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What do Canadians and other non-resident aliens need to bring with them and/or know when they buy real estate in the United States?
- Valid passport from country of origin
- Bank letter of credit from country of origin OR bring a letter from your bank showing you have funds up to the amount you wish to spend, in their bank, OR show lender approval from US lender.
- Documents showing all income from all sources, employer records and tax filing records.I don’t need to see these, but a seller may want to see some of them, or you may need to show them to the escrow company or US lender at some point.
- The only recognized method of transferring funds to escrow companies is by wire transfer. Ask your escrow company for wiring instructions and confirm these instructions with your own bank. NOTE: DO NOT USE DRAFTS, TRAVELLER’S CHECKS, OR CERTIFIED CHECKS AS THESE WILL SLOW DOWN THE CLOSING PROCESS AND MAY CAUSE A BREACH OF YOUR CONTRACT.
- For smaller amounts such as earnest money deposits, you may pay escrow with a local bank check, cash, or credit card. A credit card payment will be counted as debt when they figure out if you can afford the mortgage payments or not, so not usually a good idea. Some escrows will accept travellers’ checks, but not all. Don’t count on it.
- Wired funds MUST be in the account of the escrow company at least 3 days prior to closing.
- You do not have to be here in person to close. However, ALL documentation for escrow, including both lender and escrow documents must be in the hands of the escrow office at least one day prior to closing, with all signatures in place and notarized. PLEASE ALLOW SUFFICIENT TIME FOR RECEIPT OF DOCUMENTS, NOTORIZATION, AND SUBSEQUENT RETURN OF DOCS TO ESCROW to arrive at least one full day before closing. Three days is better.
- If you decide to pay cash for your home here, you will avoid many extra charges at closing. You will have to show ahead of time, a credit to your escrow account, or a bank letter of credit.
- It is a good idea to have a local bank account, and then transfer the money to it by wire. You will need a local account in order to be able to set up utility accounts, as well.
- You will not receive keys and closing documents till the escrow has determined that all docs are in good order. Then escrow must return docs to the lender, then lender will release mortgage money to the escrow for disbursement. THEN AND ONLY THEN, THE ESCROW SENDS A RUNNER TO THE STATE RECORDING OFFICE, and the deed is duly recorded. The transaction is not considered completed and keys are not handed over till Mary receives word that the deal is recorded.
- You can ask for Mary’s list of suppliers and workers if you need anything done to your house. If what you need is not on the list, Mary can solicit names from trusted sources for you. The seller of your home will often leave you a list of suppliers and repair persons you can use.
- You are responsible for ensuring that your new home is insured, and the utilities are turned on, on the day of closing. Please allow plenty of time for this to be scheduled. You will need to find out what, if anything, the HOA pays in insurance. Some pay for roof and outside coverage, some don’t.
- You will be sent a large package of information from escrow, including your HOA (Homeowners’ Association) documents. Please familiarize yourself with the rules of the association. You will also receive a pre-audit, and title insurance commitment. Please read them. I receive all this information too, and if you or I see anything that bothers us, or if we have questions, I will get answers.
- You are advised to re-key your new home as soon as possible, as many different people could have keys, such as cleaners, renters, realtors, and various inspectors, workers etc.
- Please arrange for pool care, pest control, yard care, etc. Mary or the seller of your home can assist you in locating reputable workers.
- If you are a seasonal visitor, please arrange for someone to look in on your place in your absence, to check for leaks, bugs or other problems. When you leave for the summer, DO NOT TURN OFF UTILITIES. It can harm duct work, piping, toilets, pools, etc. The extreme heat can damage wood, veneers, ceiling tiles, paint, drywall. Leave your a/c on the highest setting, and have someone flush toilets and turn on the dishwasher and taps once every 2 weeks. If you leave condiments, sugar, cereal, flour, etc. in the home, I suggest putting them in the fridge for the summer, to discourage pests.
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Reading list for Canadians planning on spending time in the US
The Canadian Snowbird in America – Professional Tax and financial Insights into Temporary Lifestyles in the US by Terry Ritchie and Brian Wruk (Brian is from Edmonton) ISBN978-1-55022-804-5 Published by ECW Press, 2120 Queen St. East, Ste 200, Toronto M4E 1E2
The Canadian in America—Real Life Tax and financial Insights into Moving and Living in the US by Brian Wruk and Terry Ritchie ISBN 978-1-55022-757-4 Also published as above
Border Guide by Robert Keats (Bob is from Winnipeg) –A Canadian’s Guide to Investment, Immigration, Tax, and Retirement Planning in the US. ISBN 1-895654-11-4 The one I have is the edition revised in 1997, but I know there is a newer version. To order call toll free 1800-993-OMPC (6672)
Contact List for Canadians
Alan Hutchinson CA, CPA (from Medicine Hat) 602-953-6996 for tax advice on both sides of the border
Marshall Whitehead Immigration Lawyer 602-234-0782 for immigration issues, work visas etc.
Canadian Snowbird Association – I am told they have the best rates for medical insurance and lots of info for snowbirds www.snowbirds.org
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