Foreigners Buying House in the US Timeline (2024)

Are you a foreign buyer looking to buy a home in the United States? Confused about how long the entire process will take? This article will provide a comprehensive timeline on what to expect when buying a house in the US as a foreign buyer!

Whether you have your eye on a single-family house in the suburbs or a condo near a metropolis, acquiring your ideal property may take time. The purchase of a home involves many steps, from finding the right property to negotiating a sales price and securing financing. The entire process can take weeks or even months to complete.

So how long does it take to buy a house in the US? Let’s take a look at the average timeline for the entire process.

Overview of the Timeline to Buy A House in The US.

The process of buying a house in the US can be roughly divided into three main stages:

1. Finding the right property

It would take about 6 to 8 months to find the right house.

2. Negotiating a sales price

The time taken to negotiate a sales price would depend on the situation. It could take anywhere from 2 hours to 2 months.

3. Securing financing and closing the deal

Typically, it would take 30 to 45 days to secure financing and close the deal. However, this timeline may be extended if there are any complications with the loan process.

4. Closing the deal

Once you have found the right property and secured financing, you will need to close the deal. This involves signing a sales contract, transferring the down payment, and completing any other necessary paperwork. The entire process can take about a month to complete.

Each of these stages can take anywhere from a few days to several weeks to complete. In total, the entire process can take anywhere from a few weeks to several months.

How Long Does It Take To Buy A House in the USA as Foreigners?

The timeline for buying a house in the US can vary depending on several factors. As a foreign buyer, your country of origin, your immigration status, your visa status, and your financial situation can influence how long it takes to buy a home. The type of property you’re interested in and the current housing market conditions also affect how long it takes to buy a home.

Typically, purchasing a home takes 5-6 months, excluding the savings part. The 2-3 months it takes to find the ideal home is included in that range. From the time of contract to closing, another 1-2 months will pass. Remember that it’s only a rough average. Many factors can affect your home purchase, depending on your circ*mstances.

Let’s break down each component of the home-buying process in more detail.

1. Time Taken to Save for a Down Payment: A Few Weeks or Years

For foreign buyers looking to buy a house in the US, the biggest challenge is usually coming up with a down payment. The average down payment on a home in the US is 20% of the purchase price. For a $250,000 home, that would be a down payment of $50,000.

Depending on your financial situation, saving for a down payment can take weeks, months, or even years. If you have a lot of money saved up, it may only take a few weeks to come up with the down payment. You’re ready to move on if you already have a down payment equal to at least 10–20 percent of the cost of your home.

If you make a cash offer, a house can take as little as 2 weeks. Because there isn’t a mortgage, which means less paperwork, buying a house outright can be less complicated than financing a home purchase. But many people are unable to make an all-cash purchase.

In that case, foreign buyers can look into getting a mortgage from a foreign bank or a US bank. You may be able to finance up to 80 percent of the purchase price of your home if you qualify for a mortgage. The required down payment would then be 20 percent of the remaining cost of the house, plus any closing costs. To know more, refer to our Guide on Foreign National Mortgages.

Your monthly mortgage payment will be easier to manage if you save a sizable down payment. Additionally, you’ll pay off your debt and save tens of thousands of dollars in interest on your mortgage.

2. Time Taken to Obtain Pre-Approval: A Few Days

A lender’s estimation of the amount you can borrow based on your income, credit score, and debt is known as a mortgage pre-approval. You must obtain a pre-approval, determining whether you are eligible for a mortgage. Tax returns, pay stubs, debt information, and credit information are among the documents you’ll need; if you’re purchasing with a spouse or partner, you will need to provide these documents.

Suppose you’re a Foreign Buyer with low to no US Credit History. In that case, home-financing options without US credit history are available to meet your needs, whether you’re purchasing a home in the US to live in or use as an investment property. These US lenders focus on mortgage loans to foreign nationals and evaluate your credit risk using non-traditional data points, such as your credit history outside the US.

A mortgage preapproval typically takes a few days to complete and may be valid for up to 90 days, though this varies by lender.

Obtaining preapproval from multiple lenders enables you to compare loan offers and select the one with the best interest rate and conditions. Preapproval involves a hard inquiry on your credit report, but if you shop for rates within 45 days, the impact on your credit score can be reduced.

Additionally, you can submit applications to various lenders to compare their rates. Because you are purchasing a home, there is a 14-day window during which credit bureaus will only count one credit inquiry. The type of mortgage you are qualified for, the loan amount, and other details are included in a preapproval.

3. Time Taken to Look for a Home: 6 Months To 1 Year

It’s time for the exciting part — house hunting — now that you’ve been pre-approved for an international mortgage. Find a good agent first who has experience with international real estate deals and is certified, preferably with the CIPS (Certified International Property Specialist) title in the U.S.

Finding the ideal home is frequently the most time-consuming purchasing process. In a competitive housing market, you should prepare to spend months or even a year looking for a home as many factors are involved.

Make a list of the things you absolutely must have first. Finding the neighborhoods, commutes, commute times, schools, community centers, and shopping areas that suit your lifestyle can help determine your must-haves.It could also involve deciding whether you require a ranch, a two-story home, or a certain number of bedrooms (or perhaps a large garden to accommodate your rapidly expanding gnome obsession—no judgment here).

How long it takes to find a house also heavily depends on the housing market. The best homes at the lowest prices sell quickly when there is fierce buyer competition in a market with few homes listed for sale.

Working with a real estate agent is the best way to expedite the shopping process. You can start scheduling appointments with real estate agents once you have your preapproval letter.Agents now more than ever serve as your eyes and ears when looking for a home.

If you’re a foreign buyer, you might not get a chance to visit the house in person, depending on the real estate market you’re looking in. If so, you’ll need to base your decision to submit an offer on pictures, virtual tours, and your agent’s evaluation of the property.

For this reason, selecting a real estate agent whom you can trust and being aware of what they do are essential to your success in the market. When making one of the most significant decisions of your life, you must have faith in your agent’s morals, knowledge, and judgment.

Check out this comprehensive guide on Buying a House in the U.S. as a Foreign National if you want to learn more about the procedure for purchasing a home in the United States or working with a real estate agent skilled in dealing with international real estate transactions.

4. Time Taken in Making an Offer: A Few Days or Longer

When you find the ideal house and are prepared to make a purchase, your real estate agent can assist you in submitting an offer. For foreign buyers, making an offer on a home may require more time than it would for domestic buyers. Not only do you have to be comfortable with the house itself, the surrounding neighborhood, the commute, schools in the area, and any other amenities important to you and your family.

The decision to make an offer is not to be taken lightly, as it’s a legally binding contract. The time taken to make an offer, especially for foreign buyers, will depend on how quickly you and your agent can agree on the terms of the contract.

Your real estate agent will write an offer letter specifying the sale’s terms. Your agent will likely suggest making an offer above the asking price, waiving contingencies, and being flexible on words like the move-in date in the pandemic housing market.

Sellers and buyers may bargain over specifics such as the purchase price, closing costs, and necessary repairs before closing in a more balanced market. Sellers may accept, reject, or counter your offer once the market has reached equilibrium, and both buyers and sellers have some negotiating power.

5. Time Taken To Get Ready For Closing: Roughly 2 Months

Once the seller accepts your offer and the house is under contract, the closing procedure starts. Get ready to close your mortgage loan when you and your sellers agree.

Most lenders need 30 to 45 days to finalize the terms of your loan and confirm that your home satisfies the minimum standards for your loan. The same applies to foreign nationals and buyers. However, the process may take longer due to different documentation requirements and time zones.

Be sure to communicate your needs to your loan officer so they can set expectations and keep you updated on the loan process. Your lender will underwrite your appraisal during this time loan. The amount of time also varies according to the type of loan and how long it takes you to finish the below steps.

I. Underwriting process: 1 Week +

The mortgage lender verifies your loan eligibility during underwriting by reviewing your immigration status, employment records, credit history, and debt-to-income ratio. Underwriting can be finished in as little as two to three days, but it typically takes over a week.

Avoid making last-minute bill payments or changing jobs during underwriting because these actions could jeopardize your mortgage application.

II. Appraisal Of The Home: Up to a Week

After the offer is accepted, a property appraisal and home inspection are usually conducted. The lender typically orders the review, which determines the house’s value.

The appraisal process typically takes a few hours, depending on the size of the property. The appraiser may need up to seven days to review nearby comparable, recently sold homes and produce a report of the home’s assessed value.

III. Home Inspection: 7 to 10 Days

Although not required, home inspections are advised because they may reveal expensive structural issues with the home. After the offer is accepted, home buyers typically have seven to ten days to schedule the inspection. While inspections can usually be completed in a few hours, you might need to wait up to ten days for the results to be reported.

IV. Conducting The Title Search: At least 2 Weeks

A title search identifies the valid owner of a piece of property and reveals any pending claims. The time needed for a title search can range from two weeks to several months, depending on the property and transaction.

6. Time Taken To Finish the Closing Process: Around 1 Week

Once your appraisal is approved, and your lender has finished reviewing your loan, it is time to close. The seller will first execute a deed giving you ownership. A crucial document, the Deed establishes rights. Your name on the Deed and the seller’s signature indicating that the property has been transferred to you. The paper will then be notarized by a Title Closer and filed with the local government office. This is done to keep you safe.

You will then receive a document called a Closing Disclosure from your lender. The final terms of your loan, such as your APR and the closing costs you must pay, are described in this document.Examine your Closing Disclosure and share your lender’s acknowledgment that you have read it. Your lender is required by law to give you at least 3 days before the closing meeting to read your Closing Disclosure.

Your lender will arrange a closing meeting once the 3-day window has passed. You’ll sign the loan documents, make the required down payment and closing costs, and then take possession of your new home. Remember that your closing appointment may easily exceed its allotted time if you are unprepared. You should attend the meeting with a valid form of identification (like a passport or driver’s license), a copy of your Closing Disclosure, and a certified cashier’s check to cover closing costs.

In addition, you can read our guideMortgage Closing Process: All You Need to Know About Your Closing and Closing Disclosureto get a detailed understanding of the various steps involved during the closing of your home loan.

Common Reasons For Delays When You Buy a House

Delays occur in a sizable percentage of contract sales. The National Association of Realtors (NAR) lists a wide range of potential problems that could pose obstacles, such as:

• The purchaser has a hard time getting financing.
• The value listed in the appraisal report doesn’t match the loan requirements.
• Serious repairs are required, according to the home inspection report.
• The title and deed have problems.
• Hazard and flood insurance have issues.
• The purchaser is made redundant.

Other issues which are faced by foreign buyers which can cause a delay at the time of buying a house are:

• Lenders are extra cautious when it comes to foreign buyers.
• They might ask for a larger deposit from foreign buyers than domestic buyers.
• The documentation required for a foreign buyer is also different and extensive compared to a domestic buyer.
• There might be a language barrier between the foreign buyer, the real estate agent, or the lender.
• The cultural differences between foreign and domestic buyers can also lead to delays.
• The time difference between the foreign buyer and domestic seller can make coordinating challenging.
• Foreign buyers might not be familiar with buying a house in the US, which can lead to delays.
• The legal process in the US can be complicated and time-consuming for foreign buyers.
• There might be a difference in the expectations of both parties as well. The foreign buyer might not be aware of buying a house in the US, which can lead to delays.

One of the most common delays is when the buyer encounters financing difficulties. In fact, according to NAR, financing issues were the cause of almost 20% of delays. Issues with appraisals rank as the second most common reason for delays. If you make a cash offer, you can avoid this; otherwise, you might need to get a second appraisal, put more money down, or renegotiate the price with the seller.

Treat your lender’s communications as a top priority to keep the process moving. If your lender asks for more proof of your earnings or employment, get back to them as soon as possible.

One more straightforward guideline to help make the procedure as painless as possible: The sooner you can get your finances under control and obtain a pre-approval, the less stressful and time-consuming the transaction will be.

The Takeaway

Buying a house usually takes longer than people anticipate. If everything goes smoothly, the process may take around two months. However, delays are common, so preparing for potential problems is essential. Understanding the steps involved in buying a house and working with experienced professionals can help ensure your home-buying experience is as positive as possible.

Frequently Asked Questions