Real Estate Broker Deals with Foreign Clients Slowing
Real estate broker deals with foreign clients have been slowing, according to a survey conducted by the National Association of Realtors.
Only 22.5 percent of the nearly 3,800 real estate brokers surveyed by NAR reported dealing with at least one foreign client in the 12-month period ended May 2009. The percentage marked a drop of 32 percent from 2007 foreign transactions and 26.2 percent in 2008.
Additionally, only 11.8 percent of the realtors surveyed reported having completed a sales transaction for a foreign client during the same 12-month period. This marked a drop of 18 percent from successful deals in 2007 and 13.3 percent in 2008.
Nevertheless, while the number of brokers reporting a decline in foreign transactions is rising, the number of real estate agents reporting that their foreign real estate activities comprise more than 50 percent of their operations is increasing.
Almost one in ten realtors or 9.5 percent of all realtors surveyed reported that over 50 percent of their real estate broker deals in the past 12 months involved foreign clients, an increase of 8.2 percent from the 2008 survey.
The survey also showed that 5.2 percent of brokers said international transactions comprise more than 3 out of 4 of their real estate sales, an increase from 3.9 percent in 2008.
NAR also reported that brokers making sales to foreign clients are knowledgeable about the culture, customs, language and needs of their foreign buyers because most of them were born in the country of their clients or have parents who came from the same country.
One of the reasons for the decline in foreign sales transactions is the credit crisis. Around 46 percent of foreign buyers paid in cash for their purchases, an increase of 43 percent from the survey in 2008 and 28 percent in 2007.
Approximately 154,000 houses were sold to international clients in the 12-month period ended May, a drop of 9 percent from total sales in the previous 12-mont period.
More than 33 percent of the realtors surveyed said that their deals fell through because the buyers were not able to get loans to finance their planned purchases.
The median home price paid in foreign transactions was $247,100, much higher than the median price of $178,000 for existing homes as of July this year and the $198,100 median price last year.
Despite the gap, foreign buyers spent less for a home this year, compared to last year when $297,400 was the median price in foreign real estate broker deals.
