How can foreigners buy property in USA – A Complete Guide

Home buying process in USA for foreign nationals
14 min read

Buying a house in the US as a foreign national can be quite intimidating, especially if you are not aware of how the US real estate process works. If you are looking to buy a house in the USA, either as a US newcomer on visas such as H1-B, L-1, etc., or a non-resident foreign investor, you can find out more about how to purchase property in the USA from start to finish by reading this definitive guide. 

This guide provides information on buying property in America as a foreign national from start to finish, including important considerations for US Newcomers or recent immigrants on a visa or non-resident foreign investors looking to buy property in the USA. 

Landscape of foreign real estate transactions in the US

Per the National Association of Realtors (NAR), Foreign nationals purchased $74 billion worth of US existing home sales during April 2019 March 2020 ($153B at its peak in 2017). Additionally, 60% of foreign buyers were recent immigrants (newcomers) or visa holders in the United States. The remaining ~40% are non-resident buyers.  

Foreigners bought 107,000 existing home units worth $54.4 Billion from April 2020 – March 2021, down 30% in terms of the number of units (154,000 units during the same period last year) and down 27% in terms of dollar volume ($74 Billion during the same period last year).

This decrease can be attributed to the shrinking of foreign travel due to Covid-19.

The following infographic provides insight into the landscape of foreign real estate transactions in the US:

Infographic for foreign real estate transactions in the US
Foreign Real Estate Transactions from Apr’19-Mar’20, Source: NAR

Step-by-step process for foreigners to buy a house in USA

Following is a step-by-step guide on the home buying process in the US for foreigners looking to buy property in the USA –

Step 1 – Decide where you want to buy the house in the USA 

There are no restrictions in the United States on purchasing a property as a foreign national. This applies to resident foreign nationals who might want to buy property for primary residence based on where they currently live in the USA or Non-resident foreign investors looking to buy property for vacation or investment use.  

While determining where to buy a house, resident foreign nationals should consider factors like commute, community type, schools (if you have kids), amenities nearby, etc. Likewise, non-resident foreign investors should research the USA’s best cities and states to live in (and invest in real estate).  

List of top states where Foreigners buy property in USA:

List of top states in USA where Foreign Nationals buy
The top states where Foreign Nationals buy; Source: National Association of Realtors (NAR)

Step 2 – Find a Real Estate Agent experienced in foreign real estate transactions

Before buying property, the first step is to find a real estate agent or realtor experienced in international and foreign national transactions. Finding a realtor with experience in handling international transactions is imperative because there are many hurdles and potential mistakes that buyers can make if the agent is not experienced in working with foreign nationals who want to buy a house in the USA on a visa such as H1-B, L-1, etc. or non-resident foreign investors interested in U.S. real estate investment.  

Ideally, the right real estate agent should have an expert qualification such as a CIPS (Certified International Property Specialist) designation. A CIPS designee has undergone specialized training to complete international transactions seamlessly with reduced risk. They have the expertise to work with international clients – both foreign-born individuals residing in the US and non-resident buyers of US real estate. In addition, these specialized real-estate agents are usually fluent in multiple languages. They can help you find your way around any local state-specific rules and regulations while being knowledgeable about your cultural or language-specific needs.

The CIPS designation is the only international designation recognized by the National Association of REALTORS® in the USA.  

HomeAbroad can help you find the best CIPS real estate agent in your desired purchase area with expertise in international real estate transactions in the US. Click below to connect with a real estate agent with international expertise in your desired purchase location in the USA.  

Find the best real estate agent with international expertise

Connect with a local US real estate agent(s) with CIPS designation

Step 3 – Working with the Real Estate Agent in the USA 

Now that you have the tools to find the real estate agent experienced in international transactions, let’s understand how working with the real estate agent works in the United States. It might be different in your home country.  

Foreign national buyers should be prepared to sign a buyer representation agreement with the real estate agent. Therefore, you must read and understand this document before signing it. 

In the United States, the property seller covers the fee or commission for the buyer’s and the seller’s real estate agent. Hence, there is no real estate agent commission or fees for working with a real estate agent of your choice (including a CIPS realtor) while buying a house in the USA as a foreign national. Yes, that’s right! So you pretty much get all that expert advice and guidance at no additional cost to you

Step 4 – Understand your real estate tax situation  

The United States is often considered the land of opportunity. The government wants to make sure that this sentiment remains true by ensuring there are no additional taxes for non-resident investors in US real estate, unlike other countries that might subject you to additional taxes for buying property as a non-resident foreign buyer.  

Resident foreign national buyers who intend to use the house as a primary residence don’t have any additional tax liability other than the property tax.  

If you are a non-resident buyer interested in purchasing an investment property in the USA for the production of income, you will owe taxes on net income earned from the property but not on any appreciation in value.  

Non-resident foreign investors will be required to pay their property taxes on US property like any other US citizen. In addition, foreign buyers will have additional tax obligations if they generate income from a rental property in the US or sell US property for a gain on the sale.

In most situations, a non-resident foreign buyer will be required to get an Individual Taxpayer Identification Number (ITIN) to purchase property in the United States (if you don’t have a Social Security Number or SSN). This can be completed through the process outlined here. Your real estate agent experienced in international transactions can also assist you with this.  

Step 5 – Start your home search process with the Real Estate agent 

The first step will be letting your real estate agent know what type of property you are looking for. If you have already found a home and want to buy it, your agent will help with all the closing details for this purchase.  

If not, your real estate agent will show you various options online and arrange to visit those homes during open houses if you are a resident foreign national buyer.  

If you are an overseas buyer looking to buy property in the US, your real estate agent will show you options by showing pictures and videos of housing that meets your criteria online and can arrange virtual tours if you are not ready to come down to the US yet. 

Your realtor will also be able to answer your questions regarding schools, transportation, recreational activities, etc. In addition, your realtor will advise you as to what items will be staying with the properties you are being shown. For example, it is normal in the United States that the kitchen cabinets and appliances all stay with the house. Also, in the United States, you normally own the land along with the house. 

Step 6 – Make an offer on the property you like and finalize your dream home in the USA 

Once you have selected a property you would like to purchase; your realtor can give you information on similar properties recently sold in the area. Your real estate agent will advise what price offers you should make to the seller with this information. Since most property list prices are negotiable, you should rely on your specialized agent’s expertise in negotiating. 

Once you make the offer, the seller has three options. They can accept your offer, reject it or counteroffer with a different price. If they choose to accept your offer, congratulations, you’re now one step closer to becoming an American homeowner! 

Step 7 – Conduct a Home Inspection  

This is the most important and final step before you buy your new property. You can buy a house without doing an inspection, but it’s highly recommended that you hire a home inspector to make sure all of your bases are covered. The inspector will check for any defects in construction or damages and make sure the house is structurally sound, and all systems are working. 

Your expert real estate agent, can provide you with a list of home inspectors or arrange one on your behalf and navigate you through the process.  

Step 8 – Sign purchase contract with the seller 

After the home inspection, you will enter into a contract of sale with the seller. The contract of sale is the document that binds you to the transaction. The contract of sale will include the price and any other terms that your realtor negotiated for you. At the time of contract, you will need to provide your Earnest Money deposit between 5-10% of the sales price. This money sits in an escrow (trust) account until you close on the property. 

The contract of sale will also include a clause that says you can back out of the buy if your immigration status changes or an issue with financing surfaces.  

Step 9 – Complete a Title Report 

Once you are in the contract, the next step will be to have a Title Report completed. Your real estate agent will guide you with this. In the United States, a Title Report will show previous owners of the property and any current liens against the property. The Title Report is critical because it protects the purchaser. Any liens against the property would need to be satisfied by the seller before the purchaser takes ownership. You will take ownership without any liens.  

Step 10 – Obtain Home financing through a US Mortgage for foreign nationals 

Contrary to what you might think, you can obtain US mortgage financing without a US credit history as a foreign national. Some US lenders offer mortgages for new immigrants and non-resident buyers with no US credit history at a competitive rate. These lenders also specialize in foreign national mortgages for non-immigrant visa holders such as H1-B, L-1, etc.

With home financing options available to foreign nationals at competitive rates, new immigrants don’t have to wait for 2-3 years to build credit in the US before buying a house. Similarly, Non-resident buyers don’t have to pay all cash to purchase a house and can put that cash for better use and higher returning assets.

You can access our definitive guide on How to Obtain a U.S. Mortgage for Foreign Nationals with No or thin US Credit History for details on the US mortgage process.

If you are paying cash, you have nothing more to do until the Title Report is completed. 

How long does it take to buy a house in the US?

If you are paying with cash, you can anticipate taking ownership of the property in approximately 30 days from signing a contract of sale. If you are using financing and obtaining a mortgage, you can anticipate taking ownership in approximately 60 days from signing a contract of sale. If these time frames do not meet your needs, your real estate agent can negotiate different dates for you. 

US Mortgages with no US credit history

US Mortgages for Foreign Nationals & Expats

Get pre-qualified for a US Mortgage as a foreign national buyer without US credit history.

Step 11 – Take ownership of your new house in the USA 

On the day you will be taking ownership, there will be many documents to sign. First, the seller will sign a deed to transfer ownership to you. The Deed is a crucial document because it proves ownership. The seller places your name on the Deed, and the seller’s signature proves that they have transferred the property to you. Next, a Title Closer will notarize the document and record it in the local government office. This is for your protection.  

On the day you take ownership or the day of the closing, the seller will hand you the keys so that you may move in at any time. 

You can buy a house in the USA online from anywhere around the world – wherever there’s an internet connection! Let’s get started.  

Find the best real estate agent with international expertise

Connect with a local US real estate agent(s) with CIPS designation

Top 5 Foreign buyers of US real estate in 2021

Canada emerged as the number one country of origin for acquiring property among foreign buyers through April 2020-March 2021, accounting for 8% of all transactions. The second-largest country of origin for foreign buyers was Mexico, at 7%. The third-largest country of origin was China, the top country since 2015 but fell below 6%. India and the United Kingdom were in fourth and fifth place respectively, with each country around a 4% share.

The Covid-19 pandemic impacted the overall volume of international real estate transactions in the US and may have affected country-wise transaction volume as well.

Trend of dollar volume of existing home purchased by top 5 foreign buyers in Billion dollars
Source: National Association of Realtors (NAR)

The following provides key insights into historical trends in cross-border US real estate transactions by foreigners and some of the key insights that can help foreign nationals buy US property.

China

From 2010-2021, in the last 12 years, Chinese real estate buyers of US property have bought on average $18 billion per year worth of US real estate with an average of 27,000 units bought per year. This makes the Chinese (includes buyers from the People’s Republic of China, Hong Kong, and Taiwan) the largest group of foreign real estate investors in the US.

Top 5 US destinations for foreign buyers from China in 2021:

  1. California (34%)
  2. Georgia (10%)
  3. New York (8%)
  4. Michigan (8%)
  5. Tennessee (5%)

In 2021 (Apr’20-Mar’21), Chinese buyers’ median and the average purchase price were $476,500 and $710,400, respectively.

Most Chinese buyers purchased a property in the US for use as a primary residence (40%), followed by vacation use, rental property, or both (33%) and student use (6%).

Distribution of intended property use by Chinese property buyers in USA
Source: National Association of Realtors (NAR)

59% of Chinese buy Detached Single-family, followed by Townhouse and Condominium at 20% and 18% respectively.

India

From 2010-2021, in the last 12 years, Indian real estate buyers of US property have bought on average $6 billion per year worth of US real estate with an average of 12,500 units bought per year. The majority of US property buyers from India are US resident buyers (~90%).

Top 5 US destinations for foreign buyers from India in 2021:

  1. California (40%)
  2. Texas (11%)
  3. Florida (6%)
  4. Missouri (6%)
  5. Maryland (6%)

In 2021 (Apr’20-Mar’21), the median and average purchase price for Indian buyers was $538,900 and $662,600, respectively. This is almost 2x of the typical home value in America in 2021 (as per the Zillow home value index).

79% of buyers from India purchased a property in the US as a primary residence, followed by rental property and student use at 13% and 7%, respectively.

Distribution of intended property use by Indian property buyers in USA
Source: National Association of Realtors (NAR)

75% of Indians buy Detached Single-family, followed by Townhouse and Residential Land at 12% and 7%, respectively.

Canada

Canadians are the largest buyers of US real estate in terms of the number of units. From 2010-2021, in the last 12 years, Canadian real estate buyers of US property have bought on average 35,000 units of US real estate per year worth on average $12 Billion per year. The majority of US property buyers from Canada are US non-resident buyers (~75%).

Refer to our blog – The ultimate guide for a Canadian buying house in USA for in-depth analysis and know-how for Canadians buying property in the US.

Mexico

From 2010-2021, Mexican real estate buyers of US property have bought on average $5 billion per year worth of US real estate with an average of 18,000 units bought per year.

Top 5 US destinations for foreign buyers from Mexico in 2021:

  1. Texas (29%)
  2. California (21%)
  3. Colorado (15%)
  4. Arizona (7%)
  5. North Carolina (5%)

In 2021 (Apr’20-Mar’21), Mexican buyers’ median and the average purchase price were $341,400 and $407,500, respectively.

42% of buyers from Mexico purchased a property in the US for use as a primary residence while 45% for vacation use, rental property, or both.

Distribution of intended property use by Mexican property buyers in USA
Source: National Association of Realtors (NAR)

78% of Mexicans buy Detached Single-family, followed by Condominium and Residential Land at 7% and 6%, respectively.

United Kingdom (UK)

From 2010-2021, in the last 12 years, UK real estate buyers of US property have bought on average $6 billion per year worth of US real estate with an average of 10,500 units bought per year.

Top 5 US destinations for foreign buyers from UK in 2021:

  1. Florida (44%)
  2. Virginia (21%)
  3. New Jersey (12%)
  4. Texas (7%)
  5. Georgia (6%)

In 2021 (Apr’20-Mar’21), the median and average purchase price for buyers from the UK was $366,600 and $718,800, respectively.

52% of buyers from the UK purchased their US property for vacation use, rental property, or both. 38% purchased for a primary residence, while 9% purchased their US property for student use.

Source: National Association of Realtors (NAR)

61% of buyers from the UK prefer Detached Single-family, followed by Townhouse and Condominium at 24% and 15% respectively.

Frequently Asked Questions (FAQs)

Can foreigners buy a house in the US?

Non-US citizens, both US residents or non-resident, can buy and own a house or property in the US. Foreign nationals have the same rights to buy and own property in the U.S. as US citizens do. In 2020, foreign nationals bought $74 billion worth of US real estate (existing-home purchases), $41 billion of which was purchased by resident foreign nationals and $33 billion by Non-resident buyers. (Source: National Association of Realtors)

How much does it cost to buy a house in the US?

Per the National Association of Realtors (NAR), in 2020, the median sales price of Existing Single-Family Homes for US Metropolitan Areas was $300,200. This is a 9.3% increase from the median sales price of $274,600 in 2019.

Are house prices cheap in the USA?

Home prices in many US metro areas are comparatively low compared to prices in the central area of global cities. For example, even in a relatively costlier US city like San Francisco, per square meter of residential real estate costs $5,890 compared to $26,262 in London (UK), $28,570 in Hong Kong (China), $10,947 in Toronto (Canada), $10,932 in Mumbai (India), etc. (Source: National Association of Realtors)

How can a foreigner buy investment property in the US?

Find a real estate agent with international and foreign real estate transaction expertise once you understand how much you can afford and where you want to buy.

Refer to the step-by-step process on how to buy a house in the USA in this article.

Can I get a mortgage in the USA as a foreigner?

Yes. Non-US citizens, both US residents on non-immigrant visas or non-resident foreign nationals, can obtain a US mortgage with or without a US credit history.

Refer to this detailed step-by-step guide on how foreign nationals can obtain a US mortgage with a thin or no US credit history.

Do I have to travel to the US for the closing if I am a non-resident buyer?

No, it’s not mandatory. However, if you choose not to or cannot attend your closing, you’ll need a Power of Attorney. This important document allows another person to represent and sign on behalf of the buyer at the closing.

What to expect during your closing? Read this article to learn all you need to know and expect at the closing of your dream house in the US!

What costs are due at closing in the US?

In addition to the downpayment, most buyers are also responsible for other miscellaneous costs such as loan origination fees, appraisal fees, title search and insurance, legal recording fees, etc.

Can I get a green card or residency if I buy a property in the USA?

No, you can’t get a green card or any immigration benefits by buying a house in the US. However, there are no restrictions for non-resident buyers to purchase a property anywhere in the US.

Are foreign investors required to pay property tax in the US?

Yes, foreign investors who buy US property must pay property tax on their foreign investment, similar to a US citizen.