The real estate industry in the United States has had its ups and downs. But despite these cyclical changes, the real estate remains one of the best investment vehicles in the US. It comes as no surprise that the US real estate market attracts not just local buyers but foreign buyers as well. According to the National Association of Realtors (NAR) report, foreign buyers spent $153 billion in US residential property in April 2016 – March 2017. This posts a $102.6-billion increase from the previous year.
International buyers favor the US real estate market for several reasons, including currency issues, diversification, stable returns, and attractive foreign investment programs that lead to US citizenship. After all, the United States is considered a great country to migrate to, due to its openness and high quality of life.
Quite understandably, many potential international investors are skeptical (and even feel daunted) about purchasing in a foreign market. It’s true that laws and rules in a different country may be different. But what’s great with the real estate market is that it’s quite welcoming to foreign buyers.
Before investing in the US real estate market, it would help to learn how it works. Below are some important real estate practices and facts foreign investors should know:
- Real estate transactions, rules, and laws may differ depending on which state the investment will be put. Rules regarding the sale and purchase of real estate also vary depending on the duties and titles of the seller/buyer, the method of closing the sale, and the type of contract used.
- Real estate properties are posted in real estate listing services where information is available to agents and buyers. This is not like other real estate markets where buyers need to go through different agents in the search for a property. There are even sites that cater to foreign real estate buyers.
- Real estate agents receive a commission from the seller so buyers don’t need to pay them. In some countries, buyers usually pay the services of an agent who looks for potential properties; this is aside from the contract price.
- Real estate agents are required to get licenses to operate. Each state has different licensing laws that set the minimum educational requirement, examinations, training, continuing education, and other requisites. The real estate agent licensing system ensures that agents are qualified to help buyers throughout the entire processing of real estate purchases. In some countries, such as Belize, Mexico, El Salvador, and Costa Rica, real estate agents are not required to hold licenses.
- Foreign buyers need to look into other considerations such as international money transfers, accounting and taxation issues, exchange rates, and import/export restrictions on household goods and currency.
Hopefully, this guide gives you a quick peek into how real estate in the US works. However, this overview should not serve as a substitute for the expert knowledge and experience of licensed real estate agents, accountants, mortgage brokers, and attorneys. If you’re keen on investing in the US real estate market, you’ll surely have to consult an expert to get a deeper understanding of how you’ll make the most of your investment.