Luxurious Translations
United
States sellers are looking abroad as their local
buyer pools are shrinking, reports the Wall Street
Journal in a recent article.
“With an eye on the weak
dollar, American homeowners are increasingly seeking
out buyers who come not from around the block or
even a nearby town—but from other countries
altogether. And foreigners, hoping for a deal, are
more eager than ever to buy here. The upshot: The
residential real estate market is getting a small
shot of globalization,” states the article.
International residential marketing magazines such
as Unique Homes and DuPont Registry of Homes with
distribution of 80 countries report, “foreign Web
hits more than doubled in the past year… and demand
by foreign distributors for its luxury magazine is
up 12% from last year.”
Real estate firms and luxury property broker
consortiums have expanded to 43 countries including
South America and Asia.
In many marketplaces prices
have risen so high, “that the pool of potential
purchasers has actually shrunk—to folks who already
own homes in the area and built up equity, or who
have quick access to a lot of cash… another bonus:
since foreigners find it more difficult to get
financing here, they tend to pay all cash”.
Not everything is easy, though. “In cases where a
buyer does need a mortgage, U.S. and foreign banks
tend to drag the process out as they check credit
ratings and financial information abroad and at
home...it’s also standard protocol in some countries
to “lowball” a property, typically offering about
half of what a home is listed for...Don’t be
surprised if the buyer asks for a Ferrari at the
closing table”. One buyer requested that the sale
include a caretaker for the property—another wanted
the grand piano and lawn tractor, while a foreign
buyer from Nigeria wanted the seller to help him
transfer funds by supplying his bank account and
personal identification numbers.
NAR (National Association of REALTORS®) report, “a
record 2.82 million second homes were sold in 2004,
up 16.4% from the year before. Those purchases were
more affordable for foreigners whose buying power
has increased: The Canadian Dollar has risen 30%
against the U.S. dollar over the past three years;
the euro is up 50% over the same period, and the
Australian dollar has jumped 39.”
In response to this increase
in foreign buyers, the NAR has, “launched a program
in November that has begun registering agents
worldwide, if they pass a new online exam in NAR’s
database...the idea is that sellers will trust a
foreign agent with the certification and be more
likely to pursue a deal.
It should be noted that while the concept of foreign
buyers is catching on, there are still marketplaces
that haven’t seen the fruits as yet.
v
Source: Wall Street Journal, April
2005
