Global clients offer vast business potential for Realtors
Realtors who want to expand their client base may want to pursue credentials for working with international buyers. That was the message from Joe Schneider, manager of global business development & outreach for the National Association of REALTORS®.
Schneider was the featured speaker at a Global Real Estate Council meeting last month in the classroom at SEATTLE King County REALTORS®. He was joined by Deniz Kiral, CPA, a tax and wealth advisor at Turquoise Tax Advisory, and Nancy Lee, vice president, commercial lending specialist & regional manager at East West Bank.
Schneider summarized the impact of globalization in the U.S. and local market. Additionally, he offered advice on uncovering global buyers and strategies for working profitably with this dynamic segment.
To underscore the importance of foreign buyers, Schneider cited research indicating they accounted for $92.2 billion in U.S. residential property sales from March 2013 through April 2014.
The mean price of a home purchased by international buyers was almost $397,000 - about $150,000 more than the overall sales price for existing homes. More than half (54 percent) of these buyers bought property worth a quarter of a million dollars and six of every ten international buyers paid all cash when purchasing their home.
Although Realtors worry about housing affordability, the United States is viewed favorably on the global stage. Many foreign buyers believe buying U.S. real estate is not only affordable, but it also represents a secure investment.
Schneider noted rising affluence in China, Canada, India, Mexico and the U.K. is fueling activity. Credit standards in the U.S. also favor buyers who pay with cash.
International business is occurring in every U.S. state, with Seattle ranking 7th among cities with international commercial transactions. New York is tops, followed by San Francisco, Los Angeles, Houston, Chicago and the District of Columbia.
A look at Seattle's demographics suggests strong potential for global business. Data presented by Schneider indicates nearly 18 percent of all Seattle residents are foreign born and more than 22 percent of residents speak a language other than English as their primary language. Among this diverse population, the top countries of origin, based on the number of immigrants, include Mexico, India, China, the Philippines and Vietnam.
To better understand these buyers and what they are seeking, Schneider encouraged his audience to visit realtor.org/global.
Other factors, in addition to relative affordability and diversity that favor Seattle include the convenience of air transportation, tourism (2.8 million overseas visitors annually) and the headquarters of 13 Fortune 1000 companies in Seattle. A multilingual workforce, the high quality of life coupled with an affordable cost of living, and an abundance of foreign language schools further bolster the Seattle area's attractiveness.
The presence of many foreign-based companies also bodes well for Realtors wanting to serve global clients. Together, these companies account for more than 91,000 Seattle-area jobs.
Although Washington is not among top 10 states with international students, those who are here spend $737 million annually, according to research from Institute of International Education.
The trio of speakers emphasized working with international buyers and sellers is different from working with domestic customers. To succeed and thrive, Realtors need to acquire a global skill set.
NAR offers several resources for learning how to find, attract and serve global clients. A key to success, according to Schneider, is creating a network of professionals who offer complementary services. For example, he suggested members of this team include a mortgage broker, a currency exchange provider, an international tax advisor/CPA, an immigration attorney, a business broker, and a business/real estate attorney.
Realtors also need to understand cultural differences and business practices in other countries, along with the home buying process in their clients' countries of origin. A working knowledge of currency and financing options is also advised.
To help Realtors better serve global buyers and sellers while reducing risks, NAR offers a Certified International Property Specialist designation. In addition to ongoing education, that credential includes networking opportunities and an array of professional development tools and resources, including a directory of 3,000 CIPS designees in 45 countries. A search of the NAR directory indicates only 42 Realtors in the State of Washington currently have the CIPS designation.
Concluding the program, Global Real Estate Council leaders Jason Watabe and Mark Kitabayashi outlined plans for a Japan trip for Realtors scheduled for fall 2015.