How can a non-US citizen buy property in the USA?


Let’s get one thing straight right away. Non-US citizens, whether US residents or non-residents are allowed to purchase and own real estate in the United States. Therefore, foreign nationals enjoy the same rights as US citizens in the United States when it comes to real estate. Now, purchasing a property in the United States as a foreign citizen might be overwhelming, especially if unfamiliar with the US real estate industry. Therefore, this article will walk you through the whole process of buying property in America as a foreign national, covering crucial concerns for US Newcomers or recent immigrants on a visa and non-resident international investors seeking to purchase property in the United States. So, let’s see how can a non-US citizen buy property in the USA.

Investing in US Real Estate as a Non-US Citizen: A Global Opportunity with Unique Advantages

The increasingly globalized world has made it more commonplace for individuals to invest in real estate outside their home country. It’s important to recognize that the real estate market in the United States has unique characteristics that could potentially benefit non-US citizens.

It’s not only about the variety of property types and locations that make investing in US real estate attractive. The relative stability of the US real estate market compared to many other countries is also a significant draw. This stability can help protect your investment from wild swings in value, offering a sense of security that can be hard to find elsewhere.

Additionally, the US offers a robust legal system that respects and protects property rights, giving additional peace of mind to foreign buyers. This rule of law helps to give non-US citizens the same rights as US citizens when it comes to property ownership.

In addition to the tangible benefits, purchasing property is generally transparent and well-organized, making the whole experience less stressful for foreign buyers. Escrow accounts, title insurance, and standardized contracts make the transaction process more predictable and straightforward.

Despite these advantages, purchasing property in the US as a non-US citizen comes with challenges. Language barriers, cultural differences, and unfamiliarity with the local real estate market can all complicate the process. However, with careful planning, guidance from experienced real estate professionals, and a good understanding of the local market, these challenges can be overcome, leading to a successful investment in the United States.

Find the perfect location

As a foreign citizen, there are no limits on acquiring property in America. This refers to resident foreign nationals who plan to buy their new home in the US and non-resident foreign investors intending to buy an investment property or a vacation home.

When deciding where to buy a property, foreign nationals should examine factors such as commute, type of community, schools (if you have children), surrounding amenities, etc. Similarly, non-resident foreign investors should look into the top cities and states to live in the United States (and invest in real estate).

The top 5 states that are the most popular among foreign investors are Florida, California, Texas, Arizona, and New Jersey. For example, buying a property in Pompton Lakes, NJ, is becoming more and more popular over the years. With Manhattan a stone’s throw away, it’s no wonder many non-resident foreign investors invest in real estate here. So, if you’re not set on a location, this might be a great idea.

Hire a real estate agent that’s an expert in foreign real estate transactions

The first step in purchasing property is hiring a real estate agent skilled in international and foreign national transactions. This is definitely the most crucial step in this process. Why? It’s simple. There are several obstacles and potential blunders that homebuyers may face if the agent is unfamiliar with working with non-US citizen foreign investors.

The ideal real estate agent will have a professional certification, such as a CIPS (Certified International Property Specialist) accreditation. A CIPS licensee has received specific training to perform international transactions smoothly and with minimal risk. They are well-versed in working with international clientele, including foreign-born nationals residing in the United States and non-resident buyers of US real estate.

Furthermore, these professional real estate agents are frequently multilingual. They can guide you through any local state-specific norms and regulations while also being aware of your cultural or language-specific requirements.

Real estate agent-client relationship in the US

Now that you have the resources to choose a real estate agent with expertise in foreign transactions let’s look at how dealing with a real estate agent works in America. This real estate agent-client relationship might differ in your home country, so you need to be prepared.

Buyers from other nations have to execute a buyer representation agreement with their real estate agent. This means that you must read and comprehend this contract before signing it.

In the United States, the seller of the property pays the fee or commission for both the buyer’s and seller’s real estate agent. As a result, there are no real estate agent commissions or costs for working with an agent of your choosing (including a CIPS realtor) while purchasing a property in the US as a foreign citizen. Yes, that’s correct! So, you basically receive all of that expert advice and assistance at no extra expense!

What about taxes?

How can a non-US citizen buy property in the USA, and what about taxes? Besides the property tax, resident foreign national buyers who plan to use the property as their primary residence have no extra tax obligation. In addition, if you are a non-resident buyer looking to acquire an investment property in the US to generate income, you will be taxed on the net income received from the property but not on any value growth.

In most cases, a non-resident foreign buyer must get an Individual Taxpayer Identification Number (ITIN) to acquire property in America. If they do not have a Social Security Number or SSN, this is a must.

Searching for property

The first step of the property searching process is to tell your real estate agent what kind of property you’re searching for. If you’ve already located a property and wish to buy it, your agent will assist you with all of the closing formalities.

On the other hand, if you only have an idea of what type of property you want to purchase, leave the rest to your agent. They will give you several possibilities according to your wishes. In addition, your real estate agent is obligated to arrange online tours during open houses. That is if you’re not able to attend in person.

Additionally, your agent will also be able to answer any questions you may have about schools, transportation, outdoor activities, etc. Furthermore, your realtor will advise you on which items will remain with the properties you are viewing.

Making an offer

Your real estate agent will advise you on the offer you should make based on the similar properties in the neighborhood. When you make an offer, the seller has three choices. They can accept your offer, reject it, or make a counteroffer at a different price. If the seller accepts your offer, congratulations are in order! You’re one step closer to becoming an owner of a property in the US as a non-US citizen!

Signing the purchase contract with the seller

Can a non-US citizen buy property in the USA? Yes, but they need to sign the purchase contract with the seller first. This is the next step after making an offer. The contract of sale is the legal document that holds you accountable for the transaction. The price and any other terms agreed with your agent will be included in this contract. You have to make an Earnest Money Deposit of 5-10% of the sales price when signing the sales contract. This money will be in an escrow account until the property is sold.

The contract of sale will also include a provision stating that you have the right to cancel the purchase if your immigration status changes or if there is a problem with financing.

Completing the title report is a must

Once you’ve signed the contract, the following step is to get a Title Report. Your real estate agent will be able to assist you with this. A Title Report in the United States will disclose prior owners of the property and any existing liens against the property. This report is crucial because it protects the buyer. Any liabilities on the property would have to be resolved by the seller before the purchaser could take possession. You will be the only owner with no liabilities.

Final thoughts

How can a non-US citizen buy property in the USA? As you can see, it’s not an easy process. However, if you follow these steps, you won’t have any problems. In fact, this process will be as smooth as possible. If there is any key takeaway from this article, it’s that hiring an expert real estate agent is of utmost importance. You must work with someone who has extensive knowledge of foreign transactions. Only this way you’ll be able to have a successful real estate story as a non-US citizen.