It’s now easier for Americans to buy property overseas

WASHINGTON - June 29 2008 - Much has been made about the growing number of foreigners buying real estate in the States.

No one knows exactly who is buying what or how much. But nearly one in three U.S. realty agents report working with customers from other countries, and almost half of those worked with three or more international clients — some with more than 10, according to the National Association of Realtors.

And that was before the housing bust. So it’s probably safe to say that with the sinking dollar, the trend has only become stronger as foreigners try to take advantage of sagging prices, especially in Florida and California, the states they find most desirable.

Indeed, for many agents, foreign buyers “are the gift that keeps on giving,” says David Michonski of Coldwell Banker Hunt Kennedy in New York City and the association’s liaison for international operations. “Once you have one foreign client, you usually have many more.”

But there’s another, albeit smaller trend that hasn’t received much attention — that of Americans buying property in prime vacation and retirement spots outside the U.S.

Americans had always been able to buy property in other countries at a fraction of what it would cost for a similar place in the States, especially in the Caribbean and Latin America. But with the sagging dollar, money doesn’t go as far anymore. However, when currency-exchange rates return to normal, if they ever do, U.S. citizens looking to live in another country are likely to find it a far less adventurous task than it was just a few years back.

“Right now, most international activity is from foreigners buying in America, but soon it will begin going the other way,” Michonski says. All the infrastructure for buying real estate is in place for what he expects to be a “mega-trend.”

For one thing, brokers in 32 countries now belong to the International Consortium of Real Estate Associations, which has created a transactional referral system and has adopted a code of ethics that members in all nations have agreed to follow.

There also are numerous websites where would-be buyers can search for property. GlobalPropertyGuide.com, for example, offers research and information on buying residential property in 131 countries.

“It’s important for a residential investor to be able to see what his likely return on investment will be. What his taxes will be. To be able quickly to check whether the laws are landlord-friendly. To survey the inheritance laws,” says publisher and editor Matthew Montagu-Pollock of GlobalPropertyGuide.com. “All this is now available, for almost every country in the world, on our site, without any marketing material or any attempt to sell you anything — just the facts.”

And now, Deutsche Bank is offering American-style financing for people who want to own a beachfront villa in Belize or a house in Honduras.

“This is clearly the trend of the future,” Michonski says. “Deutsche Bank won’t be the last to do this.”

International buying by U.S. residents has always been limited by the inability to secure familiar terms. “The No. 1 reason people don’t pull the trigger,” says Nicholas Farina, business-development manager in the global investment bank’s cross-border lending department, “is they can’t find the friendly financing they are used to getting here in the States.”

Deutsche Bank has created a cross-border lending program in which people who are citizens of one country can get permanent and construction-to-permanent financing for properties in another nation.

It’s now easier for Americans to buy property overseas
by Lew Sichelman | United Feature Syndicate