Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Buying a house - anything to be wary of

Buying a house - anything to be wary of

Old Apr 21st 2017, 2:09 am
  #1  
Forum Regular
Thread Starter
 
Joined: Nov 2016
Location: Knoxville, TN
Posts: 189
Chesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond repute
Default Buying a house - anything to be wary of

Apologies if this is just a dumb question but I'd like to tap into your wisdom.

Recap: moved to TN in Feb. 2 young kids below school age. H1b/ H4 visas til Jan 29 2020, green card sponsorship on the cards.
Home rented out in UK.

We're in a relatively cheap area for property ownership whereas renting feels high (all relative. I've seen what eye-watering amounts some of you pay).

I have money from an inheritance so we can put a 20% deposit down and we've been pre approved for a product by the credit union my husband banks with. We're intending to buy ASAP.

In a nutshell, are there pitfalls/ unintended consequences (primarily tax) we should consider? Any reason this would be a bad strategy?

We're not planning to sell either home in the foreseeable. I imagine my future is in the UK (a green card might alter that). If we were to sell anything, it would be the US property (assuming we do buy one) but our idea currently would be to rent it out if we returned home.

Finally, are we likely to encounter difficulties in finalising the mortgage (does pre-approval count for much?)
Chesten is offline  
Old Apr 21st 2017, 12:13 pm
  #2  
BE Enthusiast
 
Joined: Jun 2015
Location: Near Lynchburg Tennessee, home of Jack Daniels
Posts: 715
ddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond reputeddsrph has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Originally Posted by Chesten View Post
Apologies if this is just a dumb question but I'd like to tap into your wisdom.

Recap: moved to TN in Feb. 2 young kids below school age. H1b/ H4 visas til Jan 29 2020, green card sponsorship on the cards.
Home rented out in UK.

We're in a relatively cheap area for property ownership whereas renting feels high (all relative. I've seen what eye-watering amounts some of you pay).

I have money from an inheritance so we can put a 20% deposit down and we've been pre approved for a product by the credit union my husband banks with. We're intending to buy ASAP.

In a nutshell, are there pitfalls/ unintended consequences (primarily tax) we should consider? Any reason this would be a bad strategy?

We're not planning to sell either home in the foreseeable. I imagine my future is in the UK (a green card might alter that). If we were to sell anything, it would be the US property (assuming we do buy one) but our idea currently would be to rent it out if we returned home.

Finally, are we likely to encounter difficulties in finalising the mortgage (does pre-approval count for much?)

I live in Tennessee, Tullahoma, about 140 miles to your west. I have been building a new house over the past
Two years and listed our old house to sell last week, hoping to sell in a couple months. We had three offers in
two days, sold for 10k over asking price. The rapid growth in Nashville, and towns nearby are pushing people down our way which is 60 miles south of Nashville. If your market in Knoxville area is also competitive having
A pre-approval for loan will mean you can move fast and have your offer approved over others with possible
mortgage issues.
I would take time to really look around area before buying and buy something you could be happy living in for many years if you decide to stay. Working in Oak Ridge gives a wide area to commute from, meaning you don't
Have to live that close to Knoxville. As far as taxes, property tax in Tennessee is fairly low. If you live in the house for three years and then sell you don't have to pay any capital gains unless the house is over a certain value.
Overall how has Tennessee been working out for you?
ddsrph is offline  
Old Apr 21st 2017, 12:18 pm
  #3  
SUPER MODERATOR
 
Jerseygirl's Avatar
 
Joined: Dec 2005
Posts: 82,116
Jerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond reputeJerseygirl has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Originally Posted by Chesten View Post
Apologies if this is just a dumb question but I'd like to tap into your wisdom.

Recap: moved to TN in Feb. 2 young kids below school age. H1b/ H4 visas til Jan 29 2020, green card sponsorship on the cards.
Home rented out in UK.

We're in a relatively cheap area for property ownership whereas renting feels high (all relative. I've seen what eye-watering amounts some of you pay).

I have money from an inheritance so we can put a 20% deposit down and we've been pre approved for a product by the credit union my husband banks with. We're intending to buy ASAP.

In a nutshell, are there pitfalls/ unintended consequences (primarily tax) we should consider? Any reason this would be a bad strategy?

We're not planning to sell either home in the foreseeable. I imagine my future is in the UK (a green card might alter that). If we were to sell anything, it would be the US property (assuming we do buy one) but our idea currently would be to rent it out if we returned home.

Finally, are we likely to encounter difficulties in finalising the mortgage (does pre-approval count for much?)

We usually advise people not to buy until you become a permanent resident. Until then your stay in the US is temporary and several of our members have run into problems and have had to leave the US PDQ. Problems such as losing their job, problems getting their visas renewed etc.

Selling a home is expensive...realtors fees often in the region of 6%. Houses are generally more expensive to maintain than the brick built houses in the U.K.

Just to add...we had one member who was in the processing of renewing their visas. US Immigration made an error and the visa hadn't been renewed before the original one had expired. There was no leeway...they had to leave the US even though it was immigration's fault. The family are happily living back in the UK.

Last edited by Jerseygirl; Apr 21st 2017 at 1:42 pm.
Jerseygirl is offline  
Old Apr 21st 2017, 12:49 pm
  #4  
Concierge
 
Rete's Avatar
 
Joined: Apr 2001
Posts: 43,729
Rete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

I would have to side with JG on this. With a visa that only allows you until 2020 to be in the US, you would not recoup the monies spent on buying a home in the US if you have to sell sooner than 5 years from purchase date. That's appear to be the general rule. As for renting, it is not only a matter of finding reliable and responsible tenants but the maintenance of the home and grounds and the fee to the realtors or manager who will oversee collection of rents, repair of property, grounds keeping, etc. that will eat you alive.

Does your current employer anticipate filing for green cards for the you and the family? If not, then you have no basis for staying in the US. I hate to say this but with the current political climate regarding H1-B visas and the like, I would not feel secure even lasting out the current timeline of your visa.
Rete is online now  
Old Apr 21st 2017, 1:00 pm
  #5  
BE Forum Addict
 
tom169's Avatar
 
Joined: Mar 2015
Location: NC, USA (ex Yorkshire)
Posts: 4,018
tom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

When attaining a mortgage there are two types of letters - pre approval and pre qualification.

Make sure you get pre-approved. In a fast moving market this holds more weight as it usually means a more thorough look into your background.

I'm not even sure you will qualify for a mortgage to be underwritten. As I don't have a green card yet (awaiting AOS) I had to provide a copy of my NOA and also a signed affidavit stating that I am intending to reside in the USA for the lifetime of the loan.

As a first time home buyer there was some expenses I didn't know too much about up front. This is where you need a decent amount of liquid cash in addition to the down payment:

- Due diligence money (we gave the seller $500)
- Earnest Money (about 1%)
- Home inspection
- HVAC inspection
- Structural engineer
- Termite inspection
- Radon inspection
- Attorney fees

It all adds up.
tom169 is offline  
Old Apr 21st 2017, 1:06 pm
  #6  
 
Nutek's Avatar
 
Joined: Apr 2012
Location: CT
Posts: 30,146
Nutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond reputeNutek has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Zero chance I would purchase a house without that green card firmly in hand.
Nutek is online now  
Old Apr 21st 2017, 1:35 pm
  #7  
BE Forum Addict
 
Joined: Aug 2013
Location: Athens GA
Posts: 1,911
MidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond reputeMidAtlantic has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

I go along with others in saying that I would not purchase until I had the green card.
MidAtlantic is offline  
Old Apr 21st 2017, 1:57 pm
  #8  
Forum Regular
Thread Starter
 
Joined: Nov 2016
Location: Knoxville, TN
Posts: 189
Chesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Thank you everyone. Some very sobering food for thought which I'll share with my husband.
Chesten is offline  
Old Apr 21st 2017, 2:00 pm
  #9  
Austin. TX.
 
petitefrancaise's Avatar
 
Joined: Sep 2013
Posts: 5,585
petitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond reputepetitefrancaise has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Another vote for waiting until the green card arrives.
petitefrancaise is offline  
Old Apr 21st 2017, 2:10 pm
  #10  
Forum Regular
Thread Starter
 
Joined: Nov 2016
Location: Knoxville, TN
Posts: 189
Chesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond reputeChesten has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Originally Posted by ddsrph View Post
Overall how has Tennessee been working out for you?
Hey thanks for asking. I'm liking it more than I expected - had a major wobble before we moved. It's v pretty, spring is just lovely. People are chattier than I'm used to. I'm finding them friendly and helpful rather than overbearing.

I'm having a hard time with food when eating out (I'm veggie, but also the prevailing palate seems WAY sweeter than I'm used to). So eating out not really a pleasure for me. I miss Bistro types. Early days anyway.

We're not church goers but no one has commented on that!

The erratic weather is interesting.

My biggest adjustment is a state of mind with regards H4. Hope green card is forthcoming and not recruitment hot air.
Chesten is offline  
Old Apr 21st 2017, 3:05 pm
  #11  
Lt Col (Retd)
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 47,705
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

I would not rent out a home that I couldn't drive to/ visit within a reasonable time i.e. in an hour or so, or in an evening after work. I wouldn't rent out a home in another state, unless it was close by, and certainly not in another country. I happily sold our home in London when we left the UK.

Also, bear in mind that US homes take a lot of repairs and maintenance, so if you're regularly paying a plumber, electrician, or handyman to fix things, not to mention painting between tenants and a new roof and AC system every 15-20 years, you won't make much money from renting, and house prices in cheaper markets like Tennessee don't increase much in value either.

Last edited by Pulaski; Apr 21st 2017 at 4:18 pm.
Pulaski is online now  
Old Apr 21st 2017, 4:00 pm
  #12  
Lost in BE Cyberspace
 
Joined: Jan 2006
Location: San Francisco
Posts: 10,158
Giantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond reputeGiantaxe has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Originally Posted by Nutek View Post
Zero chance I would purchase a house without that green card firmly in hand.
I bought before I even arrived in the country. But that was way back when when the financial and political environment was very different from today's. It worked out for me, but if I were doing it now there is no way I would buy before I had a green card.
Giantaxe is offline  
Old Apr 21st 2017, 6:24 pm
  #13  
Concierge
 
Rete's Avatar
 
Joined: Apr 2001
Posts: 43,729
Rete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond reputeRete has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Originally Posted by tom169 View Post
When attaining a mortgage there are two types of letters - pre approval and pre qualification.

Make sure you get pre-approved. In a fast moving market this holds more weight as it usually means a more thorough look into your background.

I'm not even sure you will qualify for a mortgage to be underwritten. As I don't have a green card yet (awaiting AOS) I had to provide a copy of my NOA and also a signed affidavit stating that I am intending to reside in the USA for the lifetime of the loan.

As a first time home buyer there was some expenses I didn't know too much about up front. This is where you need a decent amount of liquid cash in addition to the down payment:

- Due diligence money (we gave the seller $500)
- Earnest Money (about 1%)
- Home inspection
- HVAC inspection
- Structural engineer
- Termite inspection
- Radon inspection
- Attorney fees

It all adds up.
Bought our house 4 years ago here in Mississippi:

- Due diligence money (we gave the seller $500) - Whatever for? We didn't.
- Earnest Money (about 1%) What for? We didn't.
- Home inspection Yes
- HVAC inspection No. This is part of the home inspection
- Structural engineer Nope. Part of home inspection
- Termite inspection Again, part of home inspection
- Radon inspection Not necessary in this state.
- Attorney fees Got soaked for that
Rete is online now  
Old Apr 21st 2017, 6:39 pm
  #14  
BE Forum Addict
 
tom169's Avatar
 
Joined: Mar 2015
Location: NC, USA (ex Yorkshire)
Posts: 4,018
tom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond reputetom169 has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Originally Posted by Rete View Post
Bought our house 4 years ago here in Mississippi:

- Due diligence money (we gave the seller $500) - Whatever for? We didn't.
- Earnest Money (about 1%) What for? We didn't.
- Home inspection Yes
- HVAC inspection No. This is part of the home inspection
- Structural engineer Nope. Part of home inspection
- Termite inspection Again, part of home inspection
- Radon inspection Not necessary in this state.
- Attorney fees Got soaked for that
Perhaps these customs are NC specific?

Due diligence money is given to the seller in return for taking the house off the market whilst you perform due diligence (e.g. the inspections).

HVAC inspection in our case was required as there were issues with the HVAC system and the general inspector cannot provide a quote etc to fix it.

Structural engineer and foundation inspection isn't required, but it's certainly good to have done. The general home inspection won't check beyond the surface for any issues.

Termite and radon inspection (purchased together) here are done by a specialist company too.
tom169 is offline  
Old Apr 21st 2017, 7:01 pm
  #15  
Lt Col (Retd)
 
Pulaski's Avatar
 
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 47,705
Pulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond reputePulaski has a reputation beyond repute
Default Re: Buying a house - anything to be wary of

Originally Posted by Rete View Post
- Due diligence money (we gave the s- Earnest Money (about 1%) What for? We didn't. ....
You do it in a competitive market to show commitment to the purchase. Obviously it would be different if you live where nobody else wants to!
Pulaski is online now  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.