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The 23 Questions Chinese Ask When Buying a Home in the U.S.


Buying a home in the United States is now the choice of many people, whether it's for their own retirement or for a better future for their children. Many of our friends have asked us about buying a property in the United States, and there are many different questions. A brief summary of US property knowledge is given here.

1Q: Can a foreigner without green card purchase property in the United States?
Can a Chinese buy a house in the US? Yes. Any foreigner can buy a house in the US. The United States is an immigrant country that welcomes foreigners to invest or buy property in the United States, and there are almost no restrictions on buying property. At the same time, the laws are transparent and open, and the process of buying a home is relatively straightforward compared to other countries. Anyone can buy US property, as long as you have a Chinese passport, you can complete the purchase transaction, even if you do not have a US visa, you can also complete the transaction by fax.

2Q: Can I immigrate when I buy a house in the US?
Currently, the most popular immigration destinations, such as the United States, Australia, the United Kingdom, Canada, are economically developed countries, generally will not use the homebuying-immigration to attract foreign investment. So in most countries, buying a house and emigrating are two completely unrelated things. But if you want to immigrate, you can choose the convenient way of immigration - EB-5 investment immigration policy.?

3Q: Do I have to come to the U.S. in person to buy a house in the U.S.?
Theoretically, you don't have to come to the US to buy a house in person. But in the process of viewing and selecting a home, it is best if you can do it in person. In some cases, the investor entrusted his friend to look at the house for him, and he selected the house from the information, pictures, etc. given to him by the friend. This is an example of how to buy a U.S. property without leaving home.

4Q?How much does it cost to buy a house in the US?
The United States is a popular country. In Los Angeles and San Francisco in California, homes in good school districts are priced about $1 million, Irvine has $500,000 to $800,000, to the Diamond bar - Walnut priced at around $500,000. Silicon Valley is red hot right now, with some $700,000 to $200,000.

5Q: What is the down payment required to buy a home in a major US city?
When buying a home in the U.S., it is common practice to make a 20% down payment and then use the mortgage to pay for the rest. The real estate information website Zillow reports that the average 20 per cent down payment in the U.S. is equivalent to $36,500. But the actual amount varies greatly depending on the location of the house and the price you want to buy. Housing in California is usually among the most expensive, and buying a home in states like North Carolina and Ohio is much cheaper.

Housing selection
6Q: What are the types of houses in the US?
In the residential category, properties are usually divided into detached houses, condos, and townhouses. A detached cottage is one of the most numerous types of houses in the United States. It is in a single house built on a certain piece of land. Homeownership in the United States consists of land and buildings. Apartments are usually rows of connected houses, with five, ten or more, and you can own one of them, which can be in the form of one, two or three floors. There is not much difference between a townhouse and a condo, townhouses are generally more luxurious and it usually consists of two or three buildings. Townhouse houses are usually one or two storeys and rarely use three storeys. The land owned by condos and townhouses is only that portion occupied by the building, sometimes with a small portion of the yard.

7Q: What type of property can I buy in the U.S.?
Laws vary from state to state, but most states do not restrict foreigners from purchasing residential and commercial properties, such as the major East and West Coast states: California, Florida, New York, etc. A few states, such as New Mexico and Oklahoma, require only citizenship or residency to purchase local residential and commercial real estate, and most states have restrictions on strategic lands such as agriculture and mining.

8Q: Is it better to buy a new home or a used home in the US?
In the U.S., most of the homes on the market are used, accounting for 85 per cent of the total number of homes listed on the market; relatively few new homes are newly built, accounting for only 15 per cent. This is very different from the real estate market in mainland China. In California, most of the good lots are already occupied by the old residential communities, so the general large-scale development of new housing lots will be slightly partial, but the new housing type design is new and efficient, the houses are more intelligent, and generally equipped with modern luxury. Buyers can move in directly after buying, without needing any housing renovation. It is advisable to ask a professional agent to help you weigh the pros and cons of new and used homes.

Buying Procedures
9Q: What documents do I need to prepare to buy a home in the US?
There are different preparation issues for cash buyers and loan buyers.
Documents required for a cash buyer: 1. A valid passport and visa 2. Proof of funds for the purchase of a home (certificate of deposit in English from a domestic bank) 3. An account number with a local bank in the United States.
A mortgaged buyer needs to prepare documents 1, a valid passport and visa 2, proof of work, income from work (the office or street certificate, notary company translation) 3, proof of funds for the self-payment part (bank deposit certificate in English and Chinese) 4, account number opened in the United States local bank.

10Q: What is the basic process of buying a home in the US? How is the process different from that of buying a house in China?
Just do the following 10 steps, you can easily buy your American dream house 1, online home selection 2, communication and negotiation 3, on-site home inspection 4, loan prequalification 5, home inspection 6, sign the contract 7, loan approval 8, purchase insurance 9, closing notary 10, home handover.
The entire process of buying a home in the United States is complicated and rigorous, going through layer upon layer of procedures. In other words, the chances of cheating and defaults in the property transfer will be reduced to a minimum. The whole process of buying and selling you can consult a domestic professional real estate company consultant. The real estate company will choose a responsible, experienced broker for you as your buyer's agent, and you do not have to worry too much about the rest.

11Q: How much money do I have to prepare to buy a house in the US?
The cost of buying a home in the United States includes 1, local property prices in the United States (around $340k-700k) 2, some easily overlooked but have to pay related costs (5%-7% of the house price) 3, U.S. property taxes (0.5%-3%). Let's take the purchase of a $500,000 property in the United States as an example, the buyer needs to prepare the capital: the total price of the property $500,000 + related expenses (5-7%) + first-year property tax (0.5-3%) = $540,000, the above expenses do not include the property entrusted management, rental fees.
The additional costs of buying a home in the United States cannot be ignored, and the budget for buying a home in the United States will increase. It is recommended that home buyers should know in advance and plan their purchase accordingly.

12Q: How to remit funds to the United States to buy a home?
If you have a company in China or the U.S., there should be no problem to remit or transfer funds to or from the U.S. If you are a personal remittance, you will be subject to the restrictions of foreign exchange control, you cannot send the funds in one go, need to remit in batches. This way you need more time to prepare early, and it's best if you have an account with a bank in the US. Therefore, if you have the opportunity to visit the United States before you buy a home, it will be very helpful to open an account in the future. For specific money transfer procedures, you can consult your local bank or a professional real estate company consultant.

13Q: How much commission do I have to pay my broker to buy a home in the US?
You don't have to pay any commission to a broker to buy a home in the US unless you agree otherwise.

14Q: How do I know how much is the property tax for the house I want to buy?
The property tax rate varies from state to state in the United States. In California, the property tax rate is generally 1.2%-2.0%, including county, city and local taxes. Before you buy a home, you can refer to the homeowner's tax rate and ask a professional real estate consultant or broker to help you calculate it. If you want to know the exact number, it will take you a little time to find out at the county local tax unit. This tax rate may vary from year to year.

15Q: How do I secure a transaction when buying a home in the US?
The two key issues in a property transaction are whether the title is clear and marketable and whether the transaction funds are secure. Both of these issues can be resolved with a title insurance company. The title insurance company is to provide home buyers with the investigation, title insurance, capital supervision, registration and other services to ensure the safety and security of the title and to be able to trade legally, as a close guard to protect the rights and interests of home buyers. Even if they really encounter trouble, the worst results can also get the money back, to the maximum extent possible to protect the rights and interests of users.

16Q: Can I get a loan to buy a house in the US?
Of course, in general, the down payment for overseas buyers is relatively high, must be more than 35% and you can loan up to $2 million. However, overseas investors have a longer application cycle for loans in the U.S., where review and determination of the buyer's ability to repay are key. Once it passes the review, the operation process is similar to that in China. In the United States, common home loan terms are 30 years, 15 years, 7 years, 5 years, 3 years.

17Q: How do I get a home loan in the US? How much can I borrow?
The process of applying for a home loan in the United States is similar to the process of applying for a home loan in China, which is broadly divided into selecting a lender - getting pre-qualified by the lender - lender reviewing the applicant's qualifications - property evaluation - lender lending.
In the United States, the core principles of home mortgage origination are that the collateral is of sufficient value, that the applicant is in good standing and has an ongoing source of income, and that there is no direct correlation to the applicant's nationality or status itself. Currently, in the vast majority of US states, foreigners (without a US green card) can purchase US property with a loan, but the down payment usually accounts for 40-50%, and because there is no US credit history or proof of income source per se, the lender will ask the borrower to pay an additional 1-2% interest above market level.

18Q: What documentation is required to apply for a home loan in the United States?
If you are able to pay a high down payment and interest on the loan, the loan application at the operational level need to prepare the following documents: 1, sufficient to complete the down payment and other transaction costs of today's proof (deposit period of at least 60 days) 2, provide proof of assets in the United States or abroad 3, passport 4, proof of recent income (payroll or tax returns) 5, credit history, relevant domestic credit report, credit references 6, have a U.S. bank account (not necessarily the lending bank) 7, the transaction contract for the sale of the house 8, provide proof of current address.

19Q: What banks are faster, more convenient and less worrying for Chinese customers to buy a home loan in the United States?
The usual US loans are called Full-Doc loans, which require a high level of resident status, income, etc. Chinese customers come to the United States to buy a house, because there is no local income, will look for some special loans, such as China American Bank. Such loans have slightly higher interest, but generally require at least 40% of the down payment and a relatively high deposit, sometimes HSBC also has similar loans. You can also find some private equity funds.

20Q: If I buy a house in the U.S., can my child apply to attend a public school in the U.S.?
Most public schools in the U.S. do not issue student visas, but there are a few public schools that do issue I-20s (check with the school you want to attend before coming to the U.S.). So if you just bought a house in the U.S. and have no other status, your children will need a student visa to both studies in the U.S. and to stay in the U.S. legally as students.
In the past, public schools only required a utility bill, rental agreement or property certificate from your residence to enrol your child in a public school at your address. It is recommended that you check with your local school or consult a professional before buying a home in the United States.

21Q: Will I be able to go to the surrounding schools after buying a U.S. school district house?
In the United States, public secondary and primary schools (including one-year kindergarten) have adopted the principle of "proximity". Good schools will inevitably attract parents to buy "school district housing", which in turn will drive up property prices. U.S. law entitles any child, including children whose parents are stowaways, to free education as long as they reside in the school district.

Return on Investment
22Q: What are some of the major cities in the U.S. with high returns on real estate investment? What's the trend? How much is it currently?
New York, Los Angeles, San Francisco, Boston, Seattle, etc. are the cities with the highest return on investment in the U.S. at the moment, and will be on an upward trend in the future, with an increase of around 2.9% - 8.7%.
Currently, in California, the gross rental rate of return after renting a house can usually reach 7-9%. After deducting the cost of holding and management, the net return averages between 5-6%. If it's in a metropolitan area, it's better to rent accordingly, with general rental returns in the 4%-10% range. Texas leads the U.S. in rental yields, at 10 to 15 per cent. Excluding expenses such as taxes and fees, which range from nearly 4 to 5 per cent, rental returns on homes in the region can be as high as 10 per cent.

23Q: How do you determine the profit of selling a home in the US?
U.S. home selling profit is the adjusted sale price minus the adjusted cost. The adjusted cost is the purchase price minus sales commissions, attorney fees, etc. The adjusted asking price is the selling price minus the cost of capital improvement. The Internal Revenue Service (IRS) has tighter controls on refurbishment costs, such as the cost of repairing a water heater cannot be included as a refurbishment cost, but the installation of a dishwasher can. For example, you can deduct the wages of your employees but not your own wages. The IRS also requires sellers to file detailed profit calculations annually. Receipt for refurbishment costs (Receipt) should be properly maintained.

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