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Vietnamese find buying a home in the US daunting

By Lam Tra   April 20, 2022 | 04:30 am PT
Vietnamese find buying a home in the US daunting
Nguyen Hong Nhung's house in the U.S. Photo courtesy of the singer
For buying a home in the U.S., singer Nguyen Hong Nhung had to go through a mountain of paperwork.

Other singers Quach Thanh Danh and Duc Tien had to put someone else’s name on the title deeds and pay more than the market price.

Three years ago Danh was looking to buy a house in Austin, Texas in the U.S. He and his wife decided to settle in the U.S. when the children started primary school, and having a house is a prerequisite for a stable life, he said.

The criteria for selecting the house included proximity to schools and hospitals and a peaceful and comfortable living environment.

He searched for three months. While he did not have financial issues, he did have a lot of procedural issues.

He says: "We decided to buy a 1,000-square-meter property with a garden and a lot of amenities for around VND11 billion (US$481,000). Houses in Texas are less expensive than in other parts of the country, but taxes and fees are considerable".

He dislikes mortgages because of the enormous interest they might entail. Besides, he does not have a permanent job in the U.S., resulting in a low credit score.

"At the time my monthly income was insufficient to demonstrate my financial ability to purchase a home".

But despite having the cash, he was unable to buy a home without going through lengthy procedures for showing proof of origin of the money: for instance, it must have been in the bank for at least 60 days before being transferred.

Having trouble explaining the history of the $481,000 transferred from Vietnam to the U.S., he was forced to concede power of attorney to someone else and then transfer funds to the person in the form of real estate gift.

Thus, the process of preparing the documents, buying a home and switching names took several months. He is still tired when he thinks of the convoluted process, but pleased that the house's worth has climbed dramatically in just a few years.

In the U.S., the median home sales price was $346,900 in 2021, up 16.9 percent from 2020, and the highest on record going back to 1999, according to the National Association of Realtors. Home sales had the strongest year since 2006, with 6.12 million homes sold, up 8.5 percent from the year before.

Tien and his wife did not have enough money like Danh, so they bought a house in California and had to take out a mortgage.

Tien says: "We rented a house for a while and in early 2019 signed a deal to buy this house for VND16 billion. I believe the principal and interest are still less than the rental".

The monthly rent in California is $1,490 or more, he says.

The procedures for buying and selling a house in California are extremely elaborate because real estate is scarce and expensive, and prices are always rising, Tien explains.

Buying a house in the U.S. must be done through a brokerage, he says. He chose a highly reputed one to ensure a greater chance of success.

"There are several procedures and documents that people who are not familiar with the law may find difficult to complete. So Americans always use brokers."

To ease the monthly pressure from mortgage repayment, the couple have decided to pay over an extended period.

Besides the monthly installment, they also have to pay property tax each year of around 1.2 percent of the house's worth.

Pham Thanh Thao and her husband Truong Son, an overseas Vietnamese businessman, work in the construction industry and are adept at buying and selling homes.

They own many homes in Springfield, Massachusetts. Thao has assisted him in a number of property transactions since arriving in the U.S. in 2015.

She believes buying a home in that country is difficult, but things are safe and transparent as a result.

To save time, Thao hires a brokerage, specifies the size of the property and garden, number of rooms and so on, and the company's staff identify properties that match those specifications. She is shown the houses until she likes one, and she then negotiates the price and makes a deposit.

"Because my husband and I are both cautious, we consider a number of aspects before making a purchase" she says.

While the singer believes both mortgages and upfront payments have their advantages, she finds the former time-consuming because the bank will first examine the buyer's income to determine if they qualify.

"In the U.S., people have various debts ... such as auto payments, personal insurance, and company loans. The bank must be satisfied a person has the financial means to repay".

Housing prices in the U.S. vary by region, population density, development potential, planning, and utilities, she says.

In Springfield, where she and her husband live, they range from VND9-40 billion.

"Springfield is well developed in terms of education and security, and so real estate is expensive. But real estate in the city nearby is affordable".

Nguyen Hong Nhung, like Thao, has bought a number of houses.

She has bought two in Fountain Valley, California, and a small house in Texas since mid-2021. One of the houses in California is situated in the heart of a posh residential neighborhood and cost her VND31 billion.

She hired a brokerage, but had to sign stacks of papers that would have added up to the size of all the books a student studies in a year.

Between buying in California and Texas, the singer sees no difference in administrative procedures but thinks while California is a mature market and prices are steady, Texas has a lot of room for appreciation in future.

Several other Vietnamese celebrities like Nhat Tinh Anh, Dan Truong and Thuy Nga have also bought houses in the U.S.

Hong Ngoc, Kasim Hoang Vu and some others even have two to three houses in various states.

 
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