More and more real estate transactions have an international party associated with the deal. Buyers seek real estate as investments around the world. Los Angeles is no different. There are many reasons for interest by international buyers in cities like this. The transaction is slightly different for international clients than domestic ones. Take the time to understand how an international investor buys property in Los Angeles.
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 Los Angeles. Some buyers get property in college towns where their children will go to school. Others seek vacation homes or want to take advantage of lower market prices for a home they intend to retire in. Then there are those merely seeking international investments to fill a gap in their portfolio.
Regardless of why an international buyer is purchasing property, the buyer does not get any type of citizenship status for owning the property. It is important that the purchaser consults with is own tax and legal team to understand the ramifications of buying property in Los Angeles.
Consider Currency Rates
Many international buyers may be in a rush one day and be stalling the next. One reason could be fluctuations in currency rates. 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. Find an agent aware of this and work to diligently complete the deal in a timely fashion.
Find a Realtor with the CIPS Designation
The CIPS designation is a United State real estate agent recognized by the National Association of Realtors to have completed a course to specifically understand the nuances of international real estate transactions. CIPS stands for Certified International Property Specialist. Not only does this person work with international clients but he is part of an international network to build referral business and joint ventures on international deals.
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.