How to buy US real estate from abroad

How to contact a real estate company when purchasing U.S. real estate

Even if you are interested in American real estate, the current situation is that there is little information about how and where to find US properties in Japan
Now, let's explain the specific flow of how to proceed.

Create a U.S. account

It is not necessary to open an account in the U.S., but it makes things easier and is smoother to make it in advance.
When you remit your rental income, you do not need to consider the risk of exchange, and you can proceed smoothly.
When purchasing real estate from abroad (outside the US), there are fewer escrows to accept overseas remittances, and in many cases you will have to open an account in the U.S. in the end.
If you have an account at Mitsubishi UFJ, you can open an account from the Internet at Union Bank.
In addition, in order to open an account in the United States, a social security number SSN (Social Security Number) is required.
An SSN can be obtained by having US nationality, having a working license in the United States, or by having permanent residence in the United States.
However, if you want to buy a U.S. property while in Japan, there will not be many people who have acquired U.S. nationality or permanent residency.
Therefore, you need to obtain a personal taxpayer number called an ITIN (Individual Tax Identification Number).
To obtain ITIN, you need a passport, a final return form, etc.
It will take about one month to acquire the certification, so it would be better to prepare in advance.

Contact a real estate company

When purchasing U.S. real estate, you first need to look for a reliable real estate company.
When looking for property in an unfamiliar place, we need an agent who is familiar with the local area and has a lot of information.
Incidentally, brokerage commissions are borne by the seller in U.S. real estate, since transactions in which commissions are received from both the seller and the buyer are prohibited.
If you are seriously considering buying US real estate, contact a reputable real estate company

Pre-approve the loan

If you are pre-approved for a loan before looking for properties, the procedure after finding the property will be smoother.
Pre-approval of loans refers to the maximum amount one can borrow from a financial institution.
The real estate agent will also support the issuance of loan pre-approval, so please consult with them before looking for a property.

Property search

When looking for real estate in the United States, it is common to use a real estate information system called MLS, such as REINS in Japan.
However, MLS cannot be viewed in Japan.
This is why real estate agents are needed.
In addition, the asset value of U.S. real estate tends to be the opposite of Japanese real estate.
For example, while real estate in Japan increases in value if it is closer to a station, proximity to a station in the United States does not affect asset value.
In the United States, proximity to a station is not popular, because low-income people mainly use public transportation.
In addition, the value of Japanese real estate assets declines as buildings deteriorate over time, but in the United States, the value of buildings is unlikely to decline if it is firmly maintained.
Another big difference between the US and Japan is that in the U.S. real estate market, previously owned (or used) properties are the norm.
In this way, asset values differ between real estate in Japan and real estate in the United States, so caution is required.

How to make an offer when purchasing U.S. real estate

Once the property is determined, it is time to put in an offer to the seller.
In Japan, it is common to refer to it as putting in an "application" but in the US, it is called "putting in an offer".
Since the turnover of transactions is rapid in U.S. real estate, it is imperative to make an early decision.
Your offer must contain detailed descriptions of the purchase amount, the handover date, whether you will use a mortgage, and other conditions.
Based on these condition, your realtor will negotiate with the agent on the seller's side, but if there are many offers, it may not be possible to negotiate.
Therefore, it is important to ask an experienced real estate agent who can make negotiate your offer deftly.
In addition, in some cases, the seller's agent may negotiate the terms and conditions that the seller stipulates.
Therefore, it is best to ask a real estate agent who is familiar with local information.
The above-mentioned negotiations are called "counter offers", and the exchange may continue many times until the conditions are met.
Once the terms are finalized, a third party in the purchase and sale of escrow opens and the transaction begins.
It is the job of an escrow agent to create a sales agreement.
The contract is signed by the seller, buyer, and each agent.
Within three business days of the escrow opening, a remittance of a deposit with a buying and selling price of 3% is required.
In addition, ask a Home Inspector to investigate the property to be purchased.
It is necessary to collect detailed information from the seller, like whether there are any debts secured by the land owners, or the land itself.
Based on the report of the property inspection, negotiations can be made with the seller if there are any repairs or renovations needed.
In this case, if both parties are unable to agree with each other and cannot agree, it is possible to cancel the sales contract.
If there is a serious problem as a result of the inspection of the property, the deposit will also be fully refunded.
However, it should be noted that cancellation of the contract for unilateral reasons by the buyer may not result in the return of the deposit.
If there is mutual consent, both buyer and seller can proceed with the contract.