Some people are casting a wide net when it comes to luring buyers for their home. How wide? How about to all four corners of the globe? The weakened economy has made the United States ripe with real estate deals that would have never happened a few years ago.
"The shaky economy weakened the U.S. dollar and the extreme difficulty in securing a lender has brought real estate to a molasses-slow pace for Americans," says Peter Middleton, president of Middleton & Associates in La Jolla, Calif., which has expertise in the European and Canadian markets. "Foreign buyers, however, figure they can get some extra bang, in terms of the size of the property or its location, for their buck because their currency is stronger. Plus, they aren't experiencing the same challenges in lending as we are at home.”
Outside investment is “definitely on the uptake,” notes Middleton.
In a 2008 survey of international homebuying activity conducted by the National Association of Realtors (NAR), more than a quarter of respondents reported having at least one international client. Top countries of origin are Mexico, the United Kingdom, Canada, India and China. While investors are scooping up properties in all 50 states, Florida, California, Arizona, Texas, New York, Washington and Nevada lead residential transactions.
International buyers tend to be well qualified, too. Fifty-four percent pay cash, compared to only 7 percent of American buyers, reports the NAR. The closing process isn’t much different when a foreign buyer is involved, but you may need a little patience. The closing process could “take longer and be a bit more difficult for the money to arrive,” says Daniel P. Harris of Harris & Moure in Seattle, Wash., whose law firm represents individuals from South Korea, Vietnam, Russia and China.
If you're trying to sell a property and haven't worked with an international buyer before, consider tapping into this powerful and growing demographic. Try these tips to make your home foreigner-friendly:
- Work with a broker who has international reach. “Real estate remains and always will be a grassroots effort, so it is important to work with brokers who have contacts and offices in your target markets,” says Luigi Rosabianca, principal attorney and founder of Rosabianca & Associates, a full-service real estate law firm in New York and Milan. Rosabianca’s firm, for instance, employs a staff fluent in Italian, Portuguese, German and French. So if you’re interested in attracting foreign suitors, make sure your real estate agency offers multilingual services.
- Avoid garish marketing tactics. Buyers looking for a second home or vacation home for their own personal use are attracted to classic properties, says Rosabianca. New York City’s iconic lofts and midtown apartments with “unobstructed views of the skyline or Central Park” garner the most interest from foreign nationals, he says. “Such prospective investors aren't swooned by staging and other silly marketing ploys. It's more simple than that. If the real estate at hand has value, is near public transportation, has good rental yields, low monthly costs, tax abatements and is in a desirable area, it will sell itself.”
- Play up the rent potential. Many foreign buyers are looking for opportunities to offset costs. “Rentable properties are in high demand,” says Stefan Bolsen with Engel & Voelkers in Naples, Fla., a German-based real estate brokerage firm specializing in foreign investors. Having a rental history will help your sale. Larissa Zimmerman of Australia is planning on buying in the U.S. within the next 12-18 months, spurred on by domestic economic conditions. She has her sights on a condo in Maui, Hawaii, as well as investment property possibilities that include “gutted houses” in Michigan or Ohio.
- Think minimalist and present your home with simple designs. “Europeans like simple clear designs. Europeans want light, airy condos and houses,” says Bolsen. Debra Duneier, an associate broker for Corcoran in New York City, agrees. Duneier, who is currently working with a prospective buyer from France, advises sellers to clean out the clutter, put personal photographs away when showing the property and freshen up the home with neutral paint. “These easy projects will increase the perceived value of your property and make it more appealing for foreign buyers and local buyers as well,” she says.
