How Can International Buyers Ensure They Are Safe and Successful When Purchasing Homes in America?
In the Forbes report on Why the Best Investment in 2016 Might be Global Real Estate data shows that “the U.S. is the only place to be with 94% saying they will increase their investments here this year.” Joining the masses of global investors and billions in capital flowing into America this year are many first time international home buyers and vacation home buyers. While the U.S. is ranked as one of the safest and most profitable places to purchase real estate in the world, it has its challenges too. This is especially true for those buying property in the USA for the first time. There are domestic and foreign fraudsters, inexperienced agents, and a new process to navigate. How can they stay safe and make smart moves they’ll be proud of for years?Disclaimer: The following content is purely designed as informational material and opinion, not as personalized professional legal or accounting advice. Contact your licensed professionals for their guidance on the best moves for your unique situation before finalizing any decisions.
The Dangers & Red Flags of Buying in America Today
All of the pitfalls of buying real estate in a new country can be directly linked to lack of awareness and knowledge. The more you know the fewer surprises, and less risk there will be.This predominately means learning the mechanics of buying and owning property in a new country. However, it also means being alert to current types of common real estate and finance fraud, and the red flags that may indicate danger.
According to Realty411, the FTC, and FBI, current threats may include:
- Identity theft
- Wire fraud
- Title and deed issues
- Falsifying mortgage loan applications
- Occupancy fraud
- Bait and switch practices
- Misrepresentation of property condition
6 Tips for Staying Safe When Buying U.S. Real Estate
1. Know the Buying ProcessStart here, and learn more about the local best practices and related costs from a licensed local professional…
- Consult a local real estate professional
- Shortlist properties online
- View your final selections by video or in person
- Make an offer in writing
- Obtain the counter signed sales contract
- Complete due diligence, inspections, order insurance
- Schedule a closing date by mail, online, or in-person
- Fund your transaction and receive your keys
Choose a guide that knows the business, how to best help foreign buyers, is transparent, puts you and long term business relationships first, and is proactive about potential challenges. Look for length of time in business, reviews from other clients, licenses, and dedication to learning and affiliations with trusted industry organizations.
3. Verify Everything
Verify the identities of the real estate agents helping you and that you are really dealing with the person you think you are. Verify the existence of the property and its current location and legal property description. Verify rents and values.
4. Watch What You Sign
Do not sign anything that isn’t accurate. Double check everything you are signing, including the fine print. If it isn’t 100% correct ensure it is fixed before you sign.
5. Be Careful Where You Send Funds
Deposits and settlement funds should be carefully and securely sent only through trusted and financially sound licensed entities with a solid track record. Never send any monies directly to a seller or personally to an agent.
6. Obtain Insurance
Life insurance is not required when buying a property or taking out a property loan in the U.S. However, all buyers should obtain an Owner’s Policy from a reputable title insurance company, as well as property insurances to cover the asset.