This is a great week for international real estate here at the Birmingham Association of REALTORS®. We are delighted to have 2011 NAR President Ron Phipps in town to teach the CIPS designation course to our members and members from across the southeast.
International real estate is quickly proving to be the future of this industry.
International transactions contribute to the expansion of the U.S. real estate market. In its 2014 National Association of REALTORS® Profile of International Home Buying Activity, NAR estimated the volume of international sales for the period covering April 2013-March 2014 at $ 92.2 billion, which is approximately 7 percent of total existing home sales during the same period.
But there are some misconceptions about WHO can get involved with international buyers and sellers, and we need to put those myths to rest.
International business can seem like a daunting venture. From language to culture to business practices, the potential complications are enough to make a seasoned real estate professional hand a foreign client to “someone more international.” But why hand that business, and any residual referral business that might come with it, to someone else? The resources exist to help anyone become a global agent, and many of the myths surrounding international business make it seem like a more harrowing experience than it really is. Let’s set five of the top myths straight:
1. “But I only speak English!”
English is widely accepted as the global language of business, so chances are international clients will have command of the English language. In today’s increasingly global marketplace, there are resources and tools aplenty to help you communicate in nearly any language. For tips on how to overcome language obstacles, read this blog post.
2. “I haven’t traveled the globe. What do I know about other countries?!”
Stamps on a passport don’t automatically translate to international success. In fact, some of the most prosperous global professionals aren’t able to travel abroad more than once every year or two. So what do the jet-setters have in common with those succeeding stateside? An internet connection. Creating an online presence that provides unique, relevant, and up-to-date information, accessibility via email, phone, and video conferencing (ex: Skype, FaceTime), and differentiating yourself with content and proven experience are key factors in attracting and keeping international clients. Past issues of Global Perspectives, a publication for CIPS designees from NAR Global, provide practical tips for creating and executing an online marketing strategy through websites, blogs, and social media.
3. International transactions are complicated and time-consuming, it’s not worth it.
No doubt, international transactions pose some unique challenges when compared to domestic transactions. But, in terms of whether it’s “worth it,” the numbers speak for themselves:
- Last year, foreign buyers spent $149,000 more (mean purchase price) on homes in the U.S. than domestic (U.S.) buyers.
- 60% of foreign buyers paid in all cash, versus about a third of domestic (U.S.) buyers.
- 59% of international clients were from referrals.
Each country has its own unique business practices, however, so it is important to educate yourself on the geographic niche you intend to work with. It is also important to have a basic understanding of the tax, visa, financing, and currency considerations, and have a network of experts in those areas to help your clients. For tips on overcoming obstacles in international transactions, view the recent blog post, 7 Tips for Managing International Transactions and Overcome Global Barriers.
4. International business doesn’t exist where I live
Foreign buyers are purchasing property from sea to shining sea. You don’t have to live in a major metropolitan area, a vacation/resort haven, or beach town. Some of the most desirable locations for international buyers are college towns and suburban areas. They often purchase something right down the street in a small town as an investment property. To take a look at the international business opportunities in any area, take a look at NAR’s Local Market Assessment Case Studies. In these reports, we profile U.S. states where global business is “unlikely,” and provide resources to help you find it where you live.
5. I don’t have an international network to generate business
Establishing a network of professionals who know and understand the international market is a critical first step. From immigration attorneys to financing professionals to other international real estate agents, this network will help the transaction process run smoothly and with limited surprises. Furthermore, any existing contacts they have that need real estate help may result in leads for you! Read past blog posts from The Global View, such as Build Your Global Team, for tips on finding international professionals in related businesses. To build your network of international real estate agents, become a Certified International Property Specialist (CIPS). In addition to providing a strong education foundation for international business, the designation immediately connects you with an elite network of about 2,500 real estate professionals around the world. Find out more about the CIPS designation.
We hope this helps as you work to build an international business. What other complications or concerns do you have? What other resources have you found to help your global growth?
To view the original article, visit The Global View blog.