The Buying Process For USA Investment Property
So you've found the perfect property, now what happens?
Purchase Agreement
First you need to secure it, to stop anyone else buying it. To do this you will have to
pay an earnest deposit, typically $500-$1000. This shows your commitment to the seller and you will then receive the Purchase Agreement (shown
opposite). This shows your details, the property information, the price agreed, the earnest deposit, the method of payment, the closing date and
other information. If you are buying your property through your LLC, make sure the LLC name is shown and not your name. Also make sure when you
sign anything on behalf of your company, to sign Your Name (Member).
Financing
Your next priority will be to arrange financing, if required. This can be the make-or-break when buying and can take a while to arrange.
You may consider putting a condition in the Purchase Agreement stating it is contingent upon financing being approved, otherwise you risk losing
your earnest deposit, should financing not be possible.
Property Inspection
The next stage is to get the property inspection done. See Getting a Property Inspection. This will highlight
any areas of concern and may allow you to re-negotiate on the purchase price, if repairs are needed.
HUD
Assuming you are still happy to proceed, you will receive a HUD from the title company. See The HUD. This will show
clearly a complete financial breakdown of your purchase, with the total figure you have to pay. You will need to send the title company a check
for this amount, so that they receive it before closing.
Closing
You will need to get the closing documents (including loan documentation if applicable) notarised by a US notary. If you are outside the US,
your local US Embassy should offer this facility for a reasonable cost. Some local solicitors/attorneys offer this service also. The closing
documents will then need to be mailed back to the title company, in time for closing.
I have found title companies under estimate how long it takes you to receive and send back the closing documents. Get them to e-mail you all
the documentation, then you can print it out and get it back to them as quickly as possible. They can only accept original documents for
closing, so faxing or e-mailing them back is not an option. I suggest you use FedEx or UPS on an express service if possible.
Assuming everything is in order for the closing, the title company will register you or your company as the new property owner with the county
and you are now the proud owner of your investment property.
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Please Note - The information contained in this section is only my opinion and should not be regarded as legal or tax advice