Volume XIII Issue 2                                                                    2nd/3rd Quarter 2005

 

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.
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Source: Wall Street Journal, April 2005

 

 

                                       

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