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Gary, Home Buyer in Hayes Valley, San Fr...

Are there any special rules for forein buyers? Thanks

Asked by Gary, Hayes Valley, San Francisco, CA Thu May 12, 2011

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Hello Gary,

There are different guidelines for foreign buyers for loans. Mainly, you need at least 40-50% down payment and only ARM products are available. I work with a a couple of US lenders that handle foreign nationals. If I can be of assistance or if you have any further questions, please let me know.

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
mabram@firstcapitalmtg.com
1 vote Thank Flag Link Thu May 12, 2011
There are no special rules for foreign buyers if making an all-cash purchase. There are rules when a foreign property owner sells regarding tax obligations.

Oggi Kashi
Paragon Real Estate Group
CA DRE 01844627
Web Reference: http://www.oggikashi.com
1 vote Thank Flag Link Thu May 12, 2011
There are some special rules regarding foreign buyers when you are ready to sell your property around FIRPTA (see below). Depending on your income level, which if you are looking for something in San Francisco is probably on the higher side, you should also probably consult a tax advisor and possibly an attorney as depending on which country you are from can affect how you will want to hold property in the United States.

Also depending on if you are married or not there is a "death tax" that can kick in if a spouse dies that affects foreigners differently than US citizens. This is important as if you or your spouse dies and holds title of the property, there can be significant tax ramifications. Foreigners should consult an experienced estate planner.

Getting financing will also typically be an issue. Lenders will often time require 50% down or more but depending on which country you are from and what records you can provide you may be able to obtain traditional financing. Some countries have limits on what amounts of money can be transferred outside of the country. Also if you have a stock portfolio or other assets to use as security there are other financial options available.

FIRPTA ((Foreign Investment in Real Property Tax) rules can be summarized as there is a 10% withholding by purchaser when buying from a foreign seller. Residents and nonresidents alike are taxed in the U.S. on U.S. real property income and gains. There are some exceptions one of which is that if the purchase price is $300,000 or less and the purchaser is using property as primary home.

I know several specialists in San Francisco who specialize in mortgages, estate planning and tax advice for foreigners. If you want feel free to contact me and we can discuss in more detail.

Greg Bryan
(415) 640-4341
gregorybryan@gbandas.com
http://www.gbandas.com
Web Reference: http://www.gbandas.com
0 votes Thank Flag Link Thu May 12, 2011
Gary,

There are rules for foreign persons purchasing property in the US. You can visit the IRS site for information.

http://1.usa.gov/IRS_gov

Also you should consult with an attorney regarding reporting requirements and tax consequences.

Regards,
Lizete
Web Reference: http://www.LizeteSantos.com
0 votes Thank Flag Link Thu May 12, 2011
Hi Gary -

You might want to google FIRPTA. FIRPTA is a United States tax provision that imposes income tax on foreign persons disposing of United States real property interests. It's from the George Bush era. As agents, we have both buyer and seller sign a particular document related to it. Happy to send the document to you to review and to help you with all your real estate related needs.

Best regards, Kim

Kim Barnes, Realtor, A Top Producer
Hill & Co Real Estate
415-730-2593 Cell
415 935-1546 Google Voice
415-202-2432 Fax
kim@kimbarnes.net
www. kimbarnes.net
0 votes Thank Flag Link Thu May 12, 2011
Hi Gary,

There are, indeed, special rules for foreign nationals when buying and using a loan as part of the purchase price. Many banks like First Republic are receptive to those kind of buyers.

There are also special rules for sales of property by foreign nationals. You can go to my website, http://www.sallyrosenman.com and look under RESOURCES/LINKS for lenders to email or call and a link to the IRS website to learn all the rules.

Good luck,
Sally
0 votes Thank Flag Link Thu May 12, 2011
Hi Gary,

Yes, there are special financing requirements.

Do you plan to get a loan for your purchase?

We have worked with international clients recently (New Zealand, Saudi Arabia, England, etc) and can advise you as to which banks will be the best.

HSBC and First Republic are often the best for foreign buyers. Talk to Amy Ku at HSBC or Steve Rinehart at First Republic Bank. See link for contact information.

The process of buying real estate in San Francisco is pretty different than most other countries. Most home buyers hire their own "Buyer's Agent" at no cost to them. This buyer agent helps you to sort through all of the available inventory, regardless of Broker, and negotiate a great deal.

Best of luck with your plans and if you would like some help, please let me know.

Cheers,
Danielle
0 votes Thank Flag Link Thu May 12, 2011
Gary,

It's difficult if not impossible to get a loan from a US lender. We have an overseas client right now who is getting a loan at home to buy here and needs to put 50% down.

If you have cash, find out if there are any restrictions on transferring money so you can have the appropriate funds in time to close the deal.

We work with a lot of international clients - it's a completely different process and there are several things we do for out of area clients to make it easier. If you want assistance our contact info is below.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes Thank Flag Link Thu May 12, 2011
I would speak to lenders about that. A problem I am having right now as the listing agent is this: The buyer is Chinese and in China. Apparenty you can only transfer money at $50K at a time. The other problem is, it's relocation and the relo company wants them to get something noterized by an American so they have to make an appoinment at the Embassy which can take 2 weeks for an appointment.
0 votes Thank Flag Link Thu May 12, 2011
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