08/27/08

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Overseas buyers bolster sagging market

Adache Real Estate president Adam Adache says foreign buyers come to South Florida because of the weak dollar and stability of property investments in the United States.

South Florida real estate brokers have long known that the international market is thriving. However, while the domestic housing market was booming, few did anything to tap into this lucrative market. But times are changing. Quickly.

"Now that we've seen prices drop and the dollar continues to weaken, foreign investors, particularly Europeans, are coming to South Florida looking for vacation properties," says Mike Pappas, president of Miami-based Keyes Co.

"Florida is a safe haven for many South Americans, particularly since the area is so accepting of all different cultures," he says. "That acceptance," says Pappas, "is why many wealthy Mexican buyers are coming to South Florida as well."

But Pappas' view is not universally embraced.

"South Florida is not as attractive to international buyers as it used to be, because the international markets still read the bad news and watch CNN like we do," says Adam Adache, broker/president of Adache Real Estate LLC in Fort Lauderdale. "But they do have other motives for buying here, so you can still find investors abroad. Some people in Latin countries want to get their money out of an unstable economy, and they deem the United States as a safe place for the long term. Also, people from some European countries like to buy here for vacationing because their currency is worth so much more. That makes for a cheap vacation home. Each country has different reasons," says Adache.

According to the Profile of International Home Buying Activity by the National Association of Realtors, some 26 percent of all international home transactions took place in Florida.

For many investors, the weak dollar offers opportunities to buy properties at lower prices than ever before.

"The world is getting smaller," says Timo Khammash, managing partner of Engel & Volkers, a German-based real estate franchise that has expanded into the United States, specifically South Florida. "We've had to work hard because the press in Europe is not the best about Florida, but we have credibility, so our positive public relations helps," he says.

With the new market conditions and a pervasive global view, it's vital for a brokerage to boost its international presence.


Connections

Brokers who want to tap into the international market would be smart to take advantage of the tools offered through different associations and organizations.

"I recommend that agents achieve the designation (CIPS) and join the Certified International Property Specialist network of the National Association of Realtors (NAR)," says Kimberly A. Kirschner, president of Kirschner Realty International Inc. in Hollywood. "NAR has reciprocal agreements with foreign associations, and representatives of the associations routinely attend the annual and mid-year NAR meetings. This allows U.S. Realtors to meet international real estate professionals without leaving our country."

In addition, agents may consider joining FIABCI, the International Real Estate Federation, based in Paris. "There are regional and international meetings of FIABCI as well and a chapter in the United States," says Kirschner, who specializes in new construction and condo-conversion developments.

"These organizations give you the branding you need," says Pappas.


Recruiting

Recruiting quality sales associates is also important.

"Many sales associates come from other countries and bring with them a wealth of contacts," says Kirschner. "Brokers must recognize the value of those contacts."

"You must find brokers and sales associates in your community who have relationships with people in the countries you're courting," Pappas agrees. "We have 1,500 sales associates, and about 800 are non-U.S. born. There are subcultures in South Florida that you must look into. Just like with the luxury home market, if you want to sell luxury homes, you have to have someone living in those luxury markets. If you want to reach the Venezuelan market, you have to hire Venezuelan sales associates," he says.

Pappas recommends putting advertisements in the local community newspapers that reach the segment you would like to reach. For example, "You can recruit through local magazines. There are Russian and Chinese magazines in South Florida. You don't have to go to the different countries to find agents from those countries."

In fact, when Pappas recently opened a Doral branch, he met with the 40 sales associates who'd been hired. "Only one was born in the United States, and only three were of Cuban descent. Some 36 of the 40 associates were not American or Cuban, which is exciting because it proves that South Florida has done what it's set out to do – embrace diversity."


Exposure

Once you find the associates that will help you serve your target markets, "You must get the word out about opportunities in Florida," says Khammash. "Find Web sites that fit the profiles of the people you want to attract." Khammash also recommends attending real estate trade shows in the areas in which you want to work. "The SIMA (Salon Immobiliario de Madrid) show in Madrid is a very important one to attend if you're looking to reach the Spanish market."

Kirschner agrees. "As a broker, you must put together opportunities for sales associates to participate in different associations and trade shows. Many brokers will have a booth for their agents so they can defray some of the expense. These shows allow you to find the contacts you need in those markets." Kirschner adds that there are trade shows in almost every country, so brokers should carefully choose the market segments they'd like to reach and plan to attend trade shows in those markets.

"It's not an easy thing [to break into the international market], but with persistence you can do it. In many countries, it's all about relationships," says Adache. Both joining the local organizations and networking help build credibility, which brings a wealth of buyers and investors who trust in you and your business.