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Are Your Luxury Listings Magnets for International Buyers?

Aug 25, 2015

Posted by

Laurie Moore-Moore

Laurie Moore-Moore is the founder and CEO of The Institute for Luxury Home Marketing, an international training and membership organization for agents who work in the upper tier. The Institute offers Read more

You’ve just listed a fabulous luxury property and your sellers want to know if you think international buyers might be good prospects for their home.  What do you need to know to answer that question?  First, determine if their home has “international buyer magnetism.”  Then decide if you have the knowledge and tools to effectively target foreign buyer prospects.  Answer “Yes” to both questions and you may have an international buyer in your future.

Evaluating International Demand

Targeting international buyers for your latest luxury listing can be a smart strategy as they are cautiously increasing their investments in U.S. residential property.

The National Association of Realtors reports that foreign clients purchase more than $40 billion worth of U.S. homes annually.  Foreign individuals with visas good for more than six months and recent immigrants purchase an additional $40 billion worth of U.S. residences—for a total of more than $82 billion annually.  While this is not a huge population of buyer prospects, it is a growing one.

The highest priced property sold in the U.S. in recent years was a $100 million property sold to a foreign buyer—a Russian billionaire.

Not all of these foreign-bought homes are luxury properties though.  International buyers are opening their pocketbooks to buy homes in a variety of price ranges—with the average price over $350 thousand.  Further, NAR estimates that about six out of ten of these purchases were all cash transactions.

Source of Buyers

Where do international buyers come from, where do they buy?  If you are marketing a luxury home, might your buyer come from another country?  It’s possible and the probability increases if your home is located in Florida, California, Arizona, Texas, Georgia or New York.  These are the states attracting the most international buyers.

Where are the buyers most likely to come from?  Canada, China, Mexico, and the United Kingdom lead the list on a national basis; however, your location will influence which buyer prospects show the most interest.  Chinese buyers may be attracted to San Francisco, Russians may like Long Island, and Canadian snow birds may flock to Phoenix.

Measuring Listing’s Appeal

To assess your listing’s “international buyer magnetism” ask yourself these key questions:

•  Is my luxury listing geographically desirable?

Location, location, location is a key decision factor for buyers no matter where they come from, but the international buyer may shop using a shorter list of potential locations.  Weather, high visibility resort locations, cities they view as having an international flavor, international business cities, and communities where they have chosen to send their children to university will often define where they buy.

•  What lifestyle(s) does my luxury listing represent?

Some foreign buyers may have a different design aesthetic, may not desire the same amenities Americans seek out, or may have strong privacy and security concerns.  Others may be seeking a “trophy property” that makes a statement about their success.  For which foreign buyer profiles is your luxury listing a match?  Are these the buyers drawn to your area?

•  Will my luxury listing be perceived as a good value?

Savvy international buyers view residential property as an important asset class.  Your home will be viewed as more than just a wonderful place to live.  It will be part of their investment portfolio and they will want to buy future profitability.  However, recognize that value isn’t just about price.  Value relates to location, amenities, quality, design, and other factors as well.  Consider the buyer prospects’ motivations too.  Are they looking to move money outside their country, seeking safety, choosing a seasonal home for part of the year, looking for a work-travel  residence, selecting a home for an ex-pat student, plus a property for the family to use when visiting?  The answers to these questions will tie back to whether your luxury listing has value as a match for their special needs.

•  Can you target international prospects?

Assuming that your listing passes the “international buyer magnetism” test (as outlined by the questions above), then be sure you’ve built some international marketing into your marketing plans for the property.  Placing your listing in Proxio Pro, the international MLS; syndicating the listing information to a variety of luxury home websites with language translation capabilities; using other media with international reach; and networking -- through organizations like The International Real Estate Federation (FIABCI) -- with other professionals who work with an international clientele are just a few ways you might tap into the international marketplace.  And there are lots of others, too.

In the Final Analysis

While the number of luxury homes sold to international buyers is a small percentage of total sales in most markets, recognizing if your listing matches the profile of likely foreign buyers coming to your city is key.  And understanding how to position the residence and target the foreign buyer (as well as the U.S. buyer) might make you the deservedly “lucky” luxury real estate professional who closes a deal with a wealthy buyer.