We extend a warm welcome to Canadian buyers and sellers. Canadianshave been buying and selling real estate in Palm Springs for years. We have helped many of your fellow countrymen with these transactions. A significant portion of our business is from Canadian buyers and sellers here in Palm Springs.
We have the experience you need, Canadian references & resources for you and have even traveled to Canada many times and might even know your hometown!
There are not too many things that will surprise you when purchasing real estate in The United States. Offers are very similar to Canadian ones and sellers will counter offer to try and reach a middle ground on the price. Once the price is agreed there is a bunch of paperwork that has to be signed.
Information For Canadian Buyers and Sellers of California Properties:
ESCROW: In California once a property has an accepted offer we "open escrow" with a neutral 3rd party escrow service. They are charged with safeguarding the monies put on deposit and making sure that all the paper work required to transfer the property legally and fully to you is completed.
Escrow usually eliminates the need for an attorney in the transaction. While you may always consult or use an attorney it is not typically necessary for a common real estate transaction handled by an escrow company.
Deposits: Most contracts will require a 3% earnest money deposit. This deposit will be held and credited to you at the close of escrow when the property transfers to you and the monies to the seller. You will need this money or a check payable in US Dollars for this amount when submitting your offer. Often times this check does not get cashed for a week to ten days but it is needed to submit most offers.
Inspection Period: This is the 17 day period from acceptance of your offer that gives you time to have the property physically inspected, line up financing - if needed - and review all documents pertaining to the property. It is always recommended that you have any property you are looking to buy fully inspected.
Notarized Signatures: A cash deal will not generally require you, as a buyer, to notarize anything. If you are doing a loan those documents will require a notarized signature by a US notary. Most people go to the US consulate closest to them. Those close to the border sometimes just drive across the border to a US notary. Escrow can help us locate a notary close to you. Sellers will have to sign grant deeds with a notarized signature. There is no other option.
Loans: Currently there are just a few lenders loaning to foreign nationals. Contact us for current sources. Typically you can expect to have to put down 30% and probably more like 35/ 40% Lending programs are always evolving and the situation can change.
Utilities: I will provide you with a list of the correct utilities. About a week before we "close escrow" you can call and have the utilities set up in your name. Just let the utility company know the approximate date of transfer. As always I can help you with specific questions as the need arises.
Costs for Buyers: The bulk of the costs in a real estate transaction are borne by the seller. Your major fee will be escrow. This fee starts about $500 for the smallest purchases and goes up incrementally with the size of the purchase. If you do a cash purchase at $500,000 your total fees should be right about $1,000. You are entitled to know your approximate fees before you agree to an escrow service provider. Getting a loan will increase your costs about 2 or 3 times that. Loan fees are set by the individual lenders. You are entitled to an estimated closing costs statement prior to signing for the loan. This document should detail the exact fees you are paying for obtaining the loan.
Insurance: If you are getting a loan you will be required to provide escrow proof of sufficient insurance to protect the asset the bank is loaning on. If you are paying cash you do not have this requirement but it is highly recommend that you insure the property prior to purchasing it.
Taxes: Luckily California has an extremely fair property tax system. Capped at 1% of the purchase price on an annual basis the taxes on your property will be billed in two installments and are due half in November and half in February. Water bond and school bond issues can get around the cap so we often calculate property taxes at 1.25% knowing that most people won't exceed about 1.12%. This is a disclosure that you will get during the purchase process.
Taxes For Sellers: As part of the sale process you will need to get a US taxpayer ID number to report your gain and remit your tax liability on the sale of your property in California. Although tax laws are frequently changed you may roughly estimate a 10% or less tax on the difference between what you paid for the property and what you sell it for. Escrow is currently required to withhold 3.3% for the state at the close of escrow, unless you declare a loss on the property. As a property owner be sure to track any capital improvement you make to the property to potentiallyoffset some of your tax liability. I can also direct you to a great tax person to help you with your specific questions.
Costs for Sellers: In selling a property you will have multiple costs of sale. Roughly you are looking at 7% total cost to sell exclusive of taxes or any community fees. The 7% consists of escrow, title and real estate commissions as well as recording fees.