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The Illusion of Foreign Buyer’s in the Bonita Springs Real Estate Market
The headlines make for great copy - “The British Are Coming”, “International Buyers Flock to Florida”, “Foreign Buyers Scoop up Florida Real Estate”. There has been enough coverage of the alleged foreign invasion to actually convince the public that it is largely true. Many people have been led to believe that Florida is so full of Foreign Nationals buying up real estate that it could snap off and sink into the Gulf of Mexico.
Listen, I don’t doubt for one minute that we still have our usual amount of European buyers. We may even have a few more Canadian buyers. What I do doubt is a marked increase simply because the dollar is weak against the currency of a few particular countries. Just because there is leverage against a Foreign National’s currency, it doesn’t mean they are taking full advantage of it. The are many more economic conditions that influence a buyers ability and willingness to buy real estate besides the value of their currency against the US dollar.
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Unfortunately, Sellers banking on a foreign buyer bail-out are in for a rude awakening. As a real estate agent in Bonita Springs I have had my sellers ask, “How do we attract foreign buyers?”, “What are you doing to find foreign buyers?” and “How are you advertising to the Europeans?” I offer to anyone that has a desire to have their home appeal to foreign buyers to prepare their home for sale no differently than marketing to local buyers.
- Properly price the home to appraise and stand out in the market
- Prepare the home to be shown by cleaning, repairing faulty items and staging it.
- Use photos and visual tours to attract Internet shoppers.
- Make the home accessible to buyers and agents.
It’s not rocket science. Even if there really was a deluge of foreign buyers and their money was worth more against our dollar, those buyers are not going to over pay for a home without doing research. At what point would anyone think being a Foreign National renders a person unable to make a sound business decision? Buyer’s have access to the same Internet that the Sellers use. The Internet has leveled the playing field. Without even picking up the telephone a foreign buyer can and will:
- Research real estate online prior to their arrive
- Confer with their local real estate agent via email from the comfort of their home to narrow their search and learn about the market and values
- Prepare a list of potential properties to see upon arrival
- Have their agent research values the potential homes they’d like to see for the best possible buys
Let’s not forget, they’ll also have the appropriate CMA - Comparative Market Analysis prior to writing an offer, followed up with an appraisal prior to closing as an aid to verify value of the real estate they choose to buy.
Oddly, exactly the same practices are used by both foreign and domestic buyers to locate and purchase real estate. Further, the foreign and domestic buyers also share another similar trait - they both may have the ability to buy but they still need to be willing to buy for a transaction to come together.
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on Monday, March 17th, 2008 at 4:13 am
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3 Comments so far
Very interesting, I agree we do the same things to attract “any” buyer. Price, location and condition. I think we have our hand in two of those.
Chris - Stopped by to catch up and loved your post. We experienced the same, after all the calls and interest - few were prepared for the taxes and insurance and actual cost of owning real estate here - our properties don’t cash flow - do yours? We’re a good market for 2nd home owners not psuedo investors. As always you tell it like it is.
Chris, I appreciate the de-bunking of the myth that somehow thinks that foreign buyers will simply fly in to “rescue” the US real estate market. Like you correctly indicate, the same issues that make it a good deal for a US buyer will make a transaction viable for the right foreign buyer. It’s our job to provide excellence in marketing and professionalism for everyone. Thanks for a great post!