Buying a house in the US (agent, mortgage, mortgage, sales)

[Hachthor]

As a Canadian moving to the US, I am curious about the house buying aspect. I am going to rent initially but would probably buy in the next year or two. From what I gather, house buying is the US is much more involved than in Canada ie: down payments, closing costs etc etc
Obviously it differs state to state but what is the general steps to take? In Canada, you put a 5-10% down payment, you pay your own closing costs ( which are really only lawyer fees, deed stuff...generally around $4000 if that) and bamb....welcome home..

[farmermac]

I grew up and lived in Canada. I go back often, most of my family lives there and many friends also, many have bought houses.

My experience in Iowa Has been much much cheaper to buy property Beyond property price. There is no sales tax on homes. No land transfer tax. In 2006 we bought our house and the closing costs were $1200 or so. We have refinanced twice since then and the closing costs have never been above that. So we paid 180,000 for our house + 1200 at closing.

All my friends that have bought houses in Canada have had to pay sales tax just like on other purchases which seems ridiculous for such an expensive purchase.

That's in Ontario and Quebec.

There is also a lot more options for different types of loans in the US, and longer amortization periods. Every state will be different though.

[nikitakolata]

A lot of areas have transfer taxes, which are like sales taxes on a house. In the Chicago area every city has their own transfer tax rates (some don't charge transfer taxes though).

The complexity of the home buying process depends on the transaction. Generally, you agree to a price and sign a contract, give the seller earnest money (which goes toward your down payment), then inspect the property and agree to repairs, then the loan underwriting, then closing. The fees depend on the lender and the location.

A lot of deals are more complicated due to the buyers and sellers needs. For example, sometimes sellers lease their properties back from the buyers for awhile after the closing. Other times the sellers pay the buyers closing costs. If the property is a short sale then banks are involved. There are endless complications that can be added to a transaction, but it doesn't have to be complicated.

[Hachthor]

Thanks guys. What are the "usual" down payments? Is it 5, 10, 20%? Or does it depend on the state or lender?

[oregonwoodsmoke]

Each state is a little different. in the western states, paperwork is all handled by an escrow company. in the East, it is usual to have a real estate lawyer handle the paperwork.

You need a good real estate agent to walk you through it.

Down payment varies by what type of mortgage you are getting. But if you are a citizen of Canada and not working in the USA, I would suspect that you will be paying 20% down. 20% down is the most common mortgage.

[Hachthor]

Ok thanks, we will be living there/ working there when we buy but I guess we will just figure all this out when the time comes here's hoping we find a good estate agent!

[accufitgolf]

Hach

My advice is if one is moving into a new (unknown area) plus a new job, it is often wise to rent for a year to become familiar with the location and job before settling (purchasing) in.

[Musa O]

Have you considered lease option/rent to own as an alternative to buying a home?

[Hachthor]

Yea we're definitely renting for the first little while! I think when we leave Canada our credit is not recognized by banks down south so we need to build credit anyway.
We want to get a feel for the area before we start investing big bucks! haha