With the rise of investment immigration, more and more Chinese people are immigrating to the United States through investment. To better assist investors in integrating into American society, WorldWay Immigration provides high-quality follow-up services and rich information about immigrant life, helping new immigrants shorten their integration time into American society, and delving into various details of life in the services offered.
The United States is a country governed by law, with relatively complete laws and regulations. The U.S. is also a private ownership society, where property rights are clearly defined; once purchased, the ownership of both the house and the land is obtained (of course, taxes must also be paid). After a century of continuous amendments and improvements, the relevant laws are clear and strict, industry standards are established, and operations are transparent.
The process of real estate transactions is relatively complex in the United States to comply with legal requirements and to protect the rights and interests of both parties involved in the transaction. Typically, about a dozen companies collaborate to provide services during a real estate transaction. This may sound daunting, but for both buyers and sellers, these professionals actually simplify the process significantly.
The main individuals that buyers and sellers directly interact with are their respective real estate agents, who are entrusted with their opinions and requirements, while the remaining matters are generally coordinated and handled by the real estate agents.
Below are the various roles involved in a real estate transaction in the United States:
1. Buyer’s Agent
2. Seller’s Agent
3. Attorney
4. Accountant
5. Home Inspector
6. Real Estate Appraiser
7. Lender and Loan Broker
8. Credit Reporting Agency
9. Title Company
10. Insurance Company
11. Government Inspector
12. Government Real Estate Registration
13. Homeowners Association
Buyer’s Agent
The buyer’s agent holds a real estate license issued by the state government. The responsibility of the buyer’s agent is to faithfully represent the buyer’s requirements, find properties, and coordinate various aspects of the transaction, including assisting in arranging all matters related to the purchase of real estate and negotiating or coordinating transaction matters with all parties involved. Typically, when the transaction is successfully completed, the buyer’s agent receives a commission from the seller.
Seller’s Agent
The seller’s agent holds a real estate license issued by the state government. Their duty is to faithfully represent the seller’s requirements, find buyers, and coordinate various aspects of the transaction, including arranging all matters related to the sale of real estate and negotiating or coordinating transaction matters with all parties involved. Generally, the seller primarily communicates directly with their own agent and does not directly interact with other individuals. Typically, when the transaction is successfully completed, the seller’s agent receives a commission from the sale proceeds.
Attorney
Attorneys may have three possible functions:
1. Before the real estate transaction, they help explain how to handle funds, accounts, and the most advantageous ownership structure. They also assist in setting up an escrow account for investor funds and the ownership entity. For investors interested in immigration, an immigration attorney should also be involved.
2. During the real estate transaction, they may be granted power of attorney by the buyer or seller to sign documents on their behalf when they cannot be present.
3. They assist in resolving disputes during or after the transaction.
Accountant
Accountants are responsible for tax consulting and providing tax filing services.
Home Inspector
Home inspectors hold a home inspection license issued by the state government. They are independent third parties hired by the buyer or required by the bank’s loan department. Their responsibility is to inspect whether the land and building facilities meet government-mandated usage standards and to recommend necessary specialized inspections, such as for the roof, foundation, soil, etc. Inspectors charge a service fee.
Real Estate Appraiser
Real estate appraisers hold a real estate appraisal license issued by the state government. They are independent third parties hired by the buyer or required by the bank’s loan department. They are responsible for providing professional real estate value reports. The value used by banks for loans is the lesser of the appraised value and the sale price. Due to the impact of the real estate loan crisis, the government has increased regulations on this industry to minimize the influence of parties involved in transactions on appraisers, thereby ensuring the objectivity of value assessments. Appraisers charge a service fee.
Lender and Loan Broker
Lenders and loan brokers are responsible for investigating the financial and credit status of applicants and providing home purchase loans to applicants.
Credit Reporting Agency
There are three major credit reporting agencies in the United States. They collect individuals’ borrowing and repayment credit records from credit card companies, bank loan departments, and other related companies or institutions, using different scoring models to assign scores. In the United States, people place great importance on these credit scores, as lending institutions use them to assess individuals’ willingness to repay debts, which also determines whether they can continue to borrow and the specific terms of the loans. Landlords also use these scores to assess potential tenants’ ability to pay rent. The cost of checking credit records is borne by the requesting party.
Title Company
Title companies are governed by national or state government departments and hold licenses issued for fund supervision, with their financial flows strictly regulated by the government. Additionally, title companies are required to pay a certain amount of surety (similar to bank reserves) to compensate clients in special circumstances. It can be said that title companies are the guardians of safety in U.S. real estate transactions.
The involvement of title companies resolves two important aspects of real estate transactions:
1. Whether the title is clear and marketable. If the title is forged, there are errors in title registration, or the property is occupied by others, the buyer will be embroiled in endless disputes.
2. Whether the transaction funds are secure. If a fraudulent agent runs away with the money, the buyer will suffer significant losses.
Insurance Company
Insurance companies provide fire and other accident insurance for real estate.
Typically, the cost of a title search is $200-300, while the premium for title insurance is 0.3-0.5% of the total value of the property, with the coverage generally equal to the total price of the property. The party responsible for paying this insurance cost is usually determined by local laws and traditions.
Government Inspector
If structural changes that do not comply with government records (such as adding a balcony or renovating a basement) are discovered during the sale of real estate, government inspectors will come to inspect and require the seller to either restore the original condition or obtain a "structural change" permit and subsequently check that the structural changes meet the required building standards.
Government Real Estate Registration
Government real estate registration is managed by third-party contracts and fund supervision or title investigation companies. The new owner will receive a deed in their name.
Homeowners Association of Planned Communities
This association is composed of all homeowners and regularly elects a management committee to establish standards for the appearance of homes in the community, such as the color and height of fences, and is responsible for hiring property management companies to maintain and manage the community's public areas. Homeowners in such communities are required to pay association fees.
Through the roles of various parties in U.S. real estate transactions, we can see how the rights of homeowners are protected. Therefore, due to the relatively sound legal regulations, buying a house in the United States is very safe.
