In real estate, perceptive professionals and home sellers identify potential selling trends and leads ahead of the curve. One trend that has had a resurgence is the influx of foreign investors in the U.S real estate market. “Foreign buyers purchased $102.6 billion of residential property from April 2015—March 2016,” asserted the National Association of REALTORS® (NAR) 2016 Profile of International Activity in U.S. Residential Real Estate. Although that is a decline from the 2014-2015 numbers, that is still nothing at which to sneeze. And, this represents a three percent uptick in the quantity of U.S. homes purchased by foreign nationals.
As a shocker, sixteen percent of agents closing deals with foreign nationals have only been licensed for one year or less. “This is a positive indicator of the strengthening U.S. real estate market, but it also indicates the need for additional training and information for REALTORS® who are interested in cultivating and growing their business in this niche market catering to international buyers and sellers,” concluded the NAR report.
If your “neck of the woods” has a stream of investors from China, Canada, Mexico, India or any other foreign nation, then yes it may be time to brush off your foreign language books or get familiar with Duolingo. But it is also time to enhance your immigration savviness. Real estate is never boring!
“Every Realtor working with Foreign Nationals should realize that each country and client is different,” affirmed Christian Ross, the managing broker of Atlanta’s Village Realty, who is a HGTV House Hunters personality, Atlanta REALTORS Association Director and is frequented by international buyers. Ross continued, “Most countries use the Metric system vs. square feet (the Imperial system) and other small differences like this to large variances, like currency and its fluctuation. They make a huge impact on communication and buying power.”
To keep it all straight, Attorney Steve Maggi, Founder of SMA Law Firm, shares answers to the most pressing questions from foreign real estate investors, local sellers and their REALTORS® below.
Does a foreign national need a specific visa to buy real estate in the U.S.?
Maggi: Foreign nationals can buy U.S. real estate anywhere in the U.S. without actually entering the U.S. or while they are visiting the U.S. In order to manage a property, foreign nationals can hire a proxy, individual or company to manage them. They can even set up LLCs to own and manage them. What they can’t do is run a business for profit from the U.S. without authorization. The property ownership itself does not give them any immigration rights
Do foreign nationals from specific countries get preferential treatment?
- Visa Waiver nationals
- Skilled Worker (Professionals): These countries have their own visa categories: Australia (E-3), Canada and Mexico (TN), Singapore/Chile (H1B1)
- Treaty Trader (E-1) /Treaty Investor (E-2): Nationals from over 80 countries are eligible to launch startup businesses in the US
- Temporary Protected Status (TPS) for foreign nationals currently in U.S. from countries in crisis (humanitarian and/or political). This remedy does NOT cure any status defects like being undocumented or out of status (overstaying authorized stay).
Can my clients get a green card directly just from purchasing a property? (The EB-5 Real Estate Myth)
Maggi: Generally the answer is NO. EB-5 is an immigrant visa category that requires investors to create 10 full-time jobs within 2 years of receiving their conditional green card and real estate investment by itself does not create full-time jobs. Even buying a lot and building out an entire building will not create ten jobs that outlast the construction process. A green card CANNOT be obtained simply by buying a residence. If 10 full-time jobs are not created as a direct result of their investment, they will not qualify for a permanent green card. EB-5 massive-scale projects which build out mixed-use – residential and commercial MAY work and units may be bought as part of the package, but buying a property for personal use DOES NOT work.
What immigration questions should I ask my international clients?
Maggi: 1. What nationalities do you have? This is governed by the passports they hold. Answers will determine what visas they are eligible for and processing times.
2. Are you an employee or an entrepreneur?
3. What are your short and long-term U.S. plans?
4. Are you interested in passive investment?
5. Do you want a temporary visa, a green card and possibly citizenship?
6. What about for your spouse and children?
As a current real estate practitioner and manager, Ross added a paramount seventh question to not neglect, “Questions are powerful. Asking how property is acquired and sold in their country will help you compare markets and cultures and assist with how you research, compile and synthesize market data.“
Sealing the Deal with Foreign Nationals
The bottom line: When working with international clients, do not treat the transaction like it is traditional business as usual. “Extend timelines for contingency periods,” asserted Ross. “Make sure you have a team on hand for each step of the process, from translators to international tax and currency exchange specialists for a smoother transaction,” offered Ross as timeless advice.
Maggi: In order to attract more foreign national clients, it is good to be sufficiently familiar with the different options foreign nationals have to procure temporary and permanent residence in the U.S., and the visa classifications that allow them to reside here and get mortgages. Many times helping them to find a solution to their immigration needs will help you get the client and keep them for the long term, as well as generating more long-term potential referral sources. If you can’t be their problem-solver and resource, they may find someone else who can. Make sure to have someone in your wheelhouse who understands these issues thoroughly in order to be able to maximize your chances of closing the deal and opening the door to an unlimited amount of future clients!
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