estate

Despite the current credit crunch and market turbulence, investment in U.S. housing is a good bet as long as investors and developers consider the increasingly complex environment, writes Richard Hanson, in a Summer 2008 Real Estate Issues article published by The Counselors of Real Estate. Factors he notes to consider include changing housing demographics that favor dense urban living, rising energy costs and declining supplies, and the cost and availability of food. The article charts U.S. home prices over the past two decades and the increasing need for housing, and speaks to the impact of employment, interest rates, and energy supply along with other factors that can help both developers and foreign investors understand that the perception of weakened U.S. residential real estate markets may be more psychological than technically true.

For full 10 page detailed report, go to http://www.cre.org/memberdata/pdfs/Investing_in_Residential_RE.pdf

2008-08-12T14:54:00.000-07:00

TITLE INSURANCE

The wide availability of title insurance is one of the best reasons to buy real estate in the United States. Title insurance provides certainty to the owner and other parties such as the mortgage lender that their interests are protected. If any problems arise as to title (ownership), the owner and mortgagee are protected from economic harm.

In general, rates are often set by the State and policies can be paid for by the buyer or seller. For that reason you should verify with a mortgage loan officer or a real estate agent what is typical and standard to the area you are purchasing in.

One important consideration of purchasing property in the U.S. is how the foreign investor will hold title to the property being purchased. Generally, ownership is held as an individual or group of individuals or ownership through legal business entities.

The most common forms of ownership are Individually, Tenants in Common, Joint Tenancy with Right of Survivorship, Tenants by their Entirety, Corporate Entity and Trusts.

For the full article, see www.sandongroup.com/foreigntitle

Financing for Foreign Investors

2008-08-11T14:54:00.000-07:00

MORTGAGE FINANCING FOR FOREIGN BUYERS

Most banks and financial institutions will not make mortgage loans to foreign individuals or their corporations. However, Mortgage & Investment Consultants has put together specialized loan programs for our foreign friends and tell you what you should know before deciding to finance property in the United States of America (U.S.).

Programs for foreign buyers vary greatly as does the cost to obtain financing. U.S. Banking practices tend to be much stricter than most foreign buyers are used to so it is vital that the mortgage financing process be started very early on. The entire process from start to finish often takes 90 – 120 days or more.

For complete article http://www.sandongroup.com/foreignfinancing