The number of houses purchased by U.S. border neighbors accounted for almost one quarter of all foreign home-sale purchases last year. According to NAR’s 2015 Profile of Home Buying Activity, 14 percent of these homebuyers are from Canada and 9 percent from Mexico. Canada’s $11 billion and Mexico’s almost $5 billion sales contributed to a total of $104 billion in home purchase volume by foreign buyers.

Foreign national interest in the U.S. housing market and inbound corporate global mobility activity is likely to remain high. Brokerage-based relocation departments may be encouraged to develop specialized assistance for the foreign purchasers most prevalent in their regions.  Not all U.S. regions benefit from this interest, but if yours is an area that does, consider the particular challenges they face to create a specialized assistance program to support and facilitate their U.S. orientation, home finding and home sale activities.

Working with international buyers requires multi-dimensional focus. These buyers need consultative-style professionals who understand and communicate cultural and sales-process differences, and can provide access to country-specific expert affinity partners. Familiarity with financial and tax issues are also valued. 

While corporate employers may support some inbound U.S. purchases, most home-buying activity is likely prompted by non-job-related reasons, (think Canadian “snowbirds”).  But not all opportunities are with buyers.  Most relocation policies don’t encourage home purchase while on assignment in a new country and many corporate-sponsored inbound assignees are renters.  But assignee renters also benefit from culturally oriented destination and settling-in support. They can also become future buyers if assignments become permanent. 

Focus Your Concierge-style Support

The more you understand your area’s foreign buyers’ needs, the easier it is to develop your home purchase information package and affinity network. For example, NAR’s report finds Canadian buyers tend toward vacation and investment properties in suburbs and resort areas, with an average value of about $380,000. Buyers from Mexico primarily purchase single-family homes in residential suburban and urban areas averaging around $275,000. Canadians primarily favor locations in Florida, Arizona and Nevada while half of all Mexican buyers purchase properties in Texas, California and Florida.

If Canadians are most prevalent in your market, for example, information about mortgage options, currency/exchange-rate information, taxation information and assistance determining a property’s potential investment performance are valuable inclusions. Because the U.S. home-sale process differs in some ways from Canada’s, your information could graphically depict major differences in the U.S. using a timeline of key activities and individuals involved. You could develop a Canadian-specific brochure, ebook or use a website tab for access to this information. Consider including contact information for Canadian tax or other experts who can help with the consequential decisions confronting Canadian buyers, especially those without access to a vetted professional network within the U.S.   

Canadian taxation issues are complex and there are many important aspects for a Canadian buyer in the U.S. to consider.  Questions like: What is the buyer’s resident status in Canada? What is the optimal way to take title to the property? Is the property a primary residence or a vacation home that will be rented? Non-compliance with rental and residency time limits can have tax implications. Canadian experts in this area can save your clients money by providing the counsel necessary to make knowledgeable decisions. 

Obtaining a mortgage is another area that differs significantly for Canadians as it’s more time-consuming and expensive in the U.S.  Although many pay cash, over 20 percent of Canadians use mortgage financing (almost 50 percent of Mexican buyers use mortgage financing).  Having Canadian-specialized lender partners in place, such as RBC Bank, could provide invaluable assistance for helping Canadian buyers navigate the process effectively. 

Facilitating foreign buyers’ orientation and understanding of the process and professionals involved in the U.S. will help set realistic expectations for timing, closing costs, title insurance and other aspects. If your region is not a preferred destination for U.S. border neighbors, other foreign national interest may exist locally for your market specialization consideration. According to NAR’s 2015 Profile of Home Buying Activity, other major foreign purchasers in the U.S. are China, India and the UK. While 50 percent of all sales occurred in Florida, California, Texas and Arizona, foreign purchases occur nationwide. Other major U.S destination states for foreign buyers include New York, New Jersey, Washington, Michigan, Illinois, and Hawaii.

Find more information about your or another state’s prevalent foreign buyer groups by checking its inbound foreign population activity and foreign homeownership data at realtor.org/reports/state-by-state-international-business-reports. 

Peg Guinta, CRP, is Projects Director for RIS Consulting Group. For questions, please email peg@rismedia.com.