Buying a home in a foreign country can be a daunting task if you are not familiar with the process of buying real estate in the new country and the steps of buying a home in America for Canadians, and how it is different from your home country.
However, it can also be an exciting adventure if you take the time and effort to educate yourself and know all the details of the purchase process as well as your tax status in both Canada and America.
As a Canadian, you can buy a home in America without restrictions from the US government. as There are no restrictions on the purchase of US real estate for any foreign national.
This could be an attractive decision for many Canadians looking to take advantage of the relatively low home prices in the United States and access vacation homes located in many parts of America.
Steps to buying a home in America for Canadians
The following steps show you the process of buying a home in the United States:
- Decide where you want to buy a home in the United States.
- Look for a real estate agent with experience in international real estate transactions, preferably with a specialist designation such as CIPS (Certified International Property Specialist). CIPS-appointed real estate agents have the experience to work with international clients – whether Canadian citizens residing in the United States or non-resident Canadian buyers.
- Understand how to work with a real estate agent in the USA
- Be aware of your tax situation across the border between the two countries.
- Start your home search with a real estate agent
- Bid on the property you want and put the finishing touches on your dream home in the USA
- Perform a home inspection.
- Signing the purchase contract with the seller.
- Obtaining real estate financing through a US mortgage for foreign citizens or a Canadian financial institution operating in America.
- Get ownership of your new home in the USA.
- If you’re looking to buy rental property in the United States to generate rental income (or use the property as a rental property and vacation home), consider the following quick tips.
Tips for Canadians buying rental properties in America
- Find the areas where there is demand for rent in the area of purchase you intend to purchase. Understanding how much rental income your property can generate will allow you to make an informed decision about the type of investment option that is best for you.
- If you plan to use your investment property as a vacation home as well, make sure you are aware of the peak season and the demand for rents in the peak months, so you can have your perfect vacation in the United States.
- Hire a good property management services company that takes care of your investment while you are away.
- Work with a real estate agent experienced in foreign national transactions, such as CIPS (Certified International Property Specialist).
- Don’t forget about taxes and insurance – If you’re looking for a return on your US property investment, make sure you understand the tax obligations with capital gains (when selling the investment property) as well as US taxes on your rental income. You are also responsible for paying property tax on your property in the United States.
How much do Canadians buy US real estate each year?
Canadians bought 8,800 existing home units worth $4.2 billion from April 2020 to March 2021, down 52% in terms of unit count (18,300 over the same period last year) and 56% in dollar volume ($9.5 billion). During the same period (last year’s period).
Most of this reduction can be attributed to travel restrictions due to Covid-19.
Below is a table of historical trends in purchase volume and number of existing home purchases by Canadian citizens in US real estate:
Can Canadians get a mortgage in America
66 percent of Canadians who bought US real estate between April 20 and March 21 paid for their property in cash. However, did you know that Canadians can get a mortgage in the United States at competitive rates without having an American credit history.
Canadians can find US mortgage service providers who are willing to offer US home loans to foreign nationals.
So, whether you are buying a home in the United States to live in or to use as an investment property or vacation home, mortgage solutions are available without a US credit history at competitive rates to meet your needs.
These are US mortgage lenders that specialize in foreign national mortgage products and take into account non-traditional data points to assess your credit risk, including your credit history outside the US. These lenders may also look at rental income in the United States to qualify you for a mortgage in the United States.
You will likely be required to make a minimum down payment of 20-25% of the purchase price for most foreign national mortgage product options in the United States.