Buying Real Estates in the USA – Main Elements of the Transaction

Buying Real Estates in the USA - Main Elements of the TransactionBuying a real estate in the USA is an excellent investment even if you are not going to live in this country permanently. By purchasing an apartment or house in America, you get a number of advantages:

  • the opportunity to live and relax at the resort at any time of the year;
  • earnings on rent, while housing will be free.

In addition, you need to take into account that the rate of real estate is constantly leveling up, which implies that there is always an opportunity to profitably sell on real estate.

There are interesting statistics showing that over 20% of US real estate sales are from foreign buyers. It happens because the United States is one of those states where the ownership of real estate testifies to the wealth of the owner and confirms his high standard of living.

Buying a private house or apartment in the United States is more of a significant life step than an ordinary purchase of real estate. After all, owning an apartment in this country implies to be a successful person.

Types of real estate in the USA

The following real estate options can be found on the American market:

  • single family house;
  • condo or apartment in an apartment building;
  • townhouse;
  • cooperative (co-op).

A private house, as a rule, is owned by the family, while other types of real estate involve the neighborhood of several owners. In this case, the owner’s association takes over the property’s management.

In the simplest case, they determine the amount of regular payments and the costs that will be covered at their expense. However, the association often decides whether owners can keep dogs, cats and other pets in their homes, and the number, weight and species of these animals can be defined. In addition, the association can set the rules for renting out housing and even decide who can and who cannot become the owner or live in the house/appartment.

A cooperative is a special form of ownership. It involves joint ownership of real estate. Each co-owner in a cooperative does not buy a separate apartment, but receives a certain number of shares in the common property in relation to the value of his apartment.

Buying a home that belongs to an association has its own characteristics. In particular, you must first apply to join the association and pay the fee. In addition, it will be more difficult to issue a loan to buy housing from a cooperative, as the approval of the cooperative will be required. This will limit your options for both buying and selling (since the potential buyer will also need to get approval).

What defines the value of real estate?

For housing in Miami, as an example, you will have to pay a round sum, ranging from $ 100,000 ending in millions. It all depends on several factors:

  • building area, proximity to the ocean;
  • type of housing – house, apartment, townhouse, villa;
  • the age of the real estate;
  • square of the appartment.

It is clear that the larger and newer the apartment or house, the more expensive it will cost you to buy it.

How to purchase real estate in America?

If you purhase a home for your own money, then you need to:

  • open an account with one of the US banks;
  • deposit funds;
  • get a bank certificate for a real estate company.

Cash when buying real estate in the United States is used inactively. The point is, in order to pay for the purchase with such a large amount of money, you need to provide evidence that the money was earned or received in another way, but in a legal one. Therefore, most often a deposit is made during the transaction, and then the entire amount is transferred to the seller’s account.

Can I issue a loan to purchase a housing?

Another way to purchase real estate in America is to use mortgage lending, which is well developed in the USA. The procedure for issuing a mortgage loan is pretty simple. All that you need for its application:

  • identity documents;
  • certificate from the bank about your solvency;
  • visa if you are a foreigner.

If the bank is convinced of your solvency as a client, then the mortgage loan will be issued quickly.

After you have decided on the source of finance, with the choice of housing, you need to draw up an offer-proposal. A realtor can help in its preparation. A prerequisite for making a deal is a deposit of 1-2%. If within 5 days you have not completed the purchase and sale agreement, then the deposit will not be returned. At the time of signing the agreement, another part of the deposit of 5-10% is paid, the remaining amount is transferred to the account.

Stages of the transaction for buying real estate

  1. Choosing a realtor (broker). You can buy a house without the help of a real estate broker / agent, but you shouldn’t. This specialist represents the interests of the buyer at all stages of the transaction, helps to bring down the price, warns of potential problems with the house. It should be a professional who is able to answer all questions clearly and honestly.
  2. Registration of pre-approval letter. No broker will start looking for suitable options until the buyer has proven his financial viability. To do this, you need to provide a letter from the bank confirming that you can take out a loan. If your own savings are enough for the transaction, make sure that they are in your personal account. A bank statement on the state of a personal account is also suitable for proving solvency.
  3. Search for suitable properties. Brokers have access to real estate databases. This will make your searches faster. In addition, a specialist will promptly draw your attention to important nuances for each option.
  4. Search for a lawyer. Another specialist who will help you with the execution of the transaction is a lawyer. You can search for it yourself, or you can trust the broker’s connections. The legal purity of the transaction depends on the lawyer, and, consequently, your future rights to real estate.
  5. Building up an offer to the seller. When you have found a suitable house, you need to make an offer to the seller. The document is a standard contract indicating the terms on which you are ready to make a deal. If you have several interesting real estate options, no one will forbid you to send out several offers at once. With prior consent from the seller, you make a deposit. Then you will have 5 days for a detailed inspection of the house and discussion of all points of the agreement, as well as for making amendments with the support of a lawyer. At this stage, you can leave the deal with impunity, but already on the 6th day, the refusal will be fraught with the deposit loss.
  6. Real estate appraisal. The appraisal of a house or apartment is carried out by an independent expert. This stage is important for a banking institution. If the assessed value is lower than the value requested by the seller, you may be denied a loan.
  7. Legal check. The purpose of the procedure is to estimate the legal purity of the property. This includes checking whether the owners have mortgage debt (this is the task of the escro company or the buyer’s lawyer). At the same time, insurance is drawn up (the title company is engaged in this).
  8. Receiving a response from the bank about the possibility of lending known as loan commitment. The bank needs about 3-4 weeks to issue a loan confirmation. It is better to refrain from applying for additional loans during this period.
  9. Carrying out a transaction. Registration of the transaction is carried out in the office of the title company. You need to appear with a full package of documents (the broker will acquaint you with the list of necessary papers) and with the agreed amount of money. The transaction itself is carried out by lawyers. And if there are no additional problems, you become the owner of your dream home. If, in the course of registration, any nuances have arisen, the transaction is postponed until all troubles preventing its implementation are eliminated.
  10. Money transfer. The principal amount is credited to the seller’s account after the transaction is closed. At the same stage, additional costs are paid, incl. taxes.

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