Profile of International Home Buying in Miami 2012
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Transcript of 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.