Prepare Global Buyers for Nuances in U.S. Transactions
November 7, 2019
Where Are Foreigners Looking to Buy?
- Sukkau said many Canadians are “snowbirds” looking in Southern states for an escape from cold weather. Arizona, California, Florida, Hawaii, and Texas are popular destinations for Canadians. “The one thing you need to remember is that we have universal health care, and Canadians have to live 182 days per year in Canada to maintain health care coverage,” Sukkau said. “So they need somewhere where they can live for six months out of the year.”
- Many Mexicans make housing decisions based on proximity to family, Barrios said. Cities with a healthy Mexican migrant population, such as Houston, Dallas, and Miami, are popular destinations.
- Jamaican buyers are showing interest in turning properties into short-term rentals, eyeing strong STR markets such as New York, Atlanta, and Miami, James said.
While real estate purchases by foreign buyers have been declining, you should still be prepared to serve these customers well by being able to explain how the buying process in the U.S. differs from their home countries.
Industry leaders from Canada, Mexico, and Jamaica, who spoke Thursday at a session about global business opportunities during the REALTORS® Conference & Expo in San Francisco, detailed some of the main issues for which foreign clients will likely need your guidance. In Canada, for example, homes typically close in a week, whereas it takes an average of 30–45 days in the U.S., said Barb Sukkau, chair of the Canadian Real Estate Association’s Global Committee. There are also fewer transaction costs in Canada, and there is no such thing as escrow.
“Setting expectations with international clients about the [homebuying] timeline is important,” Sukkau said. “They may have transaction expectations that are different than what you’re used to. For example, in Canada, everything is done electronically; you don’t have to sit at a table face-to-face to sign anything. But in the U.S., [typically] everyone physically comes to the closing table.”
It’s wise to build a relationship with the referring agent, who can help you understand these nuances, said Andrew James, president of the REALTORS® Association of Jamaica. “In Jamaica, it’s criminal not to have clients sign a referral form,” he explained. “Establishing a friendship with the referring agent will make it so much easier when you receive the referral form and are looking for help understanding what things mean.”
Mexico, meanwhile, is the only country in North America that requires homeowners to register their properties with the government, said Robert Barrios, president-elect of AMPI National, Mexico’s largest professional real estate association. This rule affects the mindset of Mexican buyers purchasing in the U.S. which means that their agents here should clearly explain the legal ramifications of a transaction.
You also should be sensitive to the culture your clients come from and dispel any stereotypes that could hamper the business relationship. “The global media treats Mexico like it’s a single county,” Barrios said. “ ‘They kill and rob everyone in Mexico.’ Yes, we have cartels and a drug trafficking problem, mostly in rural areas. But in Mexico City, you can walk around freely, go to the theater, restaurants are full. The big cities don’t have a security problem.”