Industry Advisor by Alfonso Gordon
RISMEDIA, Nov. 7, 2008-Due to falling real estate values, in addition to the dollar’s weakness against the euro, European buyers are very eager to invest in the U.S. real estate market. Are American real estate brokers and agents prepared to deal with European and other foreign buyers?
Here are a few things to consider:
Cultural Considerations
Confidence. Buyers may not know the country, the people, and most of them may have never done any business in the U.S. Before making the decision to invest, they want to be sure that they are talking with the right professional who will represent their interests.
Language. Most speak English but most likely as a second language. That means that they have enough skills to have a conversation but not enough vocabulary to handle a conversation with technical and legal aspects. They will always prefer to deal with someone who speaks their native language.
Real Estate Industry
Industry Mechanics. The real estate industry in the U.S. is much more structured than it is in the rest of the world. In most cases, buyers are used to working with a lot of real estate agents and working with open listings, and may not know the role of the seller’s and the buyer’s agent. Be sure to explain how real estate works in the U.S., the MLS and how transactions are split between sell side and buy side.
Market Dynamics. Be prepared to share statistics about the real estate market in your area. Price evolution in the last 12 to 24 months, trends, articles from experts, forecasts for the next two to three years, rental markets, etc. Foreign buyers will want to be convinced they are making a good
investment.
Legal and Economic Issues
Legal. Most European countries have a completely different legal system. The role of the notary, registry, titles, etc., could be totally different than what they are used to.
Deal Requirements. Remember that things that are totally normal for an American client (i.e., a property inspection) could be something that a foreign buyer simply has never seen before.
Taxes. Be sure that your client understands the different local, state and national taxes involved in the transaction, as well as the requirements for a non resident to purchase a real estate property in the U.S.
The worst mistake we can make is to think that the buyer comes from a similar real estate market. Our ability to see that, to generate their confidence, and to give them all the information they need will be key in their decision to work with us or not.
Alfonso Gordon recently joined PCMS Consulting to guide their international expansion. He resides in his native city of Madrid, Spain, where he was previously the chief operating officer for ERA Spain. For more information, please visit www.pcmsconsulting.com or e-mail agordon@pcmsconsulting.com.
