Step-by-Step Breakdown of a Purchase through American Properties
The process of purchasing a US investment property can be confusing and opaque for those who are new to the US market. At American Properties, we pride ourselves on our experience, local knowledge, and network of trusted partners that we leverage to guide you through this process as seamlessly as possible. When you signup with American Properties you are assigned a dedicated agent who is your personal, dedicated point of contact throughout the entire investment process – we dislike being bounced between departments as much as you do.
Before signing up as a American Properties member and undergoing our comprehensive US Property Investment setup process, we recommend that you thoroughly review the free educational materials provided throughout our “Real Estate Investor University” and conduct your own due diligence of the US market and economy. Knowledge and proper due diligence are crucial factors in determining the success of your investment. If you do decide that USA property investment is for you, then this is how it would happen:
The Process of Setting Up for Success
- Signup for an American Properties Membership and enjoy the safety and simplicity of our comprehensive USA setup process.You will be introduced to your dedicated American Properties Agent who will begin by assisting you in two key ways:
- You will receive a comprehensive consultation covering your investment goals and answering any questions you may have.
- Your agent will guide you through the setup of your investment structure to ensure you are correctly incorporated into the US Legal and Tax system.
Click here for more details on our comprehensive American Properties Membership
- Prepare you investment fundsTransfer the funds you wish to use to purchase your US property to the US through the foreign exchange account we helped you establish earlier. Having liquid funds ready to utilize in the US is critical in this fast moving US property market.
- Receive list of handpicked properties aligned with your personal investment criteriaThis is the exciting part! Properties fitting your criteria will be presented to you. You will have ample time opportunity to conduct your own due diligence and decide on the property that is right for you (your dedicated American Properties representative will guide you through this process).
- Decide on a property and make an offer to purchase
After reviewing your options and deciding on the best US property investment for you the next step is to place an offer to purchase it. Once your offer is accepted a purchase agreement will be sent to you.
- Optional legal representative review of dealThis is optional but recommended. A lawyer can review all aspects of the purchase contract and protect your interests. It is better to have this review then be burned with unexpected costs or problems in the future. One of the things your lawyer is very likely to request on your behalf is a property inspection period of typically 10 days. See more on this below.
- Sign purchase contract and transfer earnest money deposit (EMD)Once satisfied with the terms of the contract you would then sign it, return it to the seller, and provide the earnest money deposit (EMD). The EMD can vary but will typically be between $1000 and $3000. This is wired directly to the title company who will handle the transaction and hold funds in an escrow account until closing.
- Optional property inspectionAfter the contract is signed and EMD transferred you are able to conduct all appropriate due diligence on the property such as a property inspection. This is optional but highly recommended, if not mandatory. A property inspection is typically performed by a licensed professional who will identify physical problems with the property. Sellers are generally willing to repair all faults, but in the event of major faults or refusal to repair you are entitled to opt out of the deal or negotiate a lower price. See our services page for more details on this.
- Receive closing documents, sign and return.Once your due-diligence is complete and you are ready to complete your purchase, it is time to sign the closing documents. These are prepared by the title company handling the transaction. Once signed you will typically return them via email with hard copies following via express mail.
- Transfer of purchase funds to title companyIn parallel with signing the closing documents you are ready to transfer the funds to purchase the property. This can be completed via bank wire from your US account or even directly from your Australian account if required. Funds are always transferred to the title company handling the transaction and never to the seller directly.
- Close transactionThe title company will complete all require steps for closing, including lodging the appropriate paperwork with the County to transfer ownership of the property to you. You now own the property!
- Introduction to property insurance firm suited to your investmentYour property will need to be insured as soon as possible after closing has occurred, and often in parallel with the closing itself. Your American Properties representative will as able to assist you with this. See our services page for more information on property insurance.
- Introduction to property management suited to your investmentYour dedicated American Properties representative will have suitable property manager lined up for you. If it hasn’t happened sooner, you will be introduced to your property manager at this point. See our services page for more information on how we find you the best property managers in the business.
- Conclusion of purchase. At this point you own the property and are ready to sit back and watch the cash roll in. The documentation pertaining to the deal will be sent to you electronically and also via mail for your records. Now is the time to enjoy your investment and begin to focus on the next property to add to your portfolio.