Not every real estate professional or seller should market their home to international buyers.
I understand you would like to increase sales by targeting buyers from abroad.
Who doesn’t want to increase sales and grow a business further?
However, certain factors will influence your chances of success in marketing homes to international real estate buyers.
So, what are these factors, and how do you market to these foreign buyers?
The best way to market to international real estate buyers is to run a real estate business in a state with high diversity and popularity as a tourist destination, such as Florida, California, Texas, Arizona, and New Jersey.
Doing so gives you a higher chance of getting referrals from your local clients acquired by standard real estate marketing methods.
So, in today’s article, you will learn about the benefits of targeting international real estate buyers, the statistics and the demand of the international real estate market, and which overall strategy is the most effective to market to them.
Benefits of Targeting International Real Estate Buyers
There are several reasons and benefits for homeowners and real estate professionals (e.g., investors, realtors, brokers) to also target international real estate buyers to sell their homes.
By doing that, you can increase the number of leads generated, and especially real estate professionals can increase their sales.
Another benefit is diversifying your business risk by serving international real estate buyers, so you are not completely dependent on the national or local market.
The last benefit, although probably not very significant, is that you might be able to sell some homes at slightly higher prices due to different individual perceptions of value from international real estate buyers.
This might result from the foreign buyer not having complete access to all the local market information.
Statistics and Demand of the International Real Estate Market
The National Association of Realtors surveyed from April 5 to May 3, 2019, sent to 150,000 randomly selected realtors.
These are the results of the study:
The median purchase price for most foreigners is $280,600, and 8% of these foreigners purchased real estate of $1M or more.
Almost half (41%) of the foreigners paid all cash. The Chinese ($13.4 B), Canadians ($8.0 B), Indians ($6.9 B), Britons ($3.8 B), and Mexicans ($2.3 B) were among the top 5 international real estate buyers.
In 44% of the cases, they buy in suburban areas.
Florida (20%), California (12%), Texas (10%), Arizona (5%), and New Jersey (4%) were among the five most demanded locations.
In 76% of the cases, the preferred homes were single-family homes and townhomes.
The primary purchase purposes were for residential investments and vacation purposes.
Only 17% of the purchases came from leads generated by websites and online listings.
Most (60%) of the leads came from personal contacts, former clients, and referrals from former clients and business contacts.
International real estate buyers financed their homes in the following ways:
|All-Cash||U.S. Mortgage||Home Country Mortgage
Another situation to consider is that foreign purchases of American homes declined by 36% in 2019. (source)
It doesn’t mean there is no market for international real estate buyers anymore, but some demand has changed.
So, when dealing with international markets, you depend more on political changes related to immigration and tourism or international travel.
The latter can be restricted due to various circumstances, such as Covid.
Not directly related to foreign buyers, but in 89% of the cases, buyers purchased homes through a real estate agent or broker (source).
We can assume the same or even higher percentages for international real estate buyers.
In international transactions, more hand-holding is needed.
Buyers likely prefer to go on a safe route with a real estate agent or broker than to mess up a real estate transaction because of stumbling over some legal, cultural, or communication pitfalls due to a lack of knowledge or experience with the respective local market.
Which Strategy Is the Most Effective to Market Your Home to International Real Estate Buyers
From the statistics above, we might gather that the primary targets should be China, Canada, India, the United Kingdom, and Mexico.
But the main focus on foreign buyers from China might not be the best idea anymore because of political constraints and the decline in demand (36% in 2019).
Only 17% of the purchases came from leads generated by websites and online listings, and 60% from personal contacts, former clients, and referrals from former clients and business contacts.
So, you might conclude at first glance that the focus should be on personal contacts.
But this could be a classical fallacy.
What do these numbers say?
Yes, because 60% of the leads came from those networking activities, it could mean that this is the best way.
But it could also mean that polled realtors have mastered those networking activities to generate the most international real estate buyer leads.
But they may haven’t yet mastered doing the same through websites and online listings.
It could also mean that the realtors who were up to participating in the poll from the National Association of Realtors are, in their large majority, using networking to generate leads.
So the likelihood of getting 60% of leads from networking activities is quite high.
The better question would rather be the following:
Suppose 60% of international real estate buyer leads came from personal contacts, former clients, and referrals from former clients and business contacts. How were these personal contacts or former clients generated?
Let’s look again at the major destinations with the most demand from international real estate buyers, which are Florida (20%), California (12%), Texas (10%), Arizona (5%), and New Jersey (4%).
What do all these states have in common that could influence the ability of a realtor to network with potential foreign buyers?
First, they belong to the most diverse states of the U.S. (source).
Second, they also belong to the most popular tourist destinations in the U.S. (source).
There is a high correlation between the state you are operating in as a realtor or broker and the chances of being able to market also to international real estate buyers.
Considering this, what is the most likely scenario for acquiring foreign buyers then?
Because of the higher diversity of the mentioned states, more local buyers or tenants with a migration background live already in the respective state.
These real estate clients are mainly acquired by the usual real estate marketing methods used locally.
For example, you generate a buyer lead already living in your state from Canada via Facebook Ads or content marketing with SEO who purchases a house with your help.
Suppose you did a good job and have a satisfying after-sales service nurturing this past client in place.
In that case, there is a high likelihood that this former client will refer you further to a Canadian friend who is still living in Canada and looking for a home.
Then, this friend buys a home with your help, and you successfully make a sale in the international real estate market.
Your real estate business in the states mentioned above increases your chances of meeting potential buyers with international connections.
What happens when you are a real estate agent or broker active in the vacation rental industry?
You also happen to come across tourists that might fall in love with your local area and start considering the purchase of a second residence for vacation purposes.
Again, if you do a good job, these vacationers may refer you to friends looking for properties.
Well, as you can see, I could go on and on with examples that show that the respective state from where you are operating is a significant factor in acquiring foreign buyers.
Marketing to international real estate buyers is likely done by indirect methods such as networking and results from a locally run real estate business in a favorable state.
What happens when you have a local advantage by operating in a high diversity state, which at the same time is also a popular tourist destination?
International real estate buyers are generated due to doing a good local job and having more access to these buyers with friends abroad already living in the state.
So, you could get even better in this networking part to acquire even more foreign buyers (not easy to test and to measure from a marketing perspective).
But I also see a good opportunity to take advantage of your location and target them directly.
And you can target them directly via your website, online listings, and other online marketing channels (remember that only 17% of purchases came from these methods).
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.