Ultimate Guide to Buying Property in the United States (2025–2026 Edition)

This guide is designed for overseas buyers and newcomers looking to purchase real estate in the United States.

The USA has one of the most open property markets in the world, with no federal restrictions on foreign ownership of real estate.

That said, buyers must navigate local regulations, taxes, financing rules and due diligence steps that vary widely by state.

Below you’ll find a comprehensive roadmap covering everything from planning and financing to closing, ongoing obligations and visa considerations.

1 Understand Your Goals, Eligibility & USA Location

• Confirm that you can buy – There are no federal ownership restrictions on non‑citizens purchasing real estate in the United States. Whether you’re an American expatriate, a dual citizen or a foreign national, you have the right to purchase U.S. property. You don’t need a U.S. visa or green card, but you will need a tax identification number such as an ITIN and will be subject to U.S. tax laws. See LINK » Individual taxpayer identification number (ITIN) – IRS.GOV
• Choose where to buy – Research property values, taxes and lifestyle in different states. Coastal states and major metropolitan areas tend to have higher prices and property taxes, whereas Midwestern and Southern states often offer lower prices but may have higher tax rates. Look up local zoning rules, school districts and short‑term rental regulations if you plan to rent.
• Decide on property type – Options include single‑family homes (freehold), condominiums, co‑ops, townhouses and multifamily buildings. Condos and co‑ops have homeowners associations (HOAs) with bylaws and monthly fees. In some states you may encounter leasehold property (e.g., parts of Hawaii and tribal land). What is a Homeowners Association (HOA) and how can you benefit from it? – Holidu
• Set a realistic budget – In addition to the purchase price, you’ll need funds for a down payment (typically 20% for residents, 30‑40% for foreign nationals) and closing costs (usually 2–5% of the price). Make sure you have cash reserves for property taxes, insurance, maintenance and HOA fees.

2 Finances & Pre‑Purchase Preparation

2.1 Obtain a U.S. Tax ID and Open a Bank Account

• Tax identification number (TIN) – You must obtain an Individual Taxpayer Identification Number (ITIN) if you don’t already have a Social Security Number. The ITIN allows you to pay property taxes, file returns and open bank accounts. Apply via Form W‑7 with the IRS. See PDF LINK » Application for IRS Individual
  Taxpayer Identification Number
• U.S. bank account – A local bank account makes it easier to transfer funds, pay closing costs and handle utilities. Banks will ask for your passport, ITIN or Social Security Number, proof of address and proof of funds. Some institutions offer “foreign national” accounts and require in‑branch visits, while online banks may accept remote applications.

2.2 Financing & Down Payments

• Mortgage for residents – U.S. citizens and permanent residents typically need a minimum down payment of 20 % to avoid private mortgage insurance (PMI). First‑time buyers can sometimes put down as little as 3–5% through FHA or VA programmes.
• Foreign national mortgages – Lenders offer special programmes to non‑resident buyers but require higher down payments (usually 30–40%) and may charge higher interest rates. Banks also require proof of income, banking references, a valid passport and an ITIN. Cash purchases are common for foreign buyers.
• Pre‑approval – Before shopping, obtain a mortgage pre‑approval letter or proof of funds. This shows sellers you are serious and helps determine your price range.
• Credit considerations – U.S. lenders evaluate your credit history and debt‑to‑income ratio. Newcomers with no U.S. credit may need to provide international credit reports or bank references.

2.3 Hire Professionals

• Real estate agent – Choose a licensed Realtor familiar with the local market and experienced in international transactions. Buyer’s agents are typically paid by the seller through the listing brokerage.
• Real estate attorney – In some states (e.g., New York, Florida) attorneys handle contracts, title searches and closing. In others, escrow companies or title companies perform these roles. An attorney ensures contracts are fair and protects your interests.
• Title/escrow company – They hold funds in escrow, perform the title search, issue title insurance and facilitate the closing. Title insurance protects you against liens or ownership disputes.

3 Property Search, Offers & Deposits

3.1 Finding Properties

3.2 Making an Offer & Earnest Money

• Offer letter – When you find a property, your agent prepares a purchase offer including price, contingencies and closing date. The seller may accept, reject or counter.
• Earnest money deposit – To show serious intent, buyers include an earnest money deposit of around 1 %–3 % of the sale price, held in an escrow account until closing. Higher deposits can make offers more attractive, particularly in competitive markets.
• Contingencies – Common contingencies include home inspection, appraisal, financing and sale of your current property. These clauses protect your deposit if you back out for valid reasons. Without contingencies, you may forfeit your earnest money.
• Escrow account – Always deposit earnest money into a third‑party escrow or title company to safeguard funds.

4 Due Diligence & Inspections

• Home inspection – Hire a licensed inspector to check the structure, roof, plumbing, electrical systems and major appliances. If significant issues are found, you can renegotiate or walk away under a contingency.
• Appraisal – Lenders require an appraisal to ensure the property’s value supports the loan amount. If the appraisal is low, you may need to negotiate the price or increase your down payment.
• Title search & insurance – The title company verifies that the seller has clear ownership and identifies liens or encumbrances. Purchase both owner’s and lender’s title insurance policies.
• Survey – In some states, a land survey confirms property boundaries and identifies encroachments or easements.
• Homeowners Association (HOA) review – For condos or planned communities, review bylaws, budgets, rules and pending assessments. HOAs can restrict rentals, pets or renovations.

5 Finalise Financing & Closing

• Secure your mortgage – After your offer is accepted, work with your lender to finalise the loan. Provide updated documentation (income statements, bank statements, appraisal). Lock your interest rate and review closing disclosures.
• Closing costs – Expect to pay 2 %–5 % of the purchase price for closing costs. These include lender fees, attorney fees, title insurance, appraisal fees, recording taxes and prepaid property taxes. Your lender will provide a Loan Estimate and Closing Disclosure outlining all charges.
• Sign closing documents – At closing, you will sign the deed, mortgage, promissory note and other documents. Your attorney or escrow agent explains each document. Bring photo ID and certified funds or arrange a wire transfer for the balance of the purchase price and closing costs.
• Record the deed – After closing, the deed and mortgage are recorded with the county recorder. You will receive the keys and become the legal owner.
• Post‑closing tasks – Arrange utilities, set up homeowners insurance, and consider creating a U.S. will to address succession and estate tax issues.

6 Pre‑Construction & New‑Build Purchases

• Reservation & deposit – For new developments, developers may require a reservation agreement and staged deposits (e.g., 10% at contract signing, additional payments at construction milestones). Deposits must be held in an escrow account.
• Builder warranties – New homes typically come with builder warranties covering workmanship, materials and structural elements. Review warranty coverage and state laws.
• Interim occupancy – In condo projects, you may have an interim occupancy period where you can move in before the unit is legally registered. You pay an occupancy fee similar to rent until closing.
• Condo disclosure – Developers must provide a public offering statement or disclosure package detailing budgets, bylaws and risks. Some states grant a cooling‑off period to cancel the contract.

7 Taxes & Ongoing Costs

• Property taxes – Annual property taxes vary widely by state and county. Low‑tax states (e.g., Hawaii, Alabama) charge under 0.5 % of assessed value, while high‑tax states (e.g., New Jersey, Illinois) charge over 2 %. Property taxes fund schools, roads and local services.
• Homeowners insurance – Required by lenders; covers damage from fire, theft, storms and liability. Flood or earthquake insurance may be separate.
• HOA/condo fees – Monthly or quarterly assessments cover maintenance of common areas, amenities and reserves. Fees vary depending on building size, amenities and location.
• Income tax on rental income – If you rent your property, you must report rental income on your U.S. tax return. Foreign owners can elect to be taxed on net income rather than gross income by making a Section 871(d) election.
• FIRPTA withholding when selling – When a foreign owner sells U.S. property, the buyer must withhold 15 % of the sale price and send it to the IRS under the FIRPTA rules (10 % if the price is below US$1 million and used as a residence; no withholding under US$300k). See LINK » FIRPTA withholding | Internal Revenue Service – IRS.GOV

8 Mortgages for Non‑Residents & Newcomers

• Foreign national loans – Some U.S. banks and mortgage brokers offer loans specifically for foreign nationals. Expect 30 %–40 % down payments, higher interest rates and additional documentation (overseas bank statements, letters of credit and income verification).
• U.S. credit history – Establishing or improving your U.S. credit score can help you qualify for better rates. Open a U.S. credit card and pay on time to build history.
• Alternative financing – Consider private lenders, seller financing or paying cash. Many foreign buyers opt for cash purchases to avoid financing hurdles.
• Working with a mortgage broker – Brokers can shop multiple lenders and find programmes for international clients. Compare rates, fees and loan terms.

9 Residency & Visa Considerations

• No automatic residency – Buying U.S. property does not grant you residency or citizenship. You can visit the U.S. for up to six months per year on a B‑2 tourist visa (See LINK: » US Embassy – how to apply for a U.S tourism visa – US Embassy or under the Visa Waiver Program (ESTA) (See LINK: » Official ESTA Application Website if you are from a qualifying country.
• Investor visas – The EB‑5 visa allows permanent residency for those who invest at least US$800,000 (in a targeted employment area) or US$1.05 million and create at least 10 jobs. E‑2 treaty investor visas allow temporary residency for citizens of treaty countries who invest substantially in a U.S. business, but purchasing residential property alone does not qualify. See LINK » USCIS EB‑5 investor program.
• Tax residency rules – Spending more than 183 days per year in the U.S. may trigger tax residency. Consult a tax advisor about the substantial presence test.
• Estate tax planning – Non‑resident aliens have a US$60,000 estate tax exemption on U.S. assets, whereas U.S. citizens enjoy much higher exemptions. Consider holding property via a U.S. corporation or trust and seek professional advice.

10 Short‑Term Rentals & Local Regulations

• Short‑term rental rules vary by city. Many municipalities (e.g., New York City, Los Angeles, San Francisco, Miami) require hosts to register, collect occupancy taxes and restrict rentals to your primary residence. Some cities cap the number of rental days per year or prohibit short‑term rentals altogether. Always check local ordinances before listing on Airbnb or VRBO.
• Hotel occupancy or tourist taxes (often 10–15%) apply on nightly stays and must be collected and remitted to the city or county.
• HOAs may ban or limit short‑term rentals even if city laws allow them. Review bylaws carefully.

11 Common Pitfalls & Tips for a Safe Purchase

• Failing to include contingencies – Always include inspection, appraisal and financing contingencies to protect your deposit.
• Underestimating closing costs & property taxes – Budget 2–5% of the purchase price for closing costs and research annual property taxes in your area.
• Skipping title insurance – Title insurance protects against hidden liens or ownership disputes; don’t skimp on it.
• Ignoring FIRPTA & tax obligations – Understand federal and state tax withholding when selling as a non‑resident.
• Assuming ownership grants residency – Property ownership alone does not provide immigration benefits; explore appropriate visa options.
• Not consulting experts – Work with experienced realtors, attorneys, tax advisors and lenders who understand foreign buyers’ needs.

12 Frequently Asked Questions (FAQ)

Can a non‑resident buy property in the U.S.? Yes. There are no legal restrictions on foreign ownership of U.S. real estate. You need an ITIN, proof of funds and, if financing, a mortgage pre‑approval.

How much earnest money is typical? Earnest money deposits are usually between 1% and 3% of the purchase price and are held in escrow.

What happens to the earnest money? It is credited toward your down payment or closing costs at closing. If you back out for reasons covered by contingencies (inspection, appraisal, financing), the deposit is refunded. Without contingencies, you risk losing your deposit.

What taxes will I pay? Property taxes vary by state. Rental income is taxed at federal and state levels, but you can deduct expenses if you elect to treat it as effectively connected income. When selling, non‑resident sellers are subject to FIRPTA withholding.

Does buying a home provide U.S. residency? No. Property ownership does not grant immigration status. To live in the U.S., you need an appropriate visa such as the EB‑5, E‑2, or a non‑immigrant visa (H‑1B, L‑1, etc.).

How long does the process take? Once you have financing and an accepted offer, closing typically takes 30–60 days for existing homes. Pre‑construction purchases may take months or years, depending on the construction.

13 Top US Banks for Foreign Buyers

14 Summing it all up…

Buying property in the United States is a well‑regulated process open to citizens and non‑citizens alike. Success depends on careful planning: secure financing or gather cash, engage qualified professionals, conduct thorough due diligence and understand the legal and tax implications. While no visa or special permit is required for ownership, you must comply with federal and state tax rules and cannot assume residency rights. Follow the steps in this guide, consult the linked official resources and you’ll be on your way to owning a piece of America.