Buying Property in the U.S.A.

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Guide to USA (East Coast)

The USA East Coast stretches from the Canadian border and is home to some of the USA's most famous cities, such as, Washington DC, Boston, New York City, Philadelphia, Florida and Miami. It is a diverse part of the USA with a mixture of history, culture, climate and natural beauty. From New York, one of the greatest cities in the world to the ‘sunshine state’ of Florida, there is something here for everyone.

California
California is located on the western coast of the United States. California has some of the most spectacular geological features in America and they extend north to south along nearly the entire length of the state. They create a wide variety of scenery and climates that help to make California a great place to visit and live.

Florida
Florida, the "Sunshine State", is located on the southern extreme of the eastern coast of the United States. The fabulous sandy beaches and the warm waters of the Atlantic Ocean and the Gulf of Mexico are the second most popular attraction. Golf, tennis, sports fishing and other outdoor activities are also very popular.

Illinois
Illinois has everything, foremost is the city of Chicago with its fantastic museums and cultural scene. Chicago is known to be the third great metropolis in the USA. The city is situated on the shores of Lake Michigan which is one of the five great inland seas known as the Great Lakes. In the west of Illinois, lies the Great Plains. Vast expanses of flat lands extend nearly a thousand miles to the feet of the Rocky Mountains.

Maine
Maine has many lakes of beauty and rivers surrounded by dense forest. A rugged rocky coast adds to the scenic beauty and the cool climate attracts many during the summer months. On the hillsides, colorful wild flowers of spring and the bright sunlight of summer, to the brilliant palette of fall and the stunning white snowscapes of winter, make Maine a place of wondrous beauty. Maine is also home to some incredible recreational pursuits.

Massachusetts
Massachusetts is well known for many of its historical sites as well as varied regional flavors. The state is a blend of rural and urban living, from Boston and suburbs in the East, to the Pioneer Valley and the Berkshires in the West. To the south of Boston is Cape Cod, an arm shaped peninsula with a stunning beachfront, and to the West of Boston you'll find the Blackstone Valley National Corridor, a vast expanse of rolling hills and small towns, as well as some of the most unique vineyards in the East Coast.

New Hampshire
New Hampshire has much natural beauty, including The White Mountains which have the tallest mountain in the northeastern U.S. It is known as Mount Washington. The Piscataqua River and its several tributaries form the state's only significant ocean port where they flow into the Atlantic. New Hampshire residents are proud of the nature around them, so careless actions that damage the local environment are not appreciated.

New Jersey
New Jersey is not all urban sprawl; you can also find large areas of farmland, parks, and other unspoiled wild areas. New Jersey is densely populated with a diverse population and rich culture. New Jersey has many scenic sites, including the majestic Palisades, opposite New York City on the western banks of the Hudson River.

New York
New York also referred to as "the Big Apple" easily one of the world's greatest cities, and is a major center for media, culture, food, fashion, art, research, finance and trade. New York City consists of five boroughs, which are actually five separate counties, Manhattan, Brooklyn, Queens, The Bronx and Staten Island.

South Carolina
South Carolina is very hot in the summer, and its nice coastal areas are a big attraction. The most well known area is called The Grand Strand and comprises 60 miles of mostly beachfront property. The Strand runs south from the North and South Carolina border through the town of Little River which is known for its beautiful inlet.

Virginia
The capital of Virginia is Richmond. In Richmond there is a huge art movement and there are several attractions for those interested in many forms of art, from galleries to venues for performing artists.

Washington D.C.
Washington, D.C., is the capital city of the USA. "D.C." is an abbreviation for the District of Columbia. Washington is home to numerous national landmarks and is one of the most popular Cities in the United States. The world famous Smithsonian Institution is located in the District. Washington is a major national center for the arts, with many venues for the performing arts in the city.

Practical Information for Buying Property Abroad

Top 10 Tips

1. To keep from spending phenomenal amounts on insurance and property, try to live a little further inland rather than right at the beach. It's always easier to rent a beach house for a week or two, than to pour money into a beach property year-round.
2. If you are only seeking a holiday home, ensure maintenance levels are low.
3. If buying a property to rent out when you are not using it, yields will be low if it is not in much desired tourist zones.
4. Property laws and taxes vary from State to State.
5. Check that the real estate agent is licensed in the State.
6. Commissions with the agents are negotiable but generally, you are looking at 5 to 7%.
7. Homeowner associations can determine if you are allowed to buy.
8. The US dollar is weak against the Euro at the moment so you’ll get a good exchange rate.
9. Failure to meet deadlines can see you lose your deposit.
10.The US property market is in slowdown at the moment.

The American Property Market

The US property market has experienced significant slowdown in the last three years and house prices have fallen in many parts. The average price for a US home is in the order of €170,000. It should be noted that because the US is so vast that depending on where you buy, you might find a bargain or reckon that things are much overpriced. Property in the major cities or in tourist areas such as the Florida coasts will naturally be much more expensive than in the rural Midwest.

Part of the problem has been that US consumers are relying on the housing market to fund debt-fuelled spending. Many commentators are predicting a serious burst in the bubble.

Before buying in the United States, determine your budget and if you are obtaining a mortgage from an Irish financial institution, make yourself aware of the sum available to you and any terms and conditions applying. When working out how to finance your purchase, consider all the options. Paying cash, if you can afford to, is often recommended.

The other options are re-mortgaging your own home or arranging a mortgage on your new property. Re-mortgaging offers the easiest solution; releasing equity in an Irish home means that the second home can be purchased for cash, without the need for another mortgage. However, this may only be feasible for those who own their first home outright.

If you decide to obtain finance in the US, bear in mind that most mortgages available to foreign nationals require a minimum 20 per cent down payment. Some even stipulate 30 or 35 per cent.

At the beginning of the process, make sure you obtain what is known as a Good Faith Estimate. This is a standardised document used to detail all the costs of obtaining your mortgage, including both monthly and one-off payments.

The Legal Issues

Costs

To cover legal, title insurer and other fees, title insurance premia, transfer taxes, property taxes and mortgage fees (if applicable), you should allow around five per cent of the purchase price (depending on the State). In addition, a commission of 5 to 7% for an agent may be payable.

The Purchase

Property purchase in the United States is quite straightforward. In virtually all parts of the United States, there are local Multiple Listing Services that are used by all of the real estate agents to share information. The agents or brokers basically act as mediators for the buyer or the seller. Where real estate brokers assist sellers, they market their property and sell it for the highest possible price under the best terms. When acting as a buyer’s agent with a signed agreement (or, in many cases, verbal agreement), they assist by helping them purchase property for the lowest possible price under the best terms. Without a signed agreement, brokers may assist buyers in the acquisition of property but still represent the seller and the seller's interests.

In most jurisdictions in the US, a person is required to have a license in order to be paid for services rendered as a real estate broker. Unlicensed activity is illegal, but buyers and sellers acting as principals in the sale or purchase of real estate are not required to be licensed. In some states, lawyers are allowed to handle real estate sales for compensation without being licensed as brokers or agents.

Several types of listing contracts exist between broker and seller. These may be defined as:

Exclusive Right to Sell

In this type of agreement, the broker is given the exclusive right to market the property and represents the seller exclusively. However, the brokerage also offers to co-operate with other brokers and agrees to allow them to show the property to prospective buyers and offers a share of the total real estate commission.

Exclusive Agency

An alternative form, "Exclusive Agency", allows only the broker the right to sell the property, and no offer of compensation is ever made to another broker. In that case, the property will never be entered into an MLS. Naturally, that limits the exposure of the property to only one agency.

Open Listing

This is an Agreement whereby the property is available for sale by any real estate professional that can advertise, show, or negotiate the sale. Whoever first brings an acceptable offer would receive compensation. Real estate companies will typically require that a written agreement for an open listing be signed by the seller to ensure the payment of a commission if a sale should take place.

Commissions with the agents are negotiable but generally, you are looking at 5 to 7%.

Once a price is agreed, the purchaser pays a small goodwill deposit before making a formal offer in the form of a purchase contract. When signed, this is binding, though contingency clauses allow either side to withdraw in defined circumstances.

Generally, a 10 per cent deposit is then paid into a holding account. A title insurance company scrutinises the public records and insures the property against any third party claims. Completion, including the transfer of the balance of the purchase price into the holding account, can then take place. Time is a crucial element of the US home-buying system. If you fail to observe dates stipulated in the contract, you risk losing your deposit.

The conveyancing process in the United States varies from state to state depending on local legal requirements and historical practice. In most situations, three attorneys will be involved in the process: one each to represent the buyer, seller, and mortgage holder; frequently all three will sit around a table with the buyer and seller and literally "pass papers" to effect the transaction.

Homeowner Associations

Many apartment blocks and housing communities have a condo board or homeowner association. If it is possible to talk to a few of the residents before purchasing a property in one of these structured developments, then do so. Try to get a feel for how the governing board conducts itself. Always read all the fine print on the homeowner association agreement, so you know what your responsibilities might be. Homeowner associations exist to protect your property value by enforcing the rules. They may also have a say as to whether or not you will be permitted to buy the property.