International Real Estate Buyers
International real estate buyers are increasingly attracted to property in the United States, according to a report by the National Association of Realtors® titled “2010 Profile of International Home Buying Activity.” Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, the state of the economy and perceptions of economic trends continue to drive international interest in owning real estate in this country.
- The U.S. is a top destination for international buyers from around the world
- Foreign buyers understand the value of owning real estate in the U.S.
How Much Do They Buy?
$66 billion of U.S. residential property, or 7 percent of the entire residential real estate market.
That’s the amount purchased between April 1, 2009 and March 31, 2010 (the length of the report) by foreign buyers including those with residency outside the U.S. as well as recent immigrants and temporary visa holders.
From Which Countries?
International buyers came from 53 countries around the world. The top four countries are:
- Canada (largest buyer group in the last three years)
- Mexico (growing)
- United Kingdom (formerly ahead of Mexico)
- China/Hong Kong
Where Do International Purchasers Buy?
International real estate buyers were reported in 39 states. The market is relatively concentrated, however, with four states accounting for 53 percent of the volume:
- Florida (22.5 percent)
- California (12.5 percent)
- Arizona (9 percent)
- Texas (9 percent)
The vast majority of purchases are made in suburban areas (50 percent) and the central city/urban areas (27 percent).
Two factors seemingly important to international real estate buyers when purchasing property in the U.S. are proximity to their home country and the convenience of air transportation. For example, Florida typically attracts European, Canadian and South American buyers while the East Coast attracts Europeans. Asian buyers are primarily interested in West Coast real estate while Mexican buyers are active in the Southwest.
What Do They Buy?
A majority of international buyers (66 percent) purchased single family detached homes. Condos were also attractive to international buyers, who significantly out-bought condos percentage-wise over their U.S. counterparts, 23 percent to 7 percent.
How Do They Buy?
Foreign buyers are reported as paying cash 55 percent of the time. In contrast, 8 percent of U.S. buyers purchased their homes with only cash (no mortgage financing).
How Much Do Foreign Buyers Pay?
Generally speaking, international real estate buyers participated closer to the upper end of the market. The median price paid by international buyers was approximately $219,400 during 2009/2010, the reporting period of the profile cited at the top of the previous page. In contrast, the overall median price for existing home sales in the U.S. was $173,000 during the same period.
The Importance of Finding the Right Mortgage Lender
Buying a home is probably the most expensive purchase you will ever make. Choosing the right mortgage lender can reduce the stress and cost of your undertaking. There are four steps that will get you there. The four steps that I will discuss involve; finding a reference, calculating the costs, paying attention-doing your research and negotiating. Following these steps will make buying a home less stressful and more successful!
What better way is there to find a lender than getting a reference from someone you know. You always want to make sure that you are dealing with a reputable company. Talk to your friends, family, neighbors and co-workers who have recently bought homes. Ask them about their mortgage experience. With a short list in hand, start calling all of the lenders. The local companies who are familiar with the market, will be able to give you more accurate estimates. Then do a search online for competitive programs to see if you can get a better deal.
You also want to make sure that you calculate the costs correctly. Ask each lender about the interest rates, programs, points and a list of the fees and costs. Make sure that you ask each lender the same questions. This way, when you are done, you can compare the costs.
Alway pay attention to what is going on in the market and do your research. Does the lender seem to know his/her business? Will he or she be able to answer all of your questions? Are there signs that the operation is disorganized? Is the lender available when you call, and are your calls returned in a timely manner? If you are not comfortable with your chosen lender, then move on to someone else.
Once you have found the right mortgage lender, it is always a good Idea to negotiate the interest rates and fees. The lenders offer many include extra costs added to the interest, points or fees. This money then goes into the loan officer’s pocket after closing. Ask if any of the costs can be reduced and taken out completely. Then consider locking in the program so that the mortgage rates don’t rise. Go with your gut and make sure you do your research. For more information about choosing the right lender, please visit our website at www.OwnACondo.com.
If you do not follow these very simple steps, then you could end up wasting a lot of time and money through this already expensive process. Take the time to do it right and the rewards and benefits will follow.
