Preparing to Engage the International Home Buyer

Engaging international buyers is of increasing importance to REALTORS®, especially those in North America. Why? They are continuing to invest in all 50 states, and from all over the world.

Who are the international buyers?

  • Investing for immigration purposes
  • Interested in diversifying their real estate portfolio
  • Investing for their children to go to school in North America
  • Coming to work or study in North America with significant funds to help the economy.

Where is the international (residential) buyer coming from?

  • Canada – 24%
  • China – 11%
  • Mexico – 8%
  • India and the UK – 6%
  • Brazil, France and Germany – 3%
  • Russia – 2%
  • Japan – 1%

Where are they buying?

  • Florida – 26%
  • California – 11%
  • Texas and Arizona – 7%
  • New York and Georgia – 4%
  • Nevada – 2.5%

These numbers are only from REALTORS®, doesn’t seem to be any government agency tracking these numbers so doesn’t account for new construction, etc.

Questions you need to ask potential international clients to fully understand their needs and help conduct a smooth transaction:

• What are the reasons you would like to invest in real estate in the US? Investment, Income, Immigration, Diversifying Assets, or Residence?

• Who are your attorneys and accountants in the US and Canada? Are they specialists in the process of offshore purchases?

• Who would you seek guidance from for your investment decisions? What are your investment goals?

• Do you plan to live there or rent it out?

• Is your money in the US or Canada already? Is your investment within the allowed amounts by your government?

• Have you purchased property offshore before and if in Canada or in the US is it financed and could it be leveraged?

• Will immigrating to the US or Canada be a part of the home buying plan? If so, where are you in the process of immigration?

Importance of understanding the real estate process – laws are different, business processes are different, and obviously language can be different. Establish a team with an attorney, translator, etc. that can give proper guidance.

• What are the ideals of properties you are looking for?

• Will you be financing the purchase abroad and paying cash here or would you require financing in Canada or the US? If so, do you have bank confirmation of funds and job letters from abroad?

• What are other considerations that you need assistance with? Example – who are the decision makers? One panelist worked with Chinese clients who were buying a home for their daughter for college. The parents were financing the purchase, but the final decision on which home they bought was the daughter’s.

As a REALTOR®, you need to determine if this is going to be a big enough part of your business to make it worth the effort. Because it IS a lot of work and does require additional effort.

67% of international buyers in Miami are from Canada – “If you’ve got sun and sand, you’ve got Canadians!”

Representing Canadians Buying in the US
Contracts work the exact same. Most buyers have some understanding of what it’s all about because it’s likely a second-home or investment property.

One of the biggest disadvantages of working with Canadian buyers in the US is that you get complacent, think that Canadian buyers are the same as US buyers. Differences: No Canadian knows what a short sale is…they don’t use it and they’ve never heard of it. They don’t know HUD, RESPA, Chinese drywall.

Financing is not easy to get without a Social Security Number in a lot of areas.

Residency requirements – two sides to it. how long can a Canadian citizen be out of Canada without getting in trouble? For as long as they want. No restrictions at all. Permanent residents have to be there 2 of the last 5 years. Coming in to the US – can come up to 6 months as long as the US is confident they can support themselves and that they intend to go back to Canada.

Examples of Visas (there are more!):

  • Personal
  • Citizens
  • Permanent Residents
  • Business/Work
  • TN Visa
  • H1 1B Visa
  • L1 Visa
  • E-2 Visa

Tax consequences: taxation in Canada is based on residency. Taxed on worldwide income. So if buying a property in the US they can be subject to the rental income tax, capital gains, estate taxes, etc. The agreement with the US and Canada is such that you don’t have to be double taxed – rental income is taxable in US and Canada, but you can elect to file a US tax return which puts you in a more favorable position than the Canadian. 30% withholding tax. There are some exemptions.

Healthcare: Universal government funded healthcare system. Have to be in the country for 6 months + 1 day (183 days) to retain Canadian healthcare rights.

Insurance: Canadians don’t have hurricanes or tornadoes or earthquakes, so don’t necessarily “get the concept” of hurricane insurance. It’s important to explain this to Canadian buyers. They don’t know the costs or what’s involved.

Buying properties in Canada – there are virtually no residency requirements for buying property in Canada. Shouldn’t be a problem. Requirements in 4 provinces (Prince Edward Island- can’t buy more than 5 acres and a certain amount of shoreline. Manitoba – can’t buy more than 40 acres of farmland without the consent of government. Saskatchewan – not more than 10 acres. Alberta – can’t buy more than 2 lots.

Financing is easier in Canada – down payment is 20-30% for non-residents. If you are a non-resident selling property, you have to let Canada Revenue Agency know and pay a 25% withholding tax. Need a certificate of compliance from Canada Revenue Agency.

More details and a very comprehensive checklist (even government agency contact lists for both U.S. and Canada so you can obtain all the tax/legal information) for foreign buyers are available on the conference web site! Click on the links from the conference schedule on There should be two links.

Does the fiscal cliff impact Canadian buyers coming in to the US? Probably not a concern – this has been happening for a few years and Canadians are actually taking advantage of it.

Great and informative session!

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