How to Buy

How to buy property in the United States:

PROPERTY PURCHASE BY BRAZILIAN CITIZENS

There are no legal restrictions in the United States for the purchase of property by foreigners, either to live in or as an investment. Incidentally, some American banks and financial organizations are specialized in dealing with Brazilian clients, due to the high number of business transactions made between both countries. After the real estate depreciation that has taken place since 2008, foreign citizens have largely contributed to the economic development of the realty industry. And the acquisition of property by foreigners as a type of investment shows a large growth in numbers, but there are also those who buy properties to move in with their families, due to the outstanding quality of life the country has to offer:

Different types of property are available for purchase, such as:

  • Homes (single family home);
  • Townhouse: specific type of row houses where 6 units are attached to each other;
  • Duplex: 2 townhouses;
  • Condo or apartment;
  • Land;
  • Commercial space;
  • Industrial spaces

Listed below are the essential steps you need to take in order to purchase property of any kind in the United States:

FOR BUYERS IN THE US:

1. Step: Opening a bank account

In order to open a bank account in the United States, the only required documents are a copy of your passport (pages 1 and 2), proof of residence in Brazil (3 months old) and a minimum deposit of $100.00 (one hundred dollars).

2. Step: Establish the intended use of the property
– property for vacation rentals
– holiday home for family and friends
– property for long-term rental
– commercial property

3.  Step: Establish the payment method – in full or financed
In case the full amount is paid at once, the money referring to the purchase has to be previously deposited in a US bank account to facilitate further negotiation. In many cash transactions, the seller will ask the buyer for proof of available funds to proceed with the sale. In case the buyer chooses to finance the purchase, a pre-approval letter issued by the bank will have to be sent along with any offer they make. The referring letter means that the buyer’s documentation has been completely assessed and approved. Therefore, regarding financed acquisitions, the sooner the documents are sent for analysis and approval by the financing bank, the better and more practical the property purchase turns out to be.
*** details on financing below

4.  Step: Property Search
The time spent searching for the desired property varies according to its purpose and the buyer’s profile. However, prospective buyers usually visit an average of 3-5 properties in one day, which are pre-selected by them.

5.  Step: Making a Property Offer
After finding the desired property, we send the seller an offer. The amount of said offer will be based on the value of the last similar properties sold in the same area. After that, we wait for the seller to accept the offer or make a counter-offer. It is also possible that they might decline the offer or request to reassess the proposal, since there are already several other offers made by other brokers for the same property.

6.  Step: Accepting the Offer
Once the offer is accepted, the buyer is required to make an initial bona fide deposit. This deposit usually refers to an amount ranging between $1,000 to $10,000, which is placed in an account belonging to the title company responsible for the entire transaction. The Title Company will be in charge of all paperwork regarding the transfer of title, notarial deeds, real estate registry, etc.

7.  Step: Inspection
Prior to the completion of the purchase, a property inspection will be conducted by a specialized company hired by the buyer, and its employers will verify the property’s condition before purchase. The inspection focuses on details such as: infiltration, wall painting, air conditioning functioning, as well as all other appliances; swimming pool, heater, piping, etc. After the inspection is completed, the buyer will receive a detailed report with all that has been verified and the results found, followed by adequate recommendations. The price and duration of the inspection vary depending on the property size.

8.  Step: Closing
On the date set for closing, the money should be in the title company’s account, and all documents must be signed by both parties. Closing costs will vary between 2% to 5% of the property’s selling price and these costs will be split equally between buyer and seller or in a different manner, otherwise previously agreed. The closing procedures for properties paid in full can be completed in 15 days or less. For financed properties, closing takes at least 40 days.

Note: Purchase of Property Still in the Project Stage
When the chosen property is still in its project stage, price negotiation does not apply. The price offered is already the final property price. There’s no need for inspection, since it’s a new house and the construction company guarantees the condition of the appliances for a limited amount of time to be defined by the developer. At the day of closing, the property will be completely ready and its title already registered in your name.

*** All other procedures are repeated.

FOR LONG-DISTANCE BUYERS:

1. Step: Opening a bank account
The buyer will be required to open a bank account in order to close the purchase. If the buyer is unable to come to the United States to open a bank account, we can suggest banks that allow the creation of new accounts by customers who aren’t physically present.

2. Step: Define the property’s intended use
Property for vacation rentals. Property used as holiday accommodation for family and friends. Property for long-term lease. Commercial property

3. Step: Set the method of payment – in full or financed
For payments in full, it’s possible for a buyer to sign all closing documents without being in the United States. Everything is done via email. The documents are sent by email and must be printed, signed, scanned, and returned. No bureaucracy. In case of financing, the buyer necessarily has to be present on the day of closing to sign the documentation.
*** details on financing below
4. Step: Property Search
The time spent searching for the desired property varies according to its intended use and the buyer’s profile. However, when the buyer is not present, we visit the properties in order to detail their conditions, and then report to the buyer, so that they can feel reassured when closing the deal. For that, we take pictures, make videos and consult with management (in case of condos) and/or neighbors, if necessary. Automatic searches are sent to the buyer’s email – that way, we keep them updated regarding new properties coming into the market.

5. Step: Making a Property Offer
After finding the desired property, we send the seller an offer by email, with no hassle for the buyer. From any place in the world, they can sign it and send it back by email to complete the offer. The amount of said offer will be based on the value of the last similar properties sold in the same area. From that moment, we wait for the seller to accept the offer, or make a counter-offer. It is also possible that they might decline the offer or request to reassess the proposal, since there are already several other offers made by other brokers for the same property.
6. Step: Accepting the Offer
Once the offer is accepted, the buyer is required to make an initial bona fide deposit. This deposit usually refers to an amount ranging between $1,000 to $10,000, which is placed in an account belonging to the title company responsible for the entire transaction. The Title Company will be in charge of all paperwork regarding the transfer of title, notarial deeds, real estate registry, etc. The aforementioned deposit may be sent via wire transfer, from your bank (in Brazil) to the Title Company’s bank, in the United States. It’s a quick and safe procedure. There’s also the option of paying via electronic check from your bank to the Title Company’s bank. This is all done online.

7. Step: Inspection
Prior to the completion of the purchase, a property inspection will be conducted by a specialized company hired by the buyer, and its employers will verify the property’s condition before purchase. The inspection focuses on details such as: infiltration, wall painting, air conditioning functioning, as well as all other appliances; swimming pool, heater, piping, etc. After the inspection is completed, the buyer will receive a detailed report with all that has been verified and the results found, followed by adequate recommendations. The price and duration of the inspection vary depending on the property size. During the inspection, we will follow the inspector’s assessment of the property and wait for the evaluation works to be done. Upon completion, the report is emailed to the buyer with details and property photos. The cost of the inspection can be added to the closing costs.

8. Step: Closing
On the date set for closing, the money should be in the title company’s account, and all documents must be signed by both parties. Closing costs will vary between 2% to 5% of the property’s selling price and these costs will be split equally between buyer and seller or in a different manner, otherwise previously agreed. The closing procedures for properties paid in full or in cash can be completed in 15 days or less. And its main advantage is that the buyer doesn’t need to be physically present to sign the documentation. It can all be done online. For financed properties, closing takes at least 40 days. The buyer must be present on the day of closing to sign the documents, in case of financing.