2012 Survey of International Home Purchases in Greater Miami Conducted October 2012 by NAR Research for MIAMI Association

of REALTORS

Summary of Responses

Lawrence Yun, Senior Vice President Jed Smith, Managing Director, Quantitative Research Gay Cororaton, Economist
October 2012

Outline of Presentation
Introduction and Summary Survey Results
Experience with International Transactions Buyer Characteristics Realtor Expertise /Designations Major Issues Reported by REALTORS

Conclusions

Introduction and Summary

Survey Conducted During Sept -Oct 2012. Questions Focused on Experiences During Past Twelve Months. Received a Total of 924 Responses. Analysis Indicates that International Sales Are
Important niche market for a number of REALTORS However, survey data indicates that the volume of international transactions and purchases eased in 2012. But average purchase price is higher and most transactions for cash. The international market remains a challenge for many, as REALTORS deal with financing, language /cultural issues. Most Miami REALTORS have designations and years of experience, but noted the need for greater expertise and professionalism.

REALTOR Experience with International Transactions

Most Miami REALTORS Have Worked with an International Client in the Past 12 Months

Forty-one Percent of Miami REALTORS Closed Six or More Transactions in 2012

Personal Contacts and Previous Clients Important in Obtaining Clients Online Marketing Also Important

Thirty Percent of Miami REALTORS Had Six or More International Clients in 2012

21 Percent of Miami REALTORS Had 51% or More of Their Transactions with an International Client
Only 24 Percent Had No International Transactions

Four Percent of Miami REALTORS had More than 51 Percent of Their Business as Commercial

A Few Clients Were Involved in Both a Residential and Commercial Transaction

Buyer Characteristics

About Half of REALTORS Had International Clients Who Did Not Purchase a Property

Financing and Could Not Find a Property the Two Major Reasons for Not Purchasing

Sixty-seven Percent of REALTORS Had at Least One Client Who Purchased a Property

Average Purchase Price Up Slightly

Condominiums Continued to Be the Most Prevalent Choice

Commercial Purchases Concentrated in Retail and Multi-Family Properties

Mortgages Account for Low Percentage of Transactions

Most Buyers Purchased Property in a Central City/Urban Area

The Top Four Countries of Client Origin: Venezuela, Argentina, Brazil, Canada

The Top Tier Countries of Client Origin

The Second Tier Countries of Client Origin

REALTOR Expertise and Comments

Sixty-six Percent of REALTORS Have 6+Years of Experience

REALTOR Designations

Eighty-six Percent of Miami REALTORS Report Constant or Higher Percentage of Clients Who Are International

Exchange Rates Continue to Be Seen as Important in Affecting the Demand for U.S. Property

Security of Investment and Location Are Most Important Factors In Purchasing a Miami Property

Major Comments Reported by Realtors

Miami and Floridaperceived as highly desirable.
Climate, amenities, international ambience. Legal protections and security from U.S. laws.

Limited Mortgage availability/dollar financing issues. Residence requirements/immigration issues. Language and diversity of culturescan be issues in completing transactions.
Diversity of expectations. Language capabilities important.

Slow Short sales process is frustrating buyers. Need for greater expertise/knowledge/professionalism in dealing with international clients.

Why International Clients Buy in Miami: Quotes from Miami REALTORS

South Florida is an attractive area partially because of its; 1- Proximity to Central & South America 2- Multi-cultural composition. 3- As an alternative "Home" for problem nations. 4- Currency or monetary restrictions in other nations, makes SF a safe haven. 5- Investor looking for higher return and safe investment. Besides the value of the dollar, the political situation and insecurity problems in almost all Latin American countries is the most important factor that influences my international clients to buy properties in Miami/South Florida. Ever since May when the US opened commercial ties with Colombia, 80% of the people that apply for Visa's get them. These people find it a dream to be able to own property in the US. Florida is the closest to South/ Central America & because of the language and weather they feel more at home here.

They were Russian buyers that bought in sunny isles to have a luxury place to visit and maybe move here to give their kids a better life.

Why International Clients Buy in Miami: Quotes from Miami REALTORS

A lot of potential business out there in South America and Europe.

I have seen the buyers evolve from predominantly Latin Americans and New Yorkers to now Canadians, Italians, Finnish, English. I think it's a good thing to see such diversity in the market! I work with clientele from Israel and Mexico and many of them purchase on cash basis.

Must target UK, Germany, Russia, China and South America specially Brazil and Colombia
Investors are increasing due to low values and good rental income.

Issues Reported by Realtors

As a Realtor, we have numerous requests from international buyers; a lot of them are having problems getting the US DOLLAR because of government regulations- if they do not have that regulations the sales will go up as a rocket Concern about the unfriendly TSA employees at the Airport in Miami

FIRTA is becoming an issue since they pay so much in property tax and have no exemptions, they believe it unfair
Foreign buyers would like more interested to invest in Miami if they could access any kind of status related to their residence here Language skills are very important because international clients want to do business in their language, not in English. We must offer complete customer service such as helping them with the money transfers, providing them the right sources for legal, furniture shopping, accommodations, etc. We need the short sale process to be faster. I have various clients in process of purchasing these and it takes so long that some give up.

Issues Reported by Realtors

The industry could benefit greatly, if there was a more defined and clear methodology in the way Title is taken. Many Attorneys differ on BVI vs. REVOCABLE TRUSTs.
Real Estate Agents handling Foreign Nationals should truly be "Certified" & specially licensed to do so as the need to be educated in many areas that affect their clients is of great importance to our real estate community. They need to have the right network of real estate & immigration attorneys & Foreign National tax specialists or they should be directed to refer their prospects to appropriately licensed & trained Realtors. RCA should create a referral program for International agents to promote better and secure our properties to Latin America. Many of the international clients were very hesitant to work with a Realtor for past negative experiences dealing with lack of professionalism, lack of knowledge and no expertise.

Conclusions
International Sales are a Significant Market for Miami for location and investment security reasons However, survey data indicate volume of international transactions appeared to have eased in 2012:
- decline in percentage of REALTORS having an international transactions ( 77% in 2012 vs.

83% in 2011)

-decline in percentage of REALTORS having 6+ international clients (30% in 2012 vs. 34% in 2011) -decline in percentage of REALTORS who had at 51%+ of their transactions as international (21% in 2012 vs. 26% in 2011) -decline in percentage of REALTORS who had at least one international client who purchased property (67% in 2012 vs. 69% in 2011) -decline in percentage of REALTORS who reported an increase in the percentage of clients who are international ( 45% in 2012 vs. 49% in 2011)

Conclusions
Although volume indicators are lower, the average purchase price is higher ; 72 percent of Realtors report prices at greater than $ 150,000 compared to 67 percent in 2011 Key buyer characteristics

- Venezuela, Argentina, Brazil and Canada are major countries of origin - Condominiums are still the preferred choice, but there was greater interest in singlefamily detached homes (20% in 2012 compared to 16% in 2011)
International sales market presents unique challenges. Financing: Many buyers pay cash because credit scores do not transfer easily on an international basis. The exchange rate continues to be viewed as a factor influencing the decision to purchase.

Bridging the language gap and enabling international clients to understand how the U.S. property market works remains a challenge for many
Perceived high property taxes, titling problems, and immigration/residence were also issues mentioned by respondents Failure to find a property may indicate additional opportunities for Realtors to provide improved service beyond current offerings.

Conclusions
Commercial transactions appear in a number of cases to be connected with visa and immigration opportunities. Many contacts initiated via personal relationships.
Although personal contact is most favored, online marketing is increasing. For REALTORS with only an occasional sale, some study of foreign cultures and customers may improve communications.

Most Miami REALTORS Have International Expertise and Experience

-Many Realtors with international practices have a variety of designations indicating specialized expertise. -About two-thirds of Realtors have been in business for more than 5 years.

End of Presentation. Thank you.