More and more real estate transactions have an international party associated with the deal. Buyers seek real estate as investments around the world, especially here in the United States within urban centers such as Boston, Cambridge, and Somerville.
There are many reasons for interest by international buyers in cities, and it’s worth noting that the transactions are slightly different for international clients than domestic ones. Take the time to understand how an international investor buys property in Boston.
Establish Property Use
International investors buy property for a variety of reasons. Make sure the real estate agent has a good understanding of why the buyer wants a property in Boston. Some buyers purchase property in college towns and neighborhoods where their children will go to school as a way of avoiding payments to universities for housing and instead purchasing appreciating assets that can be rented after graduation or sold for profits.
Others seek vacation homes or want to take advantage of lower market prices for homes in which they intend to retire.
Then there are those merely seeking international investments to fill gaps in their portfolios.
Regardless of why an international buyer is purchasing property, the buyer does not receive any type of U.S. citizenship status for owning the property. It is important that the purchaser consults with his own tax and legal team to understand the ramifications of buying property in Boston.
Consider Currency Rates
Many international buyers may be in a rush one day, and suddenly be stalling the next.
One reason could be fluctuations in currency rates, which are wildly volatile these days.
International buyers will be greatly affected by currency fluctuations, potentially to the tune of tens of thousands of dollars depending on the price of the property. At NextHome Titletown Real Estate, we will work diligently with you to complete the deal in a timely fashion.
Be Prepared for English Language Signing
Real estate transactions in the United States are able to translate many inspection reports and disclosures to other languages. However, the final closing documents will be in English. If this is an issue, make sure to have a translator available to answer any questions if your English is not that strong.
Many international clients move quickly and with cash offers. However, not everyone has this luxury. Expect the lending standards to be more stringent for international buyers.
Lenders may require a minimum of $100,000 in cash assets in a local bank or the bank where the loan is originating from. There may also be limits to the amount an international buyer can finance from a U.S. bank. This may be $1 or $2 million dollars. Establish credit in the U.S. prior to applying for a loan. Consider a bank that has international offices that may be able to better serve financing needs.
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