By Madeleine Romanello….
Working with foreign buyers of real estate requires a subtle yet firm hand of guidance to move things along in the US. The real estate professional has to establish authority from the very beginning in order to help the client through the process of absorbing market data, crafting a contract and navigating the closing process.
One of the main reasons a firm hand is required in the real estate buying procedure is because outside the US real estate transactions are often not nearly as structured, so the buyer has to readjust. Foreign buyers need to understand that contracts and time lines have to be respected and cannot be ignored or changed capriciously, certainly not without seller approval and further into the negotiations lender approval as well.
Also, Realtors in the US are far more involved in the contract process compared to other countries and it is important that foreign buyers know exactly what is expected of them at every step. Buyers are frequently surprised by our efficiency as they may be used to a contract taking a month or more to put together in their native country, while here in Florida we write the offer on the actual contract form.
We need to give the foreign buyer a true understanding of the actual transaction, holding and maintenance costs so they can determine which properties can give them the highest or most stable returns and/or appreciation, those two not necessarily being the same. Determining the true financial goal of the client is crucial for this analysis.
Clients need to understand the estimated maintenance costs, management costs, real estate taxes and rental rates. Rental rates do not always cover the holding cost especially on higher priced properties. In many other countries renting is the norm, whereas in the US home ownership exceeds rental usage and the foreign buyer needs to understand the radical difference in rental demand here compared to other countries.
If the buyers are buying for investment, what ROI (return on investment) are they expecting? Or as a second home, are the holding costs lower than staying in hotels or time shares? The Realtor has to provide a clear, complete picture, including profit and loss estimations to convey what it takes to buy and hold real estate in south Florida.
Selling to foreign buyers requires a concierge approach. The Realtor has to be prepared with a menu of other professionals that a foreign buyer will require, including inspectors, attorneys, CPAs, bankers, lenders, cleaning services, and property managers. We need to be able to coordinate the transaction details for them, and they must be willing to pay for those services. Fortunately, this fact makes the foreign buyer easier to work with as they do not expect a Realtor to work without compensation, and they are happy to give their trusted realtor the control necessary to do the job in a professional manner.
Prices are low, financing is available and South Florida is one of the prettiest urban playgrounds in the world, so bring on those buyers!
AUThOR BIO:
A graduate of England’s prestigious Cambridge University, Madeleine Romanello has lived in Germany, Greece, and England, and has been involved in the South Florida real estate market for thirteen years as a broker and currently a broker-associate with Douglas Elliman Florida.
An Accredited Buyer’s agent, Luxury home Marketing Specialist, Certified Residential Specialist, certified REO specialist, and member of the Dade Real Estate Investors Association, Madeleine offers clients thoroughly researched and intuitive advice on selling and buying residential, and investment properties successfully even in this sluggish real estate market.
