Foreign Nationals Buy Homes in Florida

By Christine Davis:

Florida real estate popular with foreign nationals.

Talk abounds about foreigners buying homes here in Florida. A survey released by the National Association of Realtors late summer said that of the $48.8 billion Florida sales in 2010, $12.7 billion were to foreigners. Arizona, California, Florida and Texas accounted for 58 percent of total US residential home sales to non-resident foreigners in 2009 / 2010, with Florida accounting for 31 percent of total US residential home sales to non resident foreigners in that time period.

Other facts reported:

  • Approximately 25 percent of all sales in Florida were to foreigners in the 12 months ending June 2011.
  • Nearly all sales were all-cash.
  • Foreign purchasers buy homes, median approximately $174,700.
  • Foreign purchasers bought because of good values in US housing market, helped by the weaker dollar.
  • Canadians lead, with the UK now less important. Brazil and Venezuela have become more important.

Representatives of Sotheby’s International Realty, Waterfront Properties and Illustrated Properties report that they have programs and affiliations to help foreign nationals buy homes here in the United States.

Mark Griffin of Sotheby’s does not classify sales for foreign nationals as “an uptick” in interest, but rather,  he’s observed a “fairly consistent” level of interest.

“A year after we first started to see a decline in real estate sales in 2007, a lot of foreign buyers came in. Prices here were falling and their currency versus the weakening dollar was in their favor, and that’s continued. But then we had the global real estate market place falling — bubbles in UK, Ireland and Spain. People who’ve been hit domestically are less likely to invest internationally, since they are putting out fires at home.”

For example, he said, Orlando was very popular for UK buyers, and although that market is still active, it has slowed.

Rob Thomson of Waterfront Properties said he’s “definitely” seen more European buyers in the last two years, and although Miami was and is a hot spot, he’s seeing the trend moving to the north. Another trend he noted: “Ninety percent of the sales involve  people who have retired going back into business again, spending more time here and needing a home.”

His agents help foreign nationals go through the hoops: navigate the cultural differences and understand the requirements of US closings and help with financing, which they often find frustrating, he said.

Marilyn Rabbitt, Illustrated Property’s director of relocation, notes a fair degree of interest from prospective Canadian home buyers. However, she said, those people have to find financing, and that’s not so easy.

Anders Johncke, a mortgage loan originator with Group One in Jupiter said he’s seen more international buyers this past year than in the all the other years he’s been in this business combined (since 2001).

“Our foreign national loan rates are generally better than the rates the buyer might see overseas,” he said. “International buyers look at the U.S. economy and the real estate market and see that it’s a good time to buy. Also, they see that Palm Beach County is an attractive place in which to live.”

Johncke gives potential buyers a checklist of what they’ll need to provide. He works with them to determine their timeframe regarding their sale and he aims for the process to move smoothly and without surprises. For example, recently a client, whose property was scheduled to close in 30 days, met the deadlines because the all the paperwork was in order.

Main requirements are:

1. Since the loan will cover only 40 to 50 percent of the price of the house, the international buyer must have the cash for the down payment in a U.S. bank account.

2. Credit reports that will be pulled must prove that the foreign national has strong credit abroad.

3. They must provide a motivation letter, explaining why they wish to live in the United States.

“Everything is subject to final approval, of course, – the bank must sign off on it, but we are getting these loans done.”

Copyr. Christine Davis

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Christine Davis

About Christine Davis

Christine Davis is a freelance writer who covers real estate, homes, health and science.