An interesting question was posed (and subsequently removed) recently on Trulia Voices a real estate “Q&A forum” by a Canadian regarding what to look for in a Phoenix real estate agent:
What credentials should I be looking for in an agent to assist a Canadian make a purchase ….is there a true buyers agent for Canadians ?
I am not aware of any agent that solely serves Canadian clients though that would be an interesting niche market. With the large influx of Canadian buyers into the Phoenix market, most real estate agents that have been around for a while will have worked with Canadian buyers. Apart from asking “What is my Toronto home worth?”, you should ask any potential agent you are interviewing what their experience is in working with Canadian home buyers. While the real estate transaction is basically the same whether the buyer is a U.S. or Canadian citizen, there are certain things that Canadian buyers need to be aware of when they are considering purchasing property in Phoenix (or anywhere in the United States).
Financing: A significant portion of our Canadian clients are cash buyers. But not everyone has the resources to plunk down tens to hundreds of thousands of dollars in cold hard cash. Financing can be tricky for “foreign nationals”. With the general tightening of the U.S. credit markets, not every lender has mortgage products for our neighbors to the north. Some however, still do. Typically they require larger down payments and the rates, while still very good, may not be as low as you’ll see advertised to U.S. Citizens. Financing through a Canadian bank is also an option. There articles here and here that have more information on how Canadians can get a mortgage in the U.S.
Foreign Currency Brokers: Even if you plan to finance your home purchase, you will be making a down payment and paying various closing costs. As such, even small fluctuations in the Loonie/Dollar exchange rate can have a significant impact on what you’ll be spending. We recommend exploring the services of a foreign currency broker. Here is an article on one that several of our Canadian clients have used. There are others.
FIRPTA (Foreign Investment Real Property Tax Act): While FIRPTA does not apply until you sell your U.S. property, you still need to be aware of and understand its implications when you buy. See Understanding FIRPTA for information.
Property Management: If you plan to rent out the property you purchase in the U.S. you need to understand the implications of property management, doing repairs yourself and other nuances particular to Canadian citizens. See this Q&A by David Ingram, a well known expert on Canadian tax and immigration law. It’s a complicated area, with potentially severe ramifications if you decide to work on property you intend to lease out.
These are some of the major areas Canadians considering purchasing U.S. property need to be aware of. Other things to be aware of are terminology and typical real estate practices that are different between the United States and Canada. We’ll save those for another post on another day. Suffice it to say that you need to work with a Phoenix real estate agent that understands the nuances of working with Canadian buyers. As always, we suggest interviewing three or four potential agents. Trust your instincts, ask LOTS of questions (including questions surrounding the four topics mentioned above) and you’ll find the right agent to help you.
Photo Credit: kennymatic on Flickr. CC License