An article in the Washington Post has highlighted the fact that a foreign buyer could potentially complicate a real estate deal.
If the buyer for your house is foreign then this may raise concerns that selling to someone who isn’t a US citizen could complicate the closing process. Common worries include concerns about additional paperwork or problems clearing the buyer’s funds, or potential challenges if a mortgage is required.
The article outlines a few steps that you can take to make sure the deal isn’t delayed. Experts advise sellers with foreign buyers to be prepared for unexpected turns in the closing process. It’s quite possible that an international buyer may choose to negotiate a deal slightly differently based on their traditions and culture and this could mean they want to negotiate right up to closing. This isn’t always the case and some may accept the sales price with little or zero haggling.
When it comes to a foreigner applying for a mortgage then different rules can apply. It can be difficult for lenders to verify international credit and assets and it could be that a larger down payment is needed to be deposited into a US bank as proof of the buyer’s ability to repay the mortgage. A foreign buyer’s ability to even get a mortgage can depend on their residency status and most international buyers tend to be permanent residents who have a green card or non-permanent residents with a valid work visa. They can also be foreign nationals whose primary residence is in a different country. It is necessary for foreign buyers to obtain an individual taxpayer identification number if they don’t qualify for a Social Security number.
Between April 2014 and March 2015 more than 200,000 homes were sold to non-resident and resident foreigners, according to figures from the National Association of Realtors. These foreign buyers spent more than $100 billion on US property and real estate agents who deal with international buyers saw an increase of 7% compared to last year.
Working with a realtor who is experienced with international clients can be useful as some of these transactions are significantly more complex than domestic sales. A realtor who knows how to cope with these differences can make or break a sale. Sellers are advised to look for real estate agents who are trained in the cultural traditions and legalities that can arise when dealing with foreign buyers. Often these types of transactions are made by buyers who have a limited amount of time to spend in the country and who need to make a quick decision.
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