The International real estate marketplace is an ever-changing environment. Keller Williams Realty is offering global opportunities not seen in decades. It’s a real chance to be on the ground floor of one of the most powerful American real estate brands, and the largest, in terms of agent count, in the U.S.
According to the recent National Association of Realtors research, the attraction of US homes to overseas buyers is at its second highest level in recent years, (2013 Profile of International Home Buying Activity). International clients are estimated to have purchased $68.2 billion of residential property in the U.S., approximately 6.3 percent of the total dollar value of the U.S. Existing Homes Sales (EHS) market of $ 1.08 trillion. The average mean sales price for an international transaction was $358,193 VS $228,383, and 63% of those sales were for all cash. Canadians represented 23% of the transactions followed by China with 12%, Mexico at 8 % and India with 5% of all international transactions in the 12 months ending March 2013.
Why they are buying
International transactions take place for three main reasons. The USA is a desirable place to live, real estate is a profitable investment and real estate is also a secure investment. Driving these three reasons are the underlying desires to immigrate to the USA using the Government EB5 Visa Program, Education, and lastly the ability to invest and realize a realistic profit.
Where they are buying
International transactions are closely related to the area you live. If you live on the West Coast the majority comes from Asia and on the East Coast they will typically come from Europe. Therefore, if you are in a major coastal city such as Los Angeles, San Francisco or Seattle the likelihood of Asian buyers being interested in your home is increased and you might want to consider working with a broker who specializes in the Asian community.
Another major draw is the proximity to top universities. In 2012, research indicated that 764,495 international students came to the USA and a big percentage of them also buy a home rather than live in a dormitory. (www.iie.org/research-and- publications). If you live near the University of Illinois at Urbana Champaign or New York University in Manhattan then you would have an opportunity to find an international student as your potential buyer and you would want to list with a broker who is aware of this fact and who is actively working with the housing departments in their local university.
International buyers are looking online for terrific photos and videos since they are not physically here and they will quickly respond to the broker who makes their search simple and painless.
Furthermore, the above mentioned “Profile of International Buyers” indicated that 29% of the foreigners who were unsuccessful in buying a home in the USA could not find a suitable property and they gave up. Therefore it is critical that you choose a broker with a strong online presence and who understands the power of multiple photos (at least 20) and virtual tours. The best agents expose your property on an international level in multiple languages to maximize your home’s exposure.
Why hire a Keller Williams Global Property Specialist? (KWGPS)
Our Keller William Global Property Specialists have been trained to cover all of the above marketing avenues and have the expertise and cultural sensitivity to work with their international clients.
When you list your home with a KWGPS Agent, it will be automatically uploaded into the Proxio International MLS & Global Referral Network (www.proxio.com) for a global reach to more than 500,000 real estate agents in over 100 countries. Your listing is automatically translated into 19 different languages, metric conversion and 50 currencies along with a complete social media solution! Prospective buyers around the world can search online in their native language for your home and send a request to your KWGPS Agent which arrives in English.
In 2012 spent $68.2 billion purchasing properties in the United States. Their motivations were varied with 43% choosing the USA for its desirable location while another 21% felt US properties were secure investments and 27% made the investment because of the opportunity for profit. Although North American buyers (mainly Canadians) represented 31% of all transactions they were closely followed by Asians who were 26% of all buyers. The European community represented 24% while Latin Americans were at 13% of all foreign property. Detached single-family homes were the most desirable properties purchased (61%) followed by condominiums/apartments (26%) and the average price was $315,000. Buying USA properties can be challenging for first time investors and here are seven tips to make the process as painless as possible
1. Have your personal documents in order. Anyone can purchase property in the USA even if they are not US Citizens or are not green card holders or extended stay visa entrants. However, you will need at a minimum the following documentation:
– A valid foreign passport, or two or more current photo identifications such as a driver’s license, to show who you are.
– An Individual Taxpayer Identification Number. That’s a number assigned by the Internal Revenue Service to foreign nationals who need to file income tax returns.
Although property ownership isn’t tied to immigration or visa status, there are rules about how long you can stay. So if you’re not a citizen, check out U.S. visa requirements before you purchase.
2. Will you need a mortgage? The majority of foreign buyers paid cash for their property (62%) leaving another third in need of a mortgage. The U.S. banking system is familiar with international borrowers and even has Sharia compliant home financing. To get a U.S. mortgage, you must establish credit and earn a good credit score. To boost your score:
– Open U.S. bank and credit card accounts.
– Report all your income on your tax returns. Lenders use tax returns to verify your income and decide how much you can afford to borrow to buy a home.
– In addition our financial institutions that have overseas expertise can assist in security based portfolio loans and international currency transfers and verifying credit already established in your home country.
3. Work with a Keller Williams Agent who is a Keller Williams Global Property Specialist (KWGPS) with the training and experience of assisting international home buyers. Our KWGPS agents will have a team of experienced international real estate lawyers, finance professionals and title experts to that can help you protect your interests as well.
Share with your Keller Williams Agent any experience you have in purchasing US properties and what your expectations, goals and time frames are for your next purchase. Be prepared to take the time to sit with your agent for a full explanation of the US home buying process including the negotiation process. Be aware that the process of buying a property will vary between US States and regions so do not assume you’re buying experience in a previous transaction will be repeated in your next purchase. Ask your KW agent to explain how closing costs will be calculated and ask for home inspections to ensure you are purchasing a safe and sound home.
4. Learn to convert from the U.S. standard measurement into metric, or pick up a metric converter app so you can better estimate room and home sizes while shopping.
5. Don’t forget about the related costs of home ownership: In the USA you will encounter other home expenses you might not have in your country. Among these will be home owners insurance, property taxes, home owners association fees (HOA) utility fees for electricity, water and garbage service and home maintenance costs. It is wise to anticipate these extra fees and to set up a financial plan for your home so you know how much money to set aside for ongoing expenses.
6. Not fluent in English? Our KWGPS Agents will have access to people who can assist you in your native language and in many cases have affiliates in the title, finance and inspectors who are multilingual. Most title insurance companies can provide their documents in your native language however, most real estate contracts for the purchase of the property will be in English.
AUSTIN, TX (May 31, 2013) — According to the REAL Trends 500, Keller Williams Realty’s top brokerages sold more real estate in the United States than any other franchise’s brokerages last year. The report is an annual industry ranking published by REAL Trends, Inc., a leading source of analysis and information on the residential brokerage and housing industry.
Of the Top 500 real estate brokerages in the United States, Keller Williams Realty offices significantly outpaced the industry in both sales volume per office and transactions per office. Keller Williams Realty brokerages represented 23 percent (116 offices) of the Top 500 by closed volume and 22 percent (111 offices) of the top 500 brokerages ranked by closed transactions. The Keller Williams Realty offices included in the Top 500 handled approximately $67 billion in sales and more than 289,000 transactions.
“We are honored to be in business with so many talented associates who share our goal of being the largest, most productive and most profitable real estate company in the world,” Keller Williams Realty CEO Mark Willis said. “By putting our agents at the center of every decision we make as a company, we are able to empower our people to succeed as leaders in their markets.”
In addition to the overall rankings, Keller Williams Realty had more offices ranked than any other American franchise company in the Top 50 in each of the following categories:
- Transactions per Office
- Sales Volume per Office
- Percent Increase in Transactions
- Percent Increase in Volume
- 5-year Percent Increase in Transactions
The REAL Trends results reinforce the record-setting productivity gains Keller Williams Realty announced previously. In 2012, per-agent units increased 23 percent, closed volume was up 31 percent, and gross commission income rose 28 percent – far outpacing the industry. A record 91 percent of the company’s offices were profitable for the year. Moreover, the Keller Williams Realty profit share system distributed $55 million in profits to associates – an increase of 44 percent over the previous year.
“We are always moving toward our next big goal,” Willis said. “Once we achieve it, we set the next one and tackle it so that we are always making forward progress. Since last year’s REAL Trends 500, we’ve grown by 10,000 associates, become the largest real estate franchise in the United States, and been recognized by J.D. Power and Associates as highest in customer satisfaction among both home buyers and home sellers.* This year’s report shows that, once again, our education-based, technology-driven company is setting the bar for our industry.”
“It’s all about our people’s success,” added Keller Williams Realty President Mary Tennant. “When you make sure your associates have careers worth having, businesses worth owning and lives worth living, it’s no surprise when they dominate reports like this. We are so proud to be in business with all of the talented people who make it possible.”
For more details, the full reports are available on the REAL Trends Website: www.realtrends.com.
- Know your areas of expertise
- Are you a residential or commercial expert or do you have multifamily apartment sales experience?
- You can’t be all things to all people, so identify who is buying what kind of property first and then look to your area of specialization to satisfy their needs.
- Which price ranges are you comfortable in marketing?
- You must be able to walk the talk! (Lifestyles of the rich and famous). If you are driving a Volkswagen and living in a rental project outside the area you are trying to sell property in, it will be almost impossible to have any credibility with your clients.
- For example, many Russians and Chinese buyers are high net worth individuals and will expect a level of service comparable to what the concierge at the Waldorf Astoria Hotel in NYC will provide. You cannot fake this with your clients.
- Are you a short sale or foreclosure expert?
- Many international investors are looking for the DEALS and although the media always highlights the “trophy sales” in major cities the reality is that the average international sale in the USA in 2012 was $315,000.
- International investors are flocking to areas such as Las Vegas, Florida and Arizona where as much as 50% of all sales are to non-local buyers. Therefore you need to become the expert in such areas and establish contacts with agents in each for cooperative sales or referral transactions.
- Throughout Asia and parts of Europe, small or medium size investment funds ($25 million to $100 million range) are being set up to acquire USA foreclosure properties. They are looking for an expert in foreclosures who can lead them to individual properties or to financial institutions who are holding such properties, so start networking to position yourself as such a conduit.
- Know your marketplace
- A full understanding of the population demographics and future growth projections for every area is vital to enhance your position in the client’s eyes as the expert in your area.
- Use Google; Realtor.org research and statistics; state, international and U.S. Census Bureau statistics; Trulia; Zillow; REAL Trends; and Swanepoel Report, etc. to become the leading source of property statistics.
- Individual market area knowledge is vital to enhance your expert status so you must be able to confidently explain the listings and sales figures for every area you work in.
- Know the Board of Realtors multiple listing service statistics for your city, plus your individual office or company statistics as well as your own personal sales numbers, off the top of your head.
- Community benefits, education facilities and public conveniences, transportation infrastructure, utility costs, etc. are very important to international buyers, especially when they are immigrating to the U.S.
- Join your local Chamber of Commerce and take an active role since many overseas companies seeking to open a branch in your area will first meet with the Chamber of Commerce Business Development Committee as part of their due diligence.
- Meet the HR directors of the major employers in your area as many of them are recruiting top talent from overseas. Offer to provide their prospects with housing information, mortgage pre-qualification and property familiarization tours as part of your service package as an added value to the HR department.
- Meet the housing directors at your local universities. In 2012, more than 700,000 foreign students attended universities in the U.S. Approximately 40% of these students purchased properties through their parents to live in during their four years of study. Therefore, it is vital that you meet the university housing directors in your area and offer your services to them as part of their recruiting program with international students who all pay out-of-state tuition, which is an important component of each university’s annual budget.
- Know your customers
- Familiarity with your market’s diversity
- Based on the population demographics from the above, get to know the various community organizations: Asian associations, Italian/Russian/Latin American organizations. Offer to be a speaker at their many events and set up an ongoing marketing program to promote yourself as the “international expert” in your area.
- Become involved in your community outreach organizations.
- Building the relationship first
- The old adage “People don’t care how much you know until they know how much you care” is so true when working with international clients. Take the time to get to know your clients over a meal, coffees and dialogue about them BEFORE you jump into the conversations about business. Until they know you on a more personal level, you will not be entrusted with their business needs.
- Earning their trust
- Depending on the ethnicity of the clients you will be serving, you will need to study their culture before you ever meet them so that you will know the proper social customs such as gift giving, proper business card etiquette, greetings in their language, dining etiquette, respect and proper dress and many more intricacies of social dialogue.
- I would recommend reading books on international customs such as “Kiss, Bow, or Shake Hands” by Terri Morrison, among others.
- Familiarity with your market’s diversity
Upward of 40% of international students will purchase a home in their university town rather than live on campus or rent an apartment. When you consider the numbers in the top 15 cities alone, this represents approximately 194,000 purchases totaling in excess of $58 billion in sales at an average price of $300,000 per property!
Therefore, it makes sense to establish a professional and ultimately a personal relationship with the university housing department to better understand the university requirements, housing needs and student mix and over time to be considered one of their valuable consultants to assist incoming students with their off-campus housing needs.
Many universities have agents operating overseas in their targeted countries, so when you are also focusing on one of those market countries, ask for permission to work directly with their outside agents to connect them to your “in country” referral agents.
At the same time, identify and contact the local university agents responsible for the international marketing and offer your services, which should include available properties for sale or lease, area housing demographics, financing information and area tours both virtual and in person once the student and parents arrive.
Every major university will attend international education exhibitions in their targeted country to promote the educational and cost benefits of their specific university and city, so if possible, join with your university as one of their “experts” to help give them the competitive edge in enrolling the new student into their four-year program. (In most cases, the travel and expense costs for this week will be yours rather than the university’s.)
Top 15 Countries of Origin for International Students in 2012
Top 11 Majors for International Students
|1||Business and Management||21%|
|3||Physical and Life Sciences||9%|
|4||Mathematics and Computer Science||9%|
|6||Fine and Applied Arts||5%|
|8||Intensive English Language||4%|
States with the Most International Students
Universities with the Most International Students
|1||University of Southern California||7,987|
|2||University of Illinois at Urbana-Champaign||7,287|
|3||New York University||7,276|
|6||University of Michigan-Ann Arbor||6,095|
|7||University of California-Los Angeles||5,685|
|8||Michigan State University||5,358|
|9||University of Texas-Austin||5,265|
In conclusion, international education represents a huge opportunity for those agents living in one of the 10 states shown above or near one of the 10 major universities listed above. If you live in a city that has a strong educational reputation for business or engineering, there is a strong likelihood that there are international students in attendance and that 40% of them could be buyers of homes. To capitalize on this, make the university connections to build relationships and at the very least consider bringing in multilingual agents who can speak Mandarin, Hindu, Korean and Japanese.
- Even when your prospect speaks good English, don’t assume that he/she has 100% understanding of what you are saying. Americans speak very rapidly, so SLOW DOWN YOUR PACE OF SPEAKING.
- Ask frequently for confirmation that your listener understands what you are saying. Many will not admit that they don’t understand what you are saying, so ask in a way that will tell you that they get what the point you are making, e.g. “What sort of marketing campaigns do you currently use?”
- Try not to use AMERICAN SLANG TERMS. They will only cause confusion, misunderstanding and potentially embarrassment as they might even have different meanings in another language.
- Gestures can also be misinterpreted. A classic case was former President George H.W. Bush giving the two-fingered peace sign in Sydney, Australia, after the success of the first Gulf War. He did it with his hand facing outward to the crowd, which in Australia means the same thing as a middle finger in the USA. The photo was front-page news in the Sydney Morning Herald the following morning.
- American real estate practices are so much more advanced than much of the rest of the world, so take that into consideration when talking real estate with them. Most don’t have exclusive listings, most don’t have transparent markets, most cannot do neighborhood canvassing (door knocking, flier drops, etc.). Many sell new construction from developers’ showrooms or in huge real estate exhibitions.
- Americans are quick to get into the business discussions whereas international clients will want to get to know you first and engage in small talk or anything other than the business at hand. Therefore, take your time and enjoy the tea or coffee and just relax until you see signs that your client is feeling more comfortable and is ready to change the subject to the business topics.
- Politics and religion are never a good topic to discuss, even in the U.S., so it is always best to avoid these topics as well with your international guests.
- Make sure your supplier network is in place and that you have inspected the quality of their products before you grant your first franchise!
- Inspect all your suppliers’ production facilities before signing with them to ensure that they will be able to support your needs as you expand.
- Only select service providers who have a proven product.
- Ask your master franchisor for a copy of their vendor contract and have your legal team adapt it for your local use and make sure that every vendor has agreed to all terms and conditions and signed it. In addition to time tested compliance issues this will ensure that they will also participate in your ongoing events and annual conferences.
- When negotiating contracts with your vendors, leave them some profit so they will continue to provide excellent service. It must be a win-win deal for both sides.
- Don’t blindly follow the terms of your master franchisor’s current franchise contract used in a mature marketplace. Your legal team and executive staff need to review it from the legal and business contexts of your country as well as for terminology and culture nuances and then ask the master franchisor for permission to make the adaptations for your emerging or immature markets.
- At the time of the signing of the franchise contract, give the new franchisee a summary term sheet outlining the pertinent details of the agreement and have them sign it and place it in their franchise file.
- Have strict enforcement provisions and checklists for the processing of the initial due diligence of a franchise application, the supporting legal documentation and collection of the initial fees.
- Set up your internal accounting system and method to invoice and collect funds before you grant the first office.
- Delinquent franchisees will usually ask for fee reductions and more advertising or consulting support in the same breath. Anticipate this and be prepared with the answers.
- Always first seek to negotiate a financial repayment program with delinquent franchise fees before resorting to legal collections or litigation. Patience will be a virtue in the long run for good franchisees that have had a run of bad luck.
- Never let a franchisee dictate the terms of the contract.
- After all other efforts to resolve legal problems with your franchisee fail, never hesitate to enforce your franchise contract. Unfortunately it is sometimes necessary to terminate a major franchisee from your network as an example to the rest of the franchisees.
- Assign only one corporate executive who is responsible to physically inspect new offices prior to acceptance of the location and control the office layout and décor.
- Assign only one corporate executive to approve and sign off on all outdoor signage prior to ordering and installation at offices. Never hesitate to enforce removal of illegal signage.
- Prior to opening in your franchise region, conduct a legal review of the franchise laws and registrations of all domain names and other entities that might be trading under your brand name. Provide a list of all infringers to your master franchisor as soon as possible and preferably prior to signing your master franchise agreement.
- Don’t always assume that infringers are your enemy. Obviously they liked your concept or brand so look for ways to bring them into your system once you have determined that they are good operators. This is another win-win situation that avoids the costly litigation that will be needed to get them to cease and desist.
- The guiding principle in a successful franchise operation is total transparency. What you do for one franchisee, you must be prepared to do for all the others.
- Don’t overpromise and underdeliver. Rather, underpromise and overdeliver!
- Never set up an organization that is in competition with your franchisees. If you do, make sure the franchisees understand your role and that you will treat your offices the same as theirs with no preferential treatment.
- Adapt and localize the core deliverables such as policy and procedure manuals, training courses, business models, legal documents, financial systems, technology platform and marketing materials before commencing the franchise affiliation process.
- Test every employee on the full terms of the franchised contract and the policy and procedure manuals before they ever get in front of one of your franchisees or a franchise prospect. This will ensure that the same message is given to every franchisee or prospect every time.
- Take time to know who your business partners really are at all levels and have a firm written commitment for the funding before you enter into a master franchise with them.
- You are only as good as the weakest link, so when you have an underperforming staff member, cut them out as early as possible from your franchise team.