Navigating Challenges: Why Some International Investors Don’t Buy U.S. Real Estate (and How to Overcome Them)

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The U.S. real estate market is undeniably attractive to international investors, drawing $56 billion in foreign capital over the past year. However, not every international inquiry translates into a successful purchase. Understanding the reasons why some foreign clients ultimately do not buy U.S. property offers crucial insights. For property investors and real estate professionals, identifying these roadblocks is the first step toward overcoming them and unlocking more opportunities. Let’s delve into the common hurdles and strategies to navigate them.

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The Roadblocks: Top Reasons for Non-Purchase

The National Association of Realtors® 2025 International Transactions in U.S. Residential Real Estate report sheds light on why some international clients, despite their initial interest, do not end up purchasing property in the U.S. Understanding these challenges is key to refining strategies and improving success rates.

Finding the Right Fit: Property Needs and Market Access

The most common reason for non-purchase (28%) is simply that clients “found no property that met their needs.” This isn’t just about inventory; it’s about matching specific, often unique, international buyer requirements with available properties. Many international investors seek particular types of properties, in specific locations, with certain investment returns or lifestyle benefits. A disconnect here can quickly derail a potential purchase. This highlights the need for agents who excel at sourcing properties that meet the specific needs of international buyers.

In my own day-to-day, I’m finding that international buyers first come to us with an idea in mind – like Florida or Texas. More often than not, that’s tied to the idea of some kind of potential personal use of the property at some point. The reality is that the best long-term investment opportunities are often found in the less glamorous secondary markets.

We’ve done a lot of deals in the suburbs of Cleveland for example. That’s where we’re finding great cashflow, affordable house prices, and all the demographic and socio-economic data that supports long-term equity growth. All that said, those initial lifestyle tendencies can be hard to shake, and I’ve seen plenty of buyers fail to move forward with a purchase because they can’t find that sweet spot of personal taste vs investment potential in the markets they like personally.

Related: The Best U.S. Real Estate Markets for Foreigners Seeking Cashflow and Equity Growth in 2025

The Expertise Gap: The Role of International REALTORS®

A significant 15% of international clients couldn’t buy because they “couldn’t find an agent with international expertise.” This statistic speaks volumes. The complexities of international transactions – from visa status and tax implications to cultural differences in negotiation and communication styles – demand specialized knowledge.

An agent well-versed in international real estate can bridge these gaps, offering invaluable guidance and building trust. Without this specialized expertise, clients can feel lost, leading them to abandon their search. This emphasizes the need for real estate professionals to invest in training and certifications like NAR’s CIPS (Certified International Property Specialist) designation.

Related: How to Structure Your U.S. Property Investment for Maximum Tax Efficiency and Liability Protection

Financing and Process Clarity: Demystifying the U.S. System

Challenges with “obtaining a U.S. mortgage” (12%) and “understanding the buying process” (11%) are intertwined. For non-residents, securing a U.S. mortgage can be complicated due to different credit scoring systems and documentation requirements. Likewise, the U.S. home-buying process, with its contracts, disclosures, and legal nuances, can be daunting for someone accustomed to a different system. Clear, patient, and detailed explanations from agents, coupled with access to international mortgage specialists, are crucial for demystifying these aspects and guiding clients confidently through each step.

Related: Foreign National Mortgages: Your Essential 2025 Guide for Non-Residents

Overcoming Logistical and Financial Hurdles

Several other logistical and financial barriers also emerge:

• Fund Transfers and Currency Exchange: “Couldn’t transfer funds” (10%) and “lost money in foreign currency exchange” (8%) highlight the need for secure, efficient, and cost-effective international money transfer solutions. Partnering with currency exchange specialists can help minimize losses due to unfavourable rates.

• Travel and Tax IDs: “Couldn’t travel to the U.S. to see property” (6%) emphasizes the importance of virtual tours, detailed property videos, and trusted local representation. “Couldn’t obtain a U.S. tax ID number” (3%) points to the need for legal assistance to navigate IRS requirements, such as obtaining an Individual Taxpayer Identification Number (ITIN), or Employer Identification Number (EIN), which is often necessary for property transactions and tax filings.

Related: Complete Guide to U.S. Taxes for Foreign National and Non-Resident Real Estate Investors

Insights for Success: Turning Challenges into Opportunities

Understanding these reasons for non-purchase empowers real estate investors to prepare properly and set realistic expectations. By working with an experienced professional advisor or buyer representative, overseas buyers can formulate a realistic plan, and identify properties and financing options that align with their investing goals. As Lawrence Yun, NAR Chief Economist, often points out, the U.S. market’s “strong protection of private property rights” is a fundamental draw for global investors. By ensuring smooth processes and expert guidance, we can help more international investors realize the potential of U.S. real estate.

Previous Article: The Factors Driving Foreign Investment in U.S. Real Estate

Frequently Asked Questions (FAQs)

What is the primary reason international clients do not purchase U.S. property?

The leading reason (28%) international clients do not purchase U.S. property is that they cannot find a property that meets their needs. This highlights the importance of precise client needs assessment and the availability of diverse inventory tailored to international investor preferences.

How important is finding an agent with international expertise for foreign buyers?

Finding an agent with international expertise is crucial, as 15% of international clients cited not being able to find such an agent as a reason for not purchasing. These specialized agents understand the unique challenges of international transactions, including cultural nuances, legal complexities, and specific financial requirements, making them indispensable guides for foreign buyers.

What challenges do international clients face with U.S. mortgages and the buying process?

International clients often face challenges with obtaining U.S. mortgages (12%) and understanding the buying process (11%). U.S. financing can be complex for non-residents due to different credit systems and documentation requirements, while the overall buying process can be daunting without clear guidance on legal procedures, contracts, and local market practices.

How can international investors overcome logistical issues like fund transfers or travel restrictions?

Logistical issues like fund transfers (10%), lost money in foreign currency exchange (8%), and inability to travel (6%) can be overcome with strategic planning. Utilizing reputable international money transfer services, engaging currency exchange specialists, exploring remote viewing options, and working with legal experts for tax ID acquisition can significantly smooth the process for international buyers.