Financial Resource

Article by Tony Riley

There are no restrictions on people from foreign countries purchasing property in the United States. However, for people from the UK who speak English and assume that as English is the language of the United States, the buying process is the same as in UK its not, taxes and requirements involved with property purchase vary from state to state, so it is essential that you take legal advice from within the state that you wish to purchase your property.

Having found your USA property and agreed on the property purchase price, you enter into a Contract of Sale (Agreement), which is legally binding. Any repairs or conditions of sale must be included within this property sale contract, as the seller is not obliged to rectify anything that is not agreed upon, when the property sale contract is drawn up.

The buyer’s obligation is to make sure all funds are in place to finalize the property purchase and the seller ensuring that the title deed is free of any charges secured against the property.

The date agreed upon for completion of the property exchange is legally binding. If the purchaser fails to complete the property purchase on the agreed date, the seller has the right to pull out of the deal and re-sell the property to another interested party if he wants..

Costs for property purchase vary between 3-5% of the cost of the property. Leaving aside the deposit on the property, many of the additional costs for the property purchase will have already been paid for example, fees for mortgage application (if required), property insurance, property inspection fee (see below. Title insurance (see below) and stamp duty.

Property Inspection (survey).

In the United States it is essential that you have the property you are thinking of buying surveyed, as when you purchase that property you are buying “as seen”. Any defects that are found after the property exchange has taken place are the responsibility of the new owner and no complaints or compensation for defects can be entered into.

Title insurance:

This protects the property purchaser from any future problems that could arise with his property should it arise that, a 3rd party had an interest in the property that wasn’t disclosed at the time of sale. An example would be that person / company my have a charge on the property and it wasn’t disclosed prior to the sale of the property. The property title insurance will protect the purchaser from any costs or loss that may occur as a result of this defect in title deed.

Property taxes vary from USA state to state and depend on whether you are declared resident or non resident of the United States of America. Local taxes pay for education and services but are lower than you would be paying in Europe. One aspect that needs looking into is inheritance tax; this can be quite complicated so it is essential that you employ a professional to assist you with this.

If you own property in your own country and would like to secure a mortgage against it to assist with property purchase in the United States of America on an equity release plan, speak with your property agent who will be able to introduce you to an independent financial adviser who will be able to assist you.

These guidelines are meant for guidance only and describe a straightforward purchase scenarios. However this information is not meant to replace proper legal advice, which we always insist you take.

Tags: insurance, property article, property exchange, state, Title, usa property