Profile of International Home Buying in Miami 2012

7/28/2019 Profile of International Home Buying in Miami 2012

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2012 Survey of International Home Purchases in Greater Miami

Conducted October 2012 by NAR Research for

MIAMI Association of REALTORS

Summary of Responses

Lawrence Yun, Senior Vice PresidentJed Smith, Managing Director, Quantitative Research

Gay Cororaton, EconomistOctober 2012


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Outline of Presentation

Introduction and Summary

Survey Results

Experience with International Transactions

Buyer Characteristics

Realtor Expertise /Designations

Major Issues Reported by REALTORS

Conclusions


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Introduction and Summary

Survey Conducted During Sept -Oct 2012. Questions Focused on Experiences During Past Twelve

Months.

Received a Total of 924 Responses.

Analysis Indicates that International Sales Are Important niche market for a number of REALTORS

However, survey data indicates that the volume of internationaltransactions and purchases eased in 2012.

But average purchase price is higher and most transactions for cash. The international market remains a challenge for many, as REALTORS

deal with financing, language /cultural issues.

Most Miami REALTORS have designations and years of experience,but noted the need for greater expertise and professionalism.


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REALTOR Experience withInternational Transactions


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Most Miami REALTORS Have Worked with an

International Client in the Past 12 Months


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Forty-one Percent of Miami REALTORS Closed Six or

More Transactions in 2012


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Personal Contacts and Previous Clients Important in

Obtaining Clients

Online Marketing Also Important


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Thirty Percent of Miami REALTORS Had Six or More

International Clients in 2012


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21 Percent of Miami REALTORS Had 51% or More of Their

Transactions with an International ClientOnly 24 Percent Had No International Transactions


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Four Percent of Miami REALTORS had More than 51

Percent of Their Business as Commercial


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A Few Clients Were Involved in Both a Residential and

Commercial Transaction


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Buyer Characteristics


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About Half of REALTORS Had International Clients

Who Did Not Purchase a Property


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Financing and Could Not Find a Property the

Two Major Reasons for Not Purchasing


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Sixty-seven Percent of REALTORS Had at Least One

Client Who Purchased a Property


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Average Purchase Price Up Slightly


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Condominiums Continued to Be the Most Prevalent

Choice


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Commercial Purchases Concentrated in Retail and

Multi-Family Properties


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Mortgages Account for Low Percentage

of Transactions


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Most Buyers Purchased Property in a

Central City/Urban Area


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The Top Four Countries of Client Origin: Venezuela,

Argentina, Brazil, Canada


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The Top Tier Countries of Client Origin


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The Second Tier Countries of Client Origin


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REALTOR Expertise and Comments


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Sixty-six Percent of REALTORS Have 6+Years of

Experience


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REALTOR Designations


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Eighty-six Percent of Miami REALTORS Report Constant or

Higher Percentage of Clients Who Are International


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Exchange Rates Continue to Be Seen as Important in

Affecting the Demand for U.S. Property


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Security of Investment and Location Are Most

Important Factors In Purchasing a Miami Property


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Major Comments Reported by Realtors

Miami and Floridaperceived as highly desirable. Climate, amenities, international ambience.

Legal protections and security from U.S. laws.

Limited Mortgage availability/dollar financing issues.

Residence requirements/immigration issues. Language and diversity of culturescan be issues in

completing transactions. Diversity of expectations.

Language capabilities important.

Slow Short sales process is frustrating buyers. Need for greater expertise/knowledge/professionalism in

dealing with international clients.


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Why International Clients Buy in Miami: Quotes from

Miami REALTORS

South Florida is an attractive area partially because of its; 1- Proximity to Central &South America 2- Multi-cultural composition. 3- As an alternative "Home" for

problem nations. 4- Currency or monetary restrictions in other nations, makes SF a

safe haven. 5- Investor looking for higher return and safe investment.

Besides the value of the dollar, the political situation and insecurity problems in

almost all Latin American countries is the most important factor that influences myinternational clients to buy properties in Miami/South Florida.

Ever since May when the US opened commercial ties with Colombia, 80% of the

people that apply for Visa's get them. These people find it a dream to be able to own

property in the US. Florida is the closest to South/ Central America & because of thelanguage and weather they feel more at home here.

They were Russian buyers that bought in sunny isles to have a luxury place to visit

and maybe move here to give their kids a better life.


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Why International Clients Buy in Miami: Quotes from

Miami REALTORS

A lot of potential business out there in South America and Europe.

I have seen the buyers evolve from predominantly Latin Americans and New Yorkers

to now Canadians, Italians, Finnish, English. I think it's a good thing to see such

diversity in the market!

I work with clientele from Israel and Mexico and many of them purchase on cash

basis.

Must target UK, Germany, Russia, China and South America specially Brazil and

Colombia

Investors are increasing due to low values and good rental income.


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Issues Reported by RealtorsAs a Realtor, we have numerous requests from international buyers; a lot of them are

having problems getting the US DOLLAR because of government regulations- if they do

not have that regulations the sales will go up as a rocket

Concern about the unfriendly TSA employees at the Airport in Miami

FIRTA is becoming an issue since they pay so much in property tax and have noexemptions, they believe it unfair

Foreign buyers would like more interested to invest in Miami if they could access any

kind of status related to their residence here

Language skills are very important because international clients want to do business intheir language, not in English. We must offer complete customer service such as helping

them with the money transfers, providing them the right sources for legal, furniture

shopping, accommodations, etc.

We need the short sale process to be faster. I have various clients in process of

purchasing these and it takes so long that some give up.


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Issues Reported by Realtors

The industry could benefit greatly, if there was a more defined and clear methodology

in the way Title is taken. Many Attorneys differ on BVI vs. REVOCABLE TRUSTs.

Real Estate Agents handling Foreign Nationals should truly be "Certified" & specially

licensed to do so as the need to be educated in many areas that affect their clients is of

great importance to our real estate community. They need to have the right network ofreal estate & immigration attorneys & Foreign National tax specialists or they should be

directed to refer their prospects to appropriately licensed & trained Realtors.

RCA should create a referral program for International agents to promote better and

secure our properties to Latin America.

Many of the international clients were very hesitant to work with a Realtor for past

negative experiences dealing with lack of professionalism, lack of knowledge and no

expertise.


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Conclusions

International Sales are a Significant Market for Miami for location andinvestment security reasons

However, survey data indicate volume of international transactionsappeared to have eased in 2012:

- decline in percentage of REALTORS having an international transactions ( 77% in 2012 vs.83% in 2011)

-decline in percentage of REALTORS having 6+ international clients (30% in 2012 vs. 34% in2011)

-decline in percentage of REALTORS who had at 51%+ of their transactions as international(21% in 2012 vs. 26% in 2011)

-decline in percentage of REALTORS who had at least one international client whopurchased property (67% in 2012 vs. 69% in 2011)

-decline in percentage of REALTORS who reported an increase in the percentage of clientswho are international ( 45% in 2012 vs. 49% in 2011)


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Conclusions

Although volume indicators are lower, the average purchase price is higher ; 72 percent of

Realtors report prices at greater than $ 150,000 compared to 67 percent in 2011

Key buyer characteristics

- Venezuela, Argentina, Brazil and Canada are major countries of origin

- Condominiums are still the preferred choice, but there was greater interest in single-family detached homes (20% in 2012 compared to 16% in 2011)

International sales market presents unique challenges. Financing: Many buyers pay cash because credit scores do not transfer easily on an

international basis. The exchange rate continues to be viewed as a factor influencing thedecision to purchase.

Bridging the language gap and enabling international clients to understand how the U.S.property market works remains a challenge for many

Perceived high property taxes, titling problems, and immigration/residence were alsoissues mentioned by respondents

Failure to find a property may indicate additional opportunities for Realtors to provideimproved service beyond current offerings.

C l i


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Conclusions

Commercial transactions appear in a number of cases to be connected

with visa and immigration opportunities.

Many contacts initiated via personal relationships. Although personal contact is most favored, online marketing is increasing.

For REALTORS with only an occasional sale, some study of foreign cultures andcustomers may improve communications.

Most Miami REALTORS Have International Expertise and Experience

-Many Realtors with international practices have a variety of designations indicating

specialized expertise.

-About two-thirds of Realtors have been in business for more than 5 years.


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End of Presentation. Thank you.

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