Can foreigners buy property in the USA? [2024] 

Foreigners can buy property in the USA without restrictions, regardless of nationality or immigration status.

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Foreigners bought $53.3B worth of residential real estate in the US between April 2022 and March 2023, and you can do it too.

It’s completely normal to have numerous questions and feel somewhat daunted by the process. Interestingly, home-buying process in the USA is quite similar for both foreign nationals and US citizens.  

Whether you’re relocating to the USA on an H1B or L1 visa or you’re a foreign real estate investor, purchasing property in the USA is both easy and possible. 

With over 14 years of experience in the real estate industry, I have helped many foreign nationals through the home-buying journey in the United States. 

My goal with this guide is to simplify the process of purchasing property in the USA for you as a foreign national, answering common questions and providing clear guidance based on my extensive experience. 

Let’s start with the most common concern. 

Key Takeaways:

⁕ Foreign nationals can get US mortgages with no US credit history to buy their property in the USA.

⁕ There are no additional taxes or restrictions on foreign buyers of US Real Estate.  

⁕ Purchasing US real estate does not grant immigration status or the right to live in the USA. An immigration visa is required to enter the USA. 

⁕ H1B, L1, or F1 visa holders worried about returning to their home country can continue to own US property remotely without any restrictions.

Can a foreigner buy property in the USA? 

Yes, of course. Foreign nationals can purchase property in the USA with no restrictions and have the same homeownership rights as US citizens.  

You don’t need to be a US citizen to buy property in the USA, and you are free to buy residential or commercial property of your choice. In fact, foreigners have purchased $53.3 billion worth of residential real estate between April 2022 and March 2023. (Source: National Association of Realtors)

51% of these buyers consist of those staying in the USA for less than two years or US newcomers on non-immigrant visas such as an H1B or L1 visa. The remaining 49% constitutes non-resident foreign buyers or foreign real estate investors.   

Here is an overview of foreign residential real estate transaction in the US.

Now that you know buying a property in the US as a foreign national is achievable, let’s explore the procedure in detail.

How can foreigners buy property in the USA? 

Here’s a step-by-step process on how to buy a property in the United States as a foreign national: 

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

To kickstart your house-hunting journey in the USA, the first step is deciding where you want to buy.

When looking to buy a new home as a primary residence, it’s important to take into account various factors such as proximity to your workplace, schools, and other amenities. Spend time exploring different neighborhoods and researching the local real estate market to find an area that fits your budget and lifestyle.

Additionally, it’s crucial to understand the commute, school districts, and community vibe of the prospective area. Your real estate agent can provide valuable knowledge of the local market to help you make an informed decision. 

For foreign investors, strategic location is key. Conduct thorough market research to identify areas with growth potential, job opportunities, and stable economies that align with your financial goals.

Step 2 – Find a real estate agent experienced in international real estate transactions 

Navigating the US real estate market as an expat or investor can be complex. Professional guidance is crucial to avoid costly mistakes, especially given the unique challenges foreign nationals face.

Not all agents are equipped to handle these complexities, but HomeAbroad specializes in assisting international buyers.

Our agents have experience, expertise, and CIPS (Certified International Property Specialist) designation, ensuring a seamless and informed homebuying experience for foreign clients. From understanding visa implications to finding properties that meet your unique requirements, our agents are dedicated to making your US property purchase journey smooth and successful.

Here is what our agents can do for you:

If you want a real estate agent with international expertise, reach out to us.

Step 3 – Working with the real estate agent in the USA   

When you engage with a real estate agent knowledgeable about international transactions, they may propose a buyer representation agreement. This mutual contract defines the relationship between you and the agent, setting out respective duties and responsibilities, as well as the duration of the agreement. Carefully review and understand this document before signing to ensure you’re aware of all terms and conditions. 

This is not mandatory, and some real estate agents may not require a buyer representation agreement.

Step 4 – Explore US mortgage options for foreigners

Most of the foreign real estate buyers I’ve come across were initially unaware that they could even qualify for a US mortgage, especially due to a lack of US credit history. 

On the contrary, the US property market is inclusive and offers various real estate financing options for foreign nationals – expats with established credit, US newcomers, and foreign real estate investors.

Expats with a good US credit history can even get mortgages available to US citizens.

For US newcomers and foreign investors with thin or no credit history, there are special mortgage programs available called “foreign national mortgages.”

These specialized mortgage programs allow foreign national to qualify for a mortgage without US credit history. We have provided a detailed explanation of these loan programs in our guide titled “Foreign National Mortgage“.

If you want a foreign national mortgage, HomeAbroad offers these loans to help expats, newcomers, and non-resident investors buy a primary residence or investment property in the USA.

Submit your details below to get a quote.

Step 5 – Search for the right property

Begin the property search by sharing your preferences with our specialized real estate agent for foreign nationals. They will curate a list of properties that match your criteria.

If you are in the US, your agent will facilitate property tours during open houses. For foreign real estate investors who are not in the country, our agents can provide a virtual tour experience through photos and videos, enabling you to make informed decisions from the comfort of your couch.

Feel free to ask questions about the property and buying process.

Step 6 – Make an offer on your chosen property 

After finding and finalizing the property you want, your HomeAbroad agent will perform a comparative market analysis of recently sold properties in your desired area to determine a reasonable price for it. This is important to make a competitive, realistic offer that aligns with market trends. 

When you make an offer to the seller, they can accept, reject, or counteroffer.

If the seller accepts the offer, you’ll proceed with due diligence and finalizing the closing details. Your agent will guide you through these steps, ensuring you’re well-informed and ready to proceed. 

Step 7 – Sign the purchase contract 

After your offer is accepted, you’ll formalize the agreement by signing a contract of sale with the seller. This legal document contains the agreed-upon price and terms, such as the closing date and any contingencies that your agent has negotiated on your behalf. 

You’ll also need to make an earnest money deposit, about 1%-3% of the home’s purchase price. The funds are held in an escrow account managed by a neutral third party until the transaction is complete.

If you withdraw from the agreement for a reason not specified in the negotiated contingencies, this deposit is forfeited.

In case of mortgage, contact your loan officer and provide them with your signed purchase contract to start the mortgage process. 

Step 8 – Get the title report done 

Before you finalize your property purchase, a title report is an essential step to ensure you’re making a secure investment. A title company or attorney reports the property’s history, detailing past ownership, legal claims, and any potential encumbrances that could affect your rights as a future owner. 

The significance of the title report cannot be overstated—it is your shield against future legal complications. It ensures that the seller resolves any financial claims, like unpaid property taxes or creditors’ liens before you proceed to close.

Your agent can help you connect with a title agent or company to complete the title report.

Step 9 – Arrange a thorough home inspection and due diligence 

After verifying the legal aspect, it’s time for a home inspection to review the physical condition of the property. This is optional, but opting out of a home inspection could lead to unforeseen complications, especially in older homes where issues are not always visible.

A home inspection can uncover structural problems, electrical issues, plumbing malfunctions, and more, which are vital to identify before finalizing your investment. 

Home inspection also serves as a negotiation tool. If the inspector identifies any defects, it’s a standard practice to either request the seller to make repairs or to negotiate a price adjustment to cover the potential repair cost.

Additionally, your can back out of the agreement without losing the earnest money deposit in case the property is not up to standard or the seller is unwilling to negotiate.

Step 10 – Finalize your home purchase in the USA 

After inspection, there will be a final walk-through to make sure everything is to your satisfaction, and you can close on your property. Before closing, if you’re financing your property, check with your lender to ensure your mortgage has been approved.

If you have the approval, your loan officer will share a closing disclosure before 3 days of closing for you to review. This document has your loan’s terms, closing costs, and ongoing mortgage payment details. 

On closing day, you will meet the necessary parties with identification, proof of funds, and the closing disclosure. You will then sign the deed, which is the document that transfers property ownership to you. After your signature, the closing agent will notarize and record the deed at the local government office, finalizing the legal transfer. 

For the final downpayment and closing cost settlement, follow the instructions of your closing company to ensure a smooth transition. 

Consider the closing day checklist below to ensure you are well-prepared for your big day.

If you’re an investor looking to purchase property from your home country, follow these steps:

Closing process for non-resident foreign buyers who are not in the US.

There are established methods to ensure the process can be completed from abroad. These buyers can engage in the closing process via the following means: 

Embassy or Consulate Services: Many countries’ embassies and consulates in the buyer’s home country offer notary services that are recognized in the United States. Buyers can sign documents in the presence of a consular officer. 

Apostille Certification: For countries that are members of the Hague Apostille Convention, documents such as a power of attorney can be certified with an apostille. This certifies the authenticity of the document for international use. 

Power of Attorney (POA): Buyers can grant a power of attorney to a trusted individual who is in the US, such as their real estate agent or an attorney, to sign documents on their behalf. It’s essential to ensure that the POA is drafted according to the laws of the state where the property is being purchased and is properly notarized and, if necessary, apostilled.

These remote closing methods require careful preparation and compliance with specific legal requirements. Foreign real estate buyers are advised to coordinate the necessary steps closely with their real estate agent, mortgage lender, and legal counsel.

Congratulations on becoming a homeowner in the United States! 

You must have noticed that HomeAbroad agents make everything a lot easier at every stage of the process. Let us connect you with one of these agents through our wide network. We can help you connect with an agent in your desired area who will guide you through the process of buying the perfect property. 

Ready to buy your US home? Here’s what documents you’ll need.

What are the necessary documents for a foreigner to purchase a property in the US?

When purchasing property in cash, it’s essential to provide proof identity and funds to show you have the necessary liquid assets to cover the purchase price and any associated tax obligations. 

On the other hand, if you opt for financing, the required documentation will vary based on your chosen loan program. This often includes demonstrating your ability to repay the loan. 

For a detailed breakdown of the documents needed to secure a mortgage without a US credit history, refer to this foreign national mortgage guide. 

Next, let’s understand the tax implications of buying a house in the US as a foreign national.

What are the tax implications for foreigners buying property in the USA?

Foreign nationals are subjected to the same tax implications as US citizens. They need to pay taxes based on their intended use of the property.

For All Foreign National Property Buyers: 

• Property Tax: Regardless of the intended use, all property owners in the USA must pay property tax, including foreign nationals. As a foreign national, your property tax rates will be the same as those for US citizens. This is the only tax a home buyer needs to pay.

For Investment Property Owners: 

• Income Tax: Income generated from property, such as rental earnings, is taxed at the same rate as for US citizens. 

• Capital Gains: No taxes are levied on the property’s appreciation until it is sold. However, specifics apply when you sell.

FIRPTA (Foreign Investment in Real Property Tax Act)
Under FIRTPA (Foreign Investment in Real Property Tax Act), when a non-resident foreigner sells US real estate, a portion of the sale proceeds (usually 10%-15%) must be withheld by the buyer at closing and remitted to the IRS. This isn’t an additional tax but a prepayment towards any potential capital gains tax liability. Foreign buyers will be entitled to a refund based on the actual capital gain tax rate (same as US citizens) when they file their tax returns.  

Exemption: Foreign nationals with a legal US residency, such as H1B visa holders, are not subject to FIRTPA withholding. 

Armed with this knowledge, you’re ready to take the next steps in purchasing your property as a foreign national. Contact us to get started.

Frequently Asked Questions (FAQs)