By Cindy Fauth
If I told you that a buyer base representing $4-$5 billion in agent commissions in the last 12 months alone was up for grabs, would you be interested?
It’s true. Last year, international buyers spent $82 billion in U.S. residential real estate, according to the “2011 NAR Profile of International Home Buying Activity” survey. This number is up from $66 billion the year before, proving that this market is not one to be ignored. Perhaps more staggering is the fact that more than half of the REALTORS® responding to the NAR survey indicated that at least one client did not purchase property due to financing problems (in most cases, they were financially capable, but unable to prove creditworthiness) or were unable to find a property.
The August 2011 issue of NAR Global’s Global Perspectives newsletter tells us that the ethnic population is growing rapidly (the Asian and Hispanic populations each increased 43% since the last census) while the White Non-Hispanic demographic grew just 1% between 2000 and 2010.
What does this mean for you? Prepare now to meet the needs of multicultural clients. Knowledge of international buyers can help ensure a smooth transaction. Your role in clearing the financing and property search obstacles is to be both an educator and a trusted advisor.
Start with real estate 101. If your clients have no experience purchasing real estate in the U.S., walk them through the entire process. Discuss your role and duties to them as their representative in the buying process.
Explain that most U.S. home buyers take out mortgages. Help your clients understand how mortgages work, and discuss the process of obtaining one. Ask them about the source of their downpayment funds and explain the documentation they’ll need if the money has to come from overseas. Also discuss the impact of credit history on borrowing rates.
Go the extra mile to find a lender that will work with them. Regional and community banks as well as credit unions are more likely to be open to the needs of borrowers who don’t fit the traditional requirements. Establish a network of contacts with lending officers at small financial institutions and educate them on the value of having multicultural borrowers.
Not sure how to find these global buyers? Leverage the resources available from NAR Global. Past issues of the Global Perspectives newsletter walk you through establishing your niche and the steps to market yourself to the inbound and outbound international buyer groups. NAR also offers classes and a designation focused on international real estate, the Certified International Property Specialist designation. Both resources are available at www.realtor.org/global.
Cindy Fauth is the Global Marketing Manager for the National Association of REALTORS®.
For more information, visit www.realtor.org/global.
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