An influx of inbound and outbound international property buyers presents an opportunity for San Diego real estate agents who know how to do business with them.
Members of the Greater San Diego Association of Realtors’ Global Real Estate Council (GREC) and real estate professionals who work with international clients urged Realtors to attain their Certified International Property Specialist (CIPS) designation if they want to do business with international clients.
Mark Marquez, Realtor with Pacific Sotheby’s International Realty and past president of SDAR, moderated a panel discussion Wednesday at the Harbor House Restaurant. Marquez attained his CIPS designation last year and said he’s seeing an increase in inbound and outbound business.
The CIPS designation helps Realtors relate to different cultures, Marquez said, offers an overview of the global real estate business and provides tools to protect Realtors.
Linda Lee, broker with Keller Williams Realty and immediate past president of SDAR, said it’s important to earn the trust of Chinese buyers, for example, who will refer their family and friends. She said the San Diego market is “huge” and relatively inexpensive compared to Los Angeles and San Francisco, where Chinese buyers are also investing.
Florida, California, Texas and Arizona, accounted for 58 percent of total international clients for the 12 months ending in March 2013, and California represented 17 percent of the total, according to the National Association of Realtors (NAR).
The study also found that about 53 percent of reported purchases by Chinese buyers were in California, and about 62 percent of buyers from Mexico bought in California and Texas. The five markets of greatest interest to potential Mexican buyers were San Diego; El Paso, Laredo, San Antonio in Texas; and Las Vegas, as of March 2013.
Lee said there’s some confusion when real estate agents start asking Chinese buyers about a $50,000 annual limit on wiring money. She said there are exceptions for some business owners, and Chinese banks are “very flexible” when lending money to Chinese nationals.
“If they feel uncomfortable when you start questioning them, they’ll probably find another Realtor,” Lee said.
Luis Mendoza, Realtor at Century 21 Award and Mexico liaison, was born in Mexico City and moved to San Diego when he was 14. He describes himself as bilingual and bicultural, and said it’s important to know how to treat international clients and to learn the culture.
He and Lee both said that their clients want an agent who provides a “one-stop shop” — someone who can advise them in real estate decisions but also tell them where the pharmacy is and which doctor to go to.
In addition to attaining the CIPS designation, agents who aren’t native to China and Mexico can work with agents who know the language and culture. Marquez doesn’t speak Mandarin, but he hired an agent who does, which has helped him to better connect with those international clients.
Once a Realtor lands an international buyer, it’s important to know the ins and outs of the transaction. One of the biggest pitfalls in these transactions is determining the source of large deposits, said Ryan Kirk, vice president and senior mortgage banking officer at BBVA Compass Bank. Lending can be difficult if a client has been moving money around without a paper trail, he said.
Ives Ward, mortgage loan originator at CTBC Bank, agreed that money transfer can be a difficulty in the transaction, as well as not having the right documentation.
International buyers should also know about the different visas they can use, said Steven Ryznyk, EB-5 immigration attorney at SanDiegoBizLaw. There’s the EB-5 visa, as well as the L1, B1, EB-1 and so on.
When advising clients, Ryznyk said agents should explain the difference between a B1 visa — for a visitor for business — and a B2 visa — for a visitor on vacation. Those visiting on a B1 visa can examine business properties, invest and stay in the country after changing their status.
The panel agreed that one of the biggest differences between working with international and domestic buyers is the amount of time a transaction takes.
Omar Lima, director at Baja Title, said most of his clients are Americans buying properties in Mexico. He said he tries to bring the service in Mexico that Americans are used to, but the timing is almost always different.
Tony Anton, vice president of marketing for Eaton Escrow, said the transaction can go smoothly in Mexico, but it won’t go as quickly as American buyers might expect. Kirk said when he’s working with international clients, he knows to ask for more time and said real estate agents should manage the expectations of their buyers.
Other differences include the roles of the escrow company, the involvement of a notary, and the need for title insurance, Lima said. Anton said deals in Mexico are similar to those on the East Coast, where parties meet at table closings to exchange keys and sometimes gifts.
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