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Takeaways:
- The number of agents working with international clients rose by 7 percent from March 2014 to March 2015.
- It’s not unusual for overseas investors to buy several properties at once; many foreign buyers see American real estate as a good deal.
- Most international clients buy homes using cash.
According to the latest data from the National Association of Realtors’ Profile of International Home Buying Activity, it’s true that the numbers of Realtors working in the international market is growing. The number of agents working with international clients rose by 7 percent from March 2014 to March 2015.
But even so, there were still only some 209,000 sales to foreigners, which is a measly 4 percent of the total U.S. market. I just can’t understand why U.S.-based real estate agents don’t get involved in more foreign sales.
Orlando, Florida, is the No. 1 destination for overseas visitors to the U.S.; it has attracted 60 million visitors as of 2014 — an all-time record for the tourism sector.
Where tourists are — property buyers are not far behind. Unsurprisingly, Florida is the No. 1 state for international buyers. We are finding success in our international market, and we think you might want in on it, too.
Here are five reasons that might make you consider working with international buyers:
1. Spending power
Foreign clients spend almost twice as much on property as U.S. buyers. In 2014-2015, the average price paid by foreign clients for a house was $499,600, compared with the overall U.S. average house price of about $255,600.
Leading the way, Chinese spent more than other nationalities — an average of $831,800 in the U.S. It’s not unusual for overseas investors to buy several properties at once.
Even though U.S. real estate values are rising month over month, many foreign buyers still see them as comparatively cheap. They believe the properties here provide better value than those in their native country.
International nonresident clients are likely to be wealthier than typical U.S. domestic buyers.
2. Cash is king
Most international clients buy homes using cash, with more than half being all-cash affairs, which is a big advantage for developers and agents.
That said, some international buyers who need mortgage financing can run into issues with a lack of credit history, documentation or other problems, so it is always useful to have alternative financing arrangements available.
3. It’s hard work
Don’t be fooled; finding and keeping international buyers is hard work and takes considerable focus and effort.
Hiring specialized staff, attending overseas shows and events, and producing targeted sales and marketing materials, as well as translation, inspection trips and all the many other requirements that go into securing foreign sales, is not easy. But the return on investment is worth it in the long run.
4. It provides diversification
Diversification and risk spreading is good for any business, so if a downturn happens in one market, you are likely to see rising sales in a corresponding sector.
However, it means you must stay on top of the data and keep yourself well-informed of sales movements, big economic issues, major currency swings and more.
5. Because others aren’t
It’s often profitable to have first-mover advantage. Gaining a foothold in foreign markets where there are likely to be fewer competitors could be a big factor in boosting your real estate business. That is, assuming you are up to the challenge.
These are five reasons we enjoy working with foreign investors, and we hope that we have successfully encouraged you to consider working with foreign clients as well.
Garrett Kenny is CEO of leading central Florida developer and agency Feltrim Group. Follow him on Twitter at @garrettkenny.