You know, buying a home overseas, or over the border is one of those things that many people here in America dream about. It’s just such an over-the top, romantic notion - the very idea of buying a vacation home, a retirement home or even an investment property - in another country.
But for a lot of Americans, it’s not a dream...it’s a reality. Because they did it!
And if you’d like to join their ranks, by buying that condo in the heart of London, that ranch way out in the Australian Outback, or even a fishing lodge in British Columbia, well, you can. So let’s take a few moments now to talk about – how to make that happen.
First of all, you have to find the property. REALTOR®.com can help with that…they have a big international search engine, and as we mentioned on the show, it just got a lot bigger. So that’s a great place to start.
Next up, talk to a REALTOR® here in the US, one with the CIPS designation…that stands for Certified International Property Specialist. REALTORS® with that designation have the education, the training and the experience to help you make those dreams come true. In many cases they already know trusted real estate professionals in the country you’re looking at….so you won’t have to just roll the dice. You’ll be working with real estate agents in other countries – who have proven track records…and relationships with REALTORS® here at home. Those referrals are really important.
Next up, how to pay for it? Well, in most cases you’ll have to have the cash lined up in advance…because getting a mortgage in a foreign country? That’s not easy. So many people use the equity in their American homes to do the deal. Others sell stock. Others might even cash in a 401K….but whatever approach is right for you, talk to your accountant….before you make any big financial moves.
Now, if you DO want a mortgage, we’ve heard it might be possible, if you work with a major international bank, which has branches both here in the USA….and in the country where you’re buying property. There’s no guarantee, but with locations in both countries, it will be easier to track your credit, your reserves and your income…..the biggest of the big American banks all have offices around the world. It’s worth looking into.
Another issue is the exchange rate. If it were to swing up or down, you might end up either saving money – or paying a lot more. There are companies that let you lock in an exchange rate – for a fee – but it might save you from having sudden, unexpected sticker shock…when you get to the closing in that foreign country.
We mentioned your accountant a few moments ago – so while you’re talking to your financial adviser, ask them about taxes. That’s important, especially if you’re buying an investment property. But whether it generates income or not, find out the tax implications, because someday you might want to sell it….and obviously you won’t have the luxury of the capital gains exemption, or the 1031 like kind exchange, like you do here in the USA.
Speaking of which, here in the US when you buy something you own it! But that’s not always the same deal in other countries. You might own the house but not the land, that sort of thing.
Which brings us to our last piece of advice: when you buy in another country – get an attorney. Our international expert, REALTOR® Patricia Tan, says always have an attorney by your side – and not one that was recommended by the seller. Rather, get an independent attorney – who can explain ownership laws, walk you through the deal, and look after your best interests the whole way.
Ok so that’s a lot to think about. But it’s worth it. Because buying a home in an exotic, faraway land – is possible. It’s one of those dreams that can – come true. Maybe for you…if you have a passion -for Going Global.