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Should I buy or rent a house in the USA when I emigrate?

Posted by By Kirsty Parsons - November 19, 2014

should i buy or rent a house in the USA?Deciding whether to buy or rent a house in the USA is a big decision. Perhaps the most fundamental part of your overseas move, finding somewhere to live is one of – if not the – most important factor you’ll face.

What you choose to do regarding buying or renting your new house is completely circumstantial – perhaps you’re part of a corporate move and your company is arranging your accommodation for the length of your stay; you might be moving permanently with your family, thus requiring somewhere to settle for the long-term in a neighbourhood with schools/amenities; you might have accepted a job offer but are having to sort your own accommodation and want to rent for a while whilst you figure out if your new life suits you/the property market improves; if it’s a fixed term contract and you’ll be gone for less than 12 months then you might just be looking for a short-term rental and are planning to rent your own house out back home to cover the costs – whatever your situation, there are probably a thousand and one questions that need answering.

So, should you rent or buy a house in the USA? Both are big decisions to make and ones which you’ll need to take careful consideration over…

Buying a house in the USA

Many of the steps to buying a house in America are the same as here, but just presented in a different way. However, there are some key differences you’ll need to be aware of:

  • There are two types of Agents in the USA – Buyer’s Agents and Seller’s Agents. Both shares the commission of a house sale, but it’s the Buyer’s Agent you’ll have most interaction with throughout the process as they help you find the right property and guide you through the purchase process.
  • Property viewing is slightly different. In the US, it’s general practice for the sellers to be completely absent during a house viewing, and the property will be shown to you by the Seller’s Agent, although you can usually be accompanied by your Buyer’s Agent, who will be able to discuss any concerns or questions you might have.
    Viewing a house in the US is also much more “hands-on” – you’re encouraged to explore the house more thoroughly than you would here, with the opening of drawers, cupboards and attics all par for the course.
    You might notice that houses you view all look somewhat ‘staged’ – and that’s because they are. It’s not unusual for sellers to completely re-paint and re-carpet their entire houses and many put a large proportion of their belongings into storage throughout the viewing process.
  • Real Estate contracts also work differently. In England, a house sale is not finalised or binding and no firm closure exists until the very last minute. Arrangements can and frequently do collapse at any time up to that final sale closing.
    In America, however, once a buyer’s offer to purchase a property is accepted, the contract and timing is fixed and binding. The closing date of the sale is defined and agreed right from the start of the process and the buyer is fully committed to completing the purchase by paying an “earnest money” deposit into escrow as part of the agreement. Typically around 1-3% of the overall sale price, the earnest money will be kept by the sellers if the purchaser is unable to complete the sale to the agreed time.
  • For the reasons above, you’ll need to be extremely careful when selling a home in the UK at the same time as buying in the US – as it’s much harder to set a definite date for completion in the UK, you need to be absolutely sure you can guarantee the sale of your UK home in time to complete the purchase of your US one.
  • Once you’re sure you want to make an offer on a house in the US, you’ll need to do a little bit of homework on some of the extras associated with it. Check where you stand regarding Real Estate Property Tax – a levy that’s applied to most households on an annual basis and fluctuates depending upon the state or county you’re residing in.
  • Similarly, check where you stand with Homeowners Association Fees – these are either annual fees or one-off assessments, but you should be aware of what applies to your house before you buy.
  • Property maintenance and upkeep fees – something we’re all guilty of forgetting about, but bear in mind that houses in the US are generally bigger than what we’re used to here, thus increasing the costs of general upkeep.

Renting a house in the USA

If buying isn’t an option, then you’ll be relieved to know that renting is a much simpler process. But as with here, you need to remember to follow a few golden rules…

  • As with the UK, most landlords in the US will usually require at least one month’s rent up front and another to put down as a deposit. Newcomers to the US without a credit history may be required to pay a little more up front.
  • Again, much like you do here, you’ll either sign a 6/7 or 12 month lease and may be asked for references.
  • Rental prices will, obviously, vary according to location. Desirable, inner-city or beach front locations will always command a higher monthly fee than a more typical ‘Middle America’ type location.
  • If you use a broker then they will charge a fee for helping you to find a place to rent. If you want to keep costs down then keep an eye on adverts in local papers and magazines and search regularly online.
  • Be aware that you will in most cases have to fill out an application form and pay for any application fees or credit reports required by your landlord.
  • Just like here, you’ll face tough competition when it comes to securing a place to rent. Build yourself a Renter’s Resume – much like a CV for job applications, a renter’s resume builds a portfolio of essential requirements that can be presented clearly to any potential landlord. A good one will enhance your chances and convince your landlord you’re a trustworthy tenant. Things to include should be personal references, a list of previous addresses with landlord phone numbers, a projection of your monthly income and a copy of your credit report.
  • Make sure you know exactly what’s included in your rent – ask about heating/water/electricity/cable and internet fees before you sign.
  • Also make sure you know the beginning and expiration date of your contract, full monthly rental price and information about the security deposit, reasons for which the landlord can terminate the contract, whether you’ll incur any penalties for moving out before the contract expires, who is responsible for repairs, whether subletting is allowed, whether pets are allowed, whether or not you need to buy renters insurance and the policy surrounding guest visitors.
  • It goes without saying that you should NEVER sign a lease without viewing the property first. And be very wary about signing anything that has an automatic renewal clause – a lot can change in 6-12 months, so unless you’re absolutely certain you won’t be moving on, don’t sign.
  • Also be wary about signing anything that gives the landlord unlimited access without notification.
  • When you do look around make sure you check that everything is in good working order – things like taps, pipes, heating, showers heads, water pressure, electricity/electrical appliances, walls and windows (do the windows lock? Are there any signs of damp on the walls?) and whether there’s any unnecessary noise coming from the neighbours’ properties.

If you’ve found your new home but need a hand getting your stuff there contact us for a free quote for removals to the USA.

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