in trouble, Lauster says. “Since most foreign buyers
are buying in the United States for the first time, their
only frame of reference for doing business is whatever
they have experienced in their own country,” he says.
To meet the unique circumstances clients face as
they move from another country, Antoniou’s brokerage offers a concierge service, finding everything from
childcare to contractors for clients. She once found a
justice of the peace for an impromptu wedding.
International buyers almost always shop online
first, and they’ll sometimes buy without seeing the
house first, say Antoniou. Her Sotheby’s Web site
is translated into 20 languages and allows buyers to
search by lifestyle. Online, “that house needs to rock
and roll,” she says. “If they don’t like the pictures and
they’re thousands of miles away, they’re not going to
come see it.” Photos are so important that Antoniou
has a staff videographer and photographer.
The World’s Most Transparent Process
Fragile economic recovery notwithstanding, the
United States still provides the most stable and secure real estate investment environment in the world,
ranked higher than that of Germany, Canada, France,
Australia, and the U.K., according to research by the
Association for Foreign Investors in Real Estate. The
political system is well-organized and reliable, and the
real estate system is one of the most transparent.
“Without a doubt, we are the safest environment to
purchase a property and ensure you own it. It’s recorded at the courthouse and your ownership is protected,”
says Tony Macaluso of Palm Beach Gardens, Fla., who
has been a CIPS instructor for 15 years. Macaluso and his
wife Nancy, broker-owners of Portside Properties Inc.,
estimate that 30 percent of their business in the fourth
quarter of 2012 was from international clients.
Favorable exchange rates against the dollar have
enabled bargain-hungry foreign buyers to get a lot
more home for the money. “Compared to Europe
where the average apartment is 700 square feet, our
properties are twice the size, and often for half the
price,” Macaluso says. Miami had 23,000 vacant condos at its peak inventory in 2008. Since then, most
have sold, largely due to the eager lineup of international investors from Central and South America.
And while Florida may be a mecca for Europeans
and South Americans, Macaluso’s not discounting the
people of China. Today, there are at least a million
millionaires in China, with an average age of 39, he
says. “They’re young and rich and looking for alterna-
tive places to live and invest.”
As of March 2012, China (including Hong Kong),
Canada, Mexico, India, and the United Kingdom ac-
counted for 55 percent of all international transactions
in the United States. Canada accounted for 24 percent
of international sales, while China accounted for 11 per-
cent, up from 9 percent in 2011. Mexico was third with
8 percent of sales, and India and the U.K. each accounted for 6 percent.
These countries dominate the market for a reason. For the first time in 2008, Canada’s dollar hit
par with the U.S. dollar. China has seen a proliferation of new trade agreements that favor Chinese investors, and the country’s slower growth rate is still a
robust 9. 5 percent, remaining quite high compared to
the 1. 5 percent rate in the United States. Mexico has
$26 billion flowing into its economy from abroad,
much of which comes from the remittances of migrant
workers, many of whom are in the United States.
“Investing in real estate is great for individuals
and for sovereign nations,” says CIPS instructor David
Wyant of Wyant Realty and Across Borders School of
Real Estate in Ormond Beach, Fla. “Real estate has its
ups and downs, but it’s never worth nothing. It’s tangible, it holds its value, and it’s around for a long time.”
Some global transactions
may pose legal risks. To
learn more and watch a
video on the topic, search
for “money laundering” at
Surmounting Financing Hurdles
As hard as it is for many Americans to qualify for
mortgages these days, the obstacles facing foreign
buyers are even steeper. Since U.S. credit reporting
bureaus do not accumulate credit histories on people
outside the United States, banks won’t even consider
lending to such buyers. In fact, for the 12 months ending in March 2012, 62 percent of buyers from outside
the United States paid cash, up from 28 percent in
2007, according to NAR research.
Five years ago, foreign buyers could provide U.S.
lenders with letters from banks in their home country
to verify creditworthiness and get financing, Macaluso says. It’s not that simple today. In addition, some
countries have laws that impose punitive fees and
taxes on citizens who take assets out of their own
country and invest them abroad. Thus, buyers from
such countries may not want a bank or mortgage company back home making inquiries into their financial
matters, Lauster says. The Chinese government, for
instance, makes it very hard for its citizens to wire
money out of the country. Some end up bringing bundles of cash with them, says Helen Tam, abr, cips, a
Hong Kong native and a broker at Prudential York
Simpson Under wood Realty in Raleigh, N.C.
The best advice you can give international clients
who want to obtain mortgage financing is to get their
funds into a U.S. institution and “season them for at
least six months,” Lauster says. Or they can open an
account with one of the large international banks,
such as HSBC, UBS, Standard Chartered, RBS, or
Citi. “It makes the verification of accounts simple,” he
says, “particularly if the client goes to that same bank
for a mortgage.” n
U. S. cities by non-U. S.
Fort Lauderdale, Fla.
Source: REALTOR.com, Nov. 2012