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Four Points for New Immigrants to Buy a House

  This article summarizes the questions about "taxes, risks, loans, and real estate brokers/lawyers" caused by investing in real estate in the United States, hoping to help everyone complete real estate investment more smoothly.

1. About tax

  "Non-citizen couples are not allowed to enjoy the unrestricted right to automatically inherit property between U.S. couples, so the spouse who dies later will have to pay estate tax first." What does it mean?

  The U.S. policy stipulates that U.S. couples have unlimited rights to automatically inherit property. After one party dies, the other party can automatically inherit its property without paying inheritance tax; non-U.S. citizen couples do not enjoy this policy, so the later deceased party inherits the property. Inheritance tax must be paid before inheritance.

  What is the difference between the personal allowance and the standard deduction?

  Tax-free amount refers to the amount that is exempt from tax among the total amount of taxable objects stipulated in the tax law. No matter how big the amount of the taxable object is, if it does not exceed the exempted amount, no tax will be levied; if it exceeds, it will be taxed separately.

  The standard tax deduction is similar to China's progressive tax rate. The threshold is set, and the excess part is increased according to the level with the increase of the tax base. The higher the level of the tax object, the higher the tax rate.

  Why do real-time personal income tax be zero when the real estate cannot be rented out smoothly or cannot make ends meet due to other reasons, and still need to make a declaration?

  Making a declaration does not imply paying tax. When the income is negative, the personal income tax is zero, and a declaration is still required.

2. About risk

  -Q: The fees of the real estate agent are paid by the seller. If there are intermediaries on both sides, is there any collusion between the intermediary and the seller to raise the house price? How to protect the rights and interests of the buyer? Are there any relevant legal provisions?

  U.S. law stipulates that real estate agents or agents engaged in real estate transactions must hold a license. If the agent does not consider the interests of its own agent, the license may be revoked.

  -Q: What are the advantages and disadvantages of a company-owned home versus an individual-owned home? Is there a necessary connection between foreclosure houses with leases that can only be bought in the name of the company and foreclosures with leases that can only be bought in the name of individuals?

  Compared with individuals, companies have the characteristics of perpetual existence and limited liability. If the company holds the property, the longevity and security of the property holding can be achieved. At the same time, by holding the house in the name of the company, the house can be gifted and inherited between the shareholders of the company, and the tax problems such as gift tax and inheritance tax caused by the transfer of property caused by non-US status can be avoided. At the same time, the daily expenses and expenses of the real estate can also be deducted accordingly when the company declares. The main disadvantage of using a company to hold property compared to personal ownership is the initial cost of setting up the company. There is no necessary connection between the two. It is more advantageous to buy a foreclosure house in the name of a company, and it will have a lot of convenience in the future tax payment, transfer and other transactions.

  -Q: The original owner bought a house with a loan of US$600,000. Later, he wanted to sell the house due to job transfer. At that time, the market price of the house had dropped to around 460,000, so he asked a broker to sell it at a loss, and a buyer offered 500,000 yuan. , but requires the seller to refund 3% to cover its loan fees, why does this offer not work?

  There is a risk of fraud in this offer. As far as the conditions are concerned, the buyer wants the seller to refund 3% of the house price to pay the loan. If you break the contract and don't buy a house or run away with money, the seller has to bear the loss.

  -Q: Regarding the purchase of a foreclosure house, why is it possible that the taxes and construction fees owed by the original owner may be transferred to the new owner?

  During the auction of the foreclosure house, the taxes and construction fees owed by the original owner are likely to be attached to the foreclosure house as an additional condition. If the new owner decides to auction the foreclosure house, he must accept this additional condition.

  -Q: Detroit's housing prices are low, but investment has great risks and there is basically no room for appreciation. Is there any value in developing Detroit's real estate market? In addition to the price factor, Chinese home buyers should consider more factors. Why do thousands of people come to Detroit to "buy the bottom"?

  Although Detroit's housing prices are low, high property taxes and the current poor public security in the city also make low-priced properties unworthy of investment. Investors should not only consider housing prices. Insufficient access to information is also the reason why investors make blind choices.

  -Q: What is the source of the bank house? Why do banks sell their bank houses?

  When many home lenders fail to repay their bank loans, the banks will apply to the court to auction the houses to realize their claims. But when the housing market is sluggish and house prices fall, the auction may not go out, and the bank can only own the house by itself. When the bank has more and more such houses, it means that the bank has more and more negative assets. In order to reduce the property pressure of negative equity and increase the amount and flow of cash, banks will sell these houses at low prices to reduce losses.

3. About loans

  Regarding the bank house, you can apply for a loan one year after the purchase of the house. The loan here refers to the mortgage of the bank house purchased before? So I have purchased the property, can I still take out a loan?

  One year after the purchase of the house, the property right of the property belongs to the individual and is no longer a bank, then a loan can be made.

  When Chinese people buy houses in the United States, the exchange of RMB for US dollars is usually limited by the amount, and most banks in the United States are reluctant to provide housing loans to Chinese buyers. Do you have any good advice on this issue?

  There is a limit on the amount of RMB exchanged for U.S. dollars. Each Chinese person has a limit of 50,000 U.S. dollars per year, that is, an ID card has a foreign exchange purchase remittance limit of 50,000 U.S. dollars within a year. It is best to go to Bank of China for domestic foreign exchange remittance. In addition, my country's monthly foreign exchange receipts for the same foreign payee to the same account shall not exceed three, that is, 150,000 US dollars. If you need to remit large amounts of money, it is recommended to open two more accounts in the United States. Bank of America is unwilling to provide housing loans to Chinese buyers in a targeted manner. This depends on the different borrowing conditions in different regions of the United States. The borrower's personal funds certificate and credit situation are the key.

  First loan, second loan? Why are the second lenders willing to take the risk of losing everything in lending?

  The first lender is the bank where the borrower uses the property as a mortgage for the first loan, and the second lender is the bank where the borrower uses the property as a mortgage again. The risk is high. The second lender decides whether to lend based on a number of indicators, such as loan amount, personal earning power (Earning Power), loan purpose and high interest.

  What are Points when taking out a loan? What's so special about "points"?

  What are "points"? "Points" are 1% of the home loan amount. For example: you are going to borrow 250,000 from the bank, then a "point", 1Point is 1% of the housing loan amount, which is 2,500 yuan. Two "points", 2Points is 2% of the home loan amount, which is five thousand yuan. If you want "points", you actually want to buy low loan interest with money. It can be said that if you generally borrow 250,000 from the bank, one "point" will reduce the interest by about 0.25%, and two "points" will reduce the interest by about 0.50%. In other words, if the current loan interest has no "points" and is 6%, one "point" means that you can buy a low loan interest rate of 5.75% with 2,500 yuan, and two "points" means you can buy it with 5,000 yuan. Low loan interest to 5.50%. In fact, it is obvious that "the wool comes from the sheep".

4. About realtors/lawyers

  -Q: To buy or sell a house, should I hire a real estate agent or a real estate lawyer?

  In the real estate sale, whether you want to hire a real estate agent, a real estate lawyer, or both, mainly depends on the local laws and regulations. Some states require only real estate agents to do house sales and purchases, some states require only real estate lawyers to do house sales and purchases, and some states require real estate agents and real estate lawyers to work together to complete house sales and purchases.

  -Q: Is the real estate agent's license valid state-wide or federally?

  U.S. real estate law is state law, not federal law. Therefore, the real estate broker license is only valid in the state, not the whole country. So when you choose a real estate agent, make sure that your real estate agent has a license in the state where you are buying your home.

  -Q: The real estate brokerage model is generally adopted in the purchase and sale of houses in the United States. What are the advantages of this model? Is it feasible for the parties involved to conduct private real estate sales directly without the real estate agent?

  In the real estate buying and selling in the United States, the model of real estate brokerage is very common. It is a legal form of buying and selling houses stipulated by special laws, and it also has clear regulations on the behavioral norms and responsibilities of real estate brokers. The advantage of adopting this model is that real estate brokers can use their professional services to explain the progress of house sales, save time for both buyers and sellers, and improve the work efficiency of the real estate industry. Real estate agents are generally responsible for their work. Real estate brokers are basically very cautious about some illegal acts of abduction and deception. Because in the United States, a country with a sound legal system, it is really not worthwhile to lose one's job for the sake of immediate interests, and get a license revoked or a criminal offense. Of course, buyers and sellers can also trade privately without going through a real estate agent, but the premise is that you have very professional real estate knowledge, or the other party is a trusted friend or acquaintance. Otherwise, you are likely to increase the risk of the home transaction, such as the title of the home is flawed, the quality of the home is questionable, the seller is fraudulent, and so on.