Florida Realtor April 2012 : Page 16
FLORIDA BY RICHARD WESTLUND Who, What, Where Send info about new condo listing on the golf course Interested in global real estate? We’ve got tips for ﬁ nding and marketing to global buyers and investors. thousand years ago it was said that “all roads lead to Rome.” Today, real estate buyers from Rome—and hundreds of other cities around the world—are heading for Florida. “I think we’ll see a steady, stable stream of international sales this year,” said J ohn Tuccillo , chief economist of Florida Realtors® . Speaking at Florida Realtors’ recent 2012 Real Estate and Economic Forecast Conference in Or-lando, Tuccillo noted that residential demand is up from buyers in Canada, Latin America, Europe and other parts of the world. “Lower prices and favorable exchange rates have pro-moted purchases in Florida,” he said. “For instance, Canadians are getting a great discount when you consider the strength of their dollar.” For many Florida real estate profes-A Powerful Magnet for Global Buyers A noW YoU KnoW 57% sionals, international buyers are ideal cus-tomers. They tend to buy higher-priced single-family homes and condominiums, and 85 percent of their transactions are all cash, according to the 2011 Profi le of In-ternational Home Buyers in Florida, pre-pared for Florida Realtors by the National Association of Realtors’ research division. In fact, 77 percent of sales professionals reported that they had worked with an international customer in the preceding 12 months, up from 65 percent in the 2010 Florida survey. Clark Toole , president and COO of Cold-well Banker Residential Real Estate Florida , says his fi rm’s statistics closely track the survey results. “But the numbers may ac-tually be understated since many buyers don’t record a foreign address,” he said at the 2011 Miami International Real Estate Congress in Coral Gables. “The grow-ing ﬂ ow of commercial investment in T ake 5 rs us investo eos: Serio id of V 5 rt a e p k ta a big ad will be e th t u o from abro k ec tplace. Ch nell the marke Tami Bon m o fr s o e id v nd 5 a l a ke Ta rnation ealty Inte ige st re P of EXIT R ax with RE/M / rg .o John Mike rs lto ﬂ oridarea s on Realty at ve minute ﬁ r fo ry ra b li ia yers. d u e b m lobal ork with g how to w According to the 2011 Proﬁ le of International Home Buyers in Florida, the recent global recession actually had a favorable impact on international purchases of Florida real estate, with 57 percent of Realtors reporting increased buyer interest, and only 21 percent reporting a decrease in interest. 16 FLORIDA REALTOR April 2012
Florida: A Powerful Magnet For Global Buyers
Who, What, Where
Interested in global real estate? We’ve got tips for finding and marketing to global buyers and investors.
A thousand years ago it was said that “all roads lead to Rome.” Today, real estate buyers from Rome—and hundreds of other cities around the world—are heading for Florida.
“I think we’ll see a steady, stable stream of international sales this year,” said John Tuccillo, chief economist of Florida Realtors®. Speaking at Florida Realtors’ recent 2012 Real Estate and Economic Forecast Conference in Orlando, Tuccillo noted that residential demand is up from buyers in Canada, Latin America, Europe and other parts of the world. “Lower prices and favorable exchange rates have promoted purchases in Florida,” he said. “For instance, Canadians are getting a great discount when you consider the strength of their dollar.”
For many Florida real estate professionals, international buyers are ideal customers. They tend to buy higher-priced single-family homes and condominiums, and 85 percent of their transactions are all cash, according to the 2011 Profile of International Home Buyers in Florida, prepared for Florida Realtors by the National Association of Realtors’ research division. In fact, 77 percent of sales professionals reported that they had worked with an international customer in the preceding 12 months, up from 65 percent in the 2010 Florida survey.
Clark Toole, president and COO of Coldwell Banker Residential Real Estate Florida, says his firm’s statistics closely track the survey results. “But the numbers may actually be understated since many buyers don’t record a foreign address,” he said at the 2011 Miami International Real Estate Congress in Coral Gables. “The growing flow of commercial investment in Florida, including job-creating multinational companies, is another positive factor for our international market.”
Changing Buyer Patterns
While Florida attracts buyers from around the world, they come primarily from Canada, Europe and Latin America. Within those three regions, demand tends to rise or fall based on financial, economic and political circumstances. The European debt crisis, for instance, has caused some potential buyers to delay vacation home purchases, while others like the idea of holding investment assets in U.S. dollars.
According to the 2011 survey, Canada is Florida’s top international market, accounting for 39 percent of all foreign buyers, up from 36 percent in 2010. In contrast, the United Kingdom declined— accounting for 7 percent of foreign buyers, compared with 15 percent in 2010. German buyers were 5 percent of the total, unchanged from 2010.
The biggest jumps occurred in Latin America, where Brazil’s share of the international market rose to 8 percent and Venezuela’s climbed to 7 percent; both had been at 3 percent in 2010. Another positive note: Venezuelan buyers paid a median price of $258,300, well above last year’s average, and 12 percent of those buyers purchased homes valued at $1 million or more.
Overall, foreign buyers were likely to purchase in a resort area or a central city/ urban area, with most sales activity in the Miami and Orlando markets. (See chart, “Florida Destinations for Foreign Home Buyers,” p. 20.) Within those regions, as well as other parts of the state, international buyers tend to cluster in certain neighborhoods and condominium buildings. For instance, Sunny Isles Beach, in South Florida, has a large Russian enclave, while Kissimmee, in Central Florida, has attracted buyers from Puerto Rico as well as the United Kingdom.
Maximizing Your Marketing Tools
One of the best ways to connect with international buyers is to prepare a professional showing package in both English and the prospect’s native language. It’s an opportunity to showcase your credentials and explain how the U.S. real estate system works, according to Deborah Boza-Valledor, COO and chief marketing officer at the Miami Association of Realtors®.
“You want to maximize your marketing tools,” she says. “Having a showing package customized for your buyers will set you apart from the crowd.”
Boza-Valledor suggests including your resume, a guide for foreign buyers and investors, a blank Florida contract with addendums and a selection of three to five listings. You can also prepare a list of “10 reasons to buy here,” designed for your local market. Each page can be printed with one side in English and the other in the buyer’s language. The package can also be prepared as a PDF, to be used for emailing or downloading to a customer’s tablet or laptop.
“Deliver the showing package to the buyer’s hotel a day before you go out to look at the properties,” she says. “Be sure to put your resume on top, so it’s the first thing they see when they open the package.Then, they can review your credentials with family and friends and read through the contract in advance. That will get them more comfortable with you and the transaction.”
Boza-Valledor also recommends printing customized business cards with your photo and contact information on one side and your designations (with brief explanations) on the other side. “Tell the customer that you have experience and education in the international field,” she says. “It can make a big difference in building those relationships.”
International Purchasers in Florida
In South Florida, Brazil and Russia are leading sources of international buyers, especially for condominium purchases, according to Beth Butler, president and chief operating officer of ONE Sotheby’s International Realty in Miami. “In areas like Key Biscayne, we see [buyers] from Argentina and Peru, and there’s still strong European traffic on Miami Beach,” she says.
In Central Florida, Ellen L. Thunell is seeing buyers from even farther afield. “Our agents are serving buyers from South Africa and Australia, as well as Canada, Norway, Brazil and France,” says Thunell, broker/vice president at ChampionsGate Watson Realty Corp. near Orlando. “The UK is still a strong market for us, but recently many British owners are selling their vacation homes, and Canadians seem to be the leading group of buyers.” Perhaps the most salient point about Florida’s international market is its breadth and diversity. “About 25 percen
Of our transactions involved a foreign buyer,” says Pat Dahne, broker of Pat Dahne Realty Group in Coral Gables. In the past year, for instance, Dahne has seen a family from Venezuela that purchased a luxury single-family home; a father from Australia who purchased a foreclosed condominium for his daughter at the University of Miami; and a French couple that explored sites in Coconut Grove for a small business. “One of the most interesting clients was an investor from Argentina who had set up a fund back home and was purchasing condo units and managing them for his partners,” Dahne says.
What Do Buyers Want?
Two words sum up Florida’s appeal for international buyers: vacation and value. With its beaches, golf, shopping, boating, and cultural and tourist attractions, Florida has been a global vacation destination for four decades. However, vacation buyers face U.S. residency restrictions that limit the amount of time they can spend in Florida (see “Understand U.S. Visa Programs,” this page).
Today, Florida also offers excellent values for international buyers compared with vacation destinations in Europe, the Middle East and Latin America. “With today’s low prices and The currency differences, a Brazilian can buy a beautiful home that has been [already] discounted to $1 million for just $600,000,” said Ron Shuffield, president of Esslinger-Wooten-Maxwell in Coral Gables, at the Miami International Real Estate Congress. “That’s why our international friends are helping the market move through the U.S. recession.”
The 2011 survey found that 41 percent of foreign buyers purchased a property as a vacation home, 23 percent intended to rent it, 25 percent planned a dual use and 6 percent bought it for a retirement home.
“Most Orlando-area (international) buyers are looking for fully furnished properties—both single-family homes and condominiums—so they can easily rent them out at times the owners are not visiting Florida,” says Thunell.
While many foreign buyers prefer easy-to-maintain condominiums, others buy single-family homes and some purchase multiple properties in the same location. “We’ve seen affluent Latin American parents buying homes for themselves and for their [college-age children],” says Lewis Good kin, president of Good kin Consulting, Miami
Attracting Global Customers
Florida sales professionals attract international customers in many different ways. Some turn their language skills or cultural background into a marketing asset, while others focus on building online relationships or travel aboard to market their listings and generate referrals.
“International business is largely done by personal referrals,” says Dahne. “Someone seeking to get involved in this market should get involved in local, state and national networking functions and start building a network.” The 2011 survey noted that more than 60 percent of international contacts came from referrals and 23 percent from online marketing.
Today, many international customers can be found close to home, including foreign visitors and current owners seeking to sell their properties. In Orlando, Thunell says, her prime office location right off Interstate 4 has helped attract walk-in buyers. “We’ve also had great success from holding open houses in communities [with short-term rentals] While international buyers are visiting here.”
In the next year, Florida real estate professionals can expect continuing strong activity in the international sector, led by demand from Latin America and other emerging markets, according to Lawrence Yun, chief economist of the National Association of Realtors. “Follow the trends in foreign currencies, because exchange rates are definitely a driver for international buyers,” he says. “And Florida continues to be seen as a desirable place to buy.”
Richard Westlund is a Miami-based freelance writer.
Understand U.S. Visa Programs
Since one of the issues facing international buyers is the amount of time they can spend in Florida, it’s important to understand current and pending U.S. visa programs. In general, U.S. Citizenship and Immigration Services (USCIS) encourages foreign visitation and foreign investment, but imposes strict rules and requirements that vary from country to country. If you’re working with a foreign buyer, take a close look at the USCIS website, uscis.gov, or suggest that your customer speak with an immigration attorney.
In recent years, many international investors have taken advantage of the EB-5 visa program, which is designed to stimulate the U.S. economy through job creation and capital investment. A foreign national who invests $1 million directly into a business that creates at least 10 jobs or invests $500,000 in a regional center that creates new jobs can get a green card and become a permanent U.S. resident.
The U.S. Congress is now considering the VISIT-USA Act, which is designed to make it easier for some foreign nationals to obtain visas. Called Visa Improvements to Stimulate International Tourism to the United States of America (S.1746), the act has several important provisions, including:
• Home purchases. The bill creates a nonimmigrant visa, renewable every three years, for an individual who spends at least $500,000 to purchase single-family homes in the United States. At least $250,000 must be spent on a primary residence where the visa holder will reside for at least 180 days out of the year while paying taxes to the U.S.
• Canadian tourism. A new “Canadian retiree visa” (nonimmigrant visa) would be created that would last 240 days and be renewable every three years for Canadians over age 50 who have visited the United States or own a U.S. residence.
• Premium visa process. Visitors could pay a higher visa-processing fee in order to receive a visa interview within three business days, reducing long wait times in countries like Brazil and China.
• Video conference pilot program. A secure videoconferencing pilot program would be authorized for conducting visa interviews, making it easier for applicants to obtain a U.S. visa. Currently, an in-person interview is required.