NEWS: Canadians become top out-of-state homebuyers in Arizona

 

Purchasing Real Estate | Mortgage Loans & Canadian & US Banks | Foreign Investment in Real Property Tax Act (FIRPTA) |

 | Owning U.S. Property the "Canadian Way" |

 

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*Richard Bazinet PLLC is a member and founding director of the Canada Arizona Business Council*

 

Canadians are the largest single foreign investor in Arizona. More than 300,000 Canadians live Arizona either full-time, part-time, retired or as second or vacation home owners. And every year, Canadians have been purchasing real estate in Arizona like clockwork.

 

Helping Canadians purchase their Arizona real estate is one of our specialties. And I speak Canadian. And speak both official languages, even if you are from Vancouver, Calgary, Winnipeg or from Montreal or Quebec City. We can translate for you the differences in Canadianism vs. Americanism as well as how a real estate transaction can vary.

 

 

Canadians moving to Arizona should know that purchasing real estate in Arizona may differ from their previous experience about purchasing real estate in Canada. Particularly concerning matters about obtaining a loan from a "mortgage broker", to defining ownership known as acquiring "title", the "escrow" process, the roles and responsibilities of a professional Realtor® like me, and then how different types of deeds are used. For example, points, origination and documentation fees, closing costs, and the 'escrow' process are the norm while these are somewhat foreign to Canadians. And unless you pay all in cash, you must pre-qualify for a loan before you purchase real estate. And often, your purchase offer on a property may be outright rejected by the seller unless you prove the existence of your pre-qualified loan and/or cash, and an "earnest money" deposit - another foreign concept to most Canadians.

 

Don't worry by any of it. We take care of the entire process, step-by-step for you.

 

Mortgage Loans to Canadians

 

Can your Canadian bank fund the purchase of a property in Arizona? Absolutely. We have processed many transactions coordinating with your favorite Canadian bank.

 

Can you obtain a mortgage loan from a U.S. bank or mortgage broker? Absolutely. We can connect you with mortgage lenders that have programs and cater specifically to Canadians purchasing their Arizona real estate.

 

Did you know that mortgage loan interest is calculated differently in Arizona than it is in Canada? In Canada, compound interest is calculated at the beginning of the period, whereas in the USA, it is calculated at the end of the period and it's based on a simple loan calculation rather than compound interest.

 

Real Estate sold by non-resident alien (an alien is not a being from another planet, it's someone other than a US Citizen)

 

The Foreign Investment in Real Property Tax Act (FIRPTA) generally requires the withholding of 10% of the sales proceeds on the sale of any real property by a non-resident alien. At the closing, the 10% of the sales proceed are forwarded to the Internal Revenue Service. Upon the filing of a tax return by the non-resident alien, the non-resident may be entitled to a tax refund of part of all of the 10% sales proceeds.

 

One EXCEPTION to the 10% withholding requirement of the FIRPTA is the sale of the home of a non-resident meeting two requirements: 1) sales price of less than $300,000, and 2) the buyer using the home as a principal residence. For example, this would apply in particular to a seller being a non-resident alien who owns an investment property in Arizona.

 

If you want to learn more about FIRPTA and how it may apply to you, please visit: http://www.aaronline.com/documents/firpta.aspx. If you would rather discuss it with a competent professional, please call me or send me an email and I'd be delighted to connect you with the right people.

 

 

Owning U.S. Property the "Canadian Way"

 

I'm often asked, "Is purchasing property in Arizona different that in Canada?". As you read above, in the real estate process, the answer is "yes". But in other areas as well in matters related to probate and financial planning. If this something you would like to explore, we'd be happy to assist you by connecting you with the right competent people.