2013 Survey of International Home Purchases

Miami-Dade-Broward, Florida
Conducted by NAR Research for MIAMI Association of REALTORS
Summary of Responses


Lawrence Yun, Senior Vice President
Jed Smith, Managing Director, Quantitative Research
Gay Cororaton, Economist
Data Gathered September/October 2013

Outline of Presentation
About the Survey and Major Conclusions
Survey Results
Experience with International Transactions
Buyer Characteristics
Miami-Dade-Broward REALTOR Designations
Major Issues Reported by Miami-Dade-Broward
REALTORS
Summary of Key Findings




About the Survey
Survey Conducted During Sept 23 Oct 11, 2013.
Questions Focused on Miami-Dade-Broward REALTOR
Experience During Past Twelve Months.
Invitation was sent out by Miami Association of REALTORS
to its members
Received a Total of 1044 responses.

Miami-Dade
83%
Broward
16%
Others
1%
Area of membership of REALTOR Respondents
in Past 12 Months--2013 Miami-Dade-Broward, FL
Survey
Major Conclusions
International sales are an important niche market for a number of Miami-
Dade-Broward REALTORS.
Survey data concerning transactions for the 12 months ended Sept-Oct 2013
indicates a slight increase in the volume of international transactions and
purchases and an increase in the purchase price.
Majority of international clients are foreign residents (Type A). Resident
foreigners (Type B transactions) are also important.
There are discernible differences between Miami-Dades and Browards
international clients regarding the volume of international transactions,
mode of contact , purchase price , type and area of property purchased, top
tier countries of client origin, and reason for buying
Data indicates an increase in members who have less than 5 years of
experience.
Many respondents hold designations (e.g., CIPS, CRS, GRI, BPO) and have 6
or more years of experience.
The international market remains important though challenging for many,
requiring that REALTORS deal with financing, language and cultural issues.


Miami-Dade-Broward REALTOR Experience
with International Transactions


Most Miami-Dade-Broward REALTORS Have Worked with an International
Client in the Past 12 Months
75%
83%
77% 77%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013
Percent of Miami-Dade-Broward REALTOR Respondents Who Worked With an
International Client in Past 12 Months
The 2010-2012 surveys covered South Florida.
A Larger Percentage of Miami-Dade REALTORS Have Worked with an
International Client in the Past 12 Months
78%
71%
66%
68%
70%
72%
74%
76%
78%
80%
Miami-Dade Broward
Percent of Miami-Dade-Broward REALTORRespondents Who Worked With an
International Client in Past 12 Months
Most International Clients are Non-Resident Foreigners *
But Share is Lower Compared to Past Years


Type A clients are non-resident foreigners. They reside in another country and do not plan
to live permanently in the United States.
Type B clients are recent immigrants/resident foreigners/temporary visa holders looking
for primary residence in the United States.
52%
8%
39%
60%
8%
31%
44%
10%
46%
0%
10%
20%
30%
40%
50%
60%
70%
Type A Type B Both
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Type of International Client Purchasing in Miami-Dade-Broward, FL
2010 2011 2013
50% of Miami-Dade-Broward REALTORS Closed Six or More
Transactions in 12 months ending Sept-Oct 2013


0 1 to 5 6 to 10 11 to 15 16 to 20
More than
20
2011 14% 42% 22% 8% 5% 9%
2012 14% 46% 18% 10% 6% 7%
2013 10% 40% 21% 12% 6% 11%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
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Total Number of Transactions, Domestic and International,
Closed in Past 12 Months
2012: 41% closed 6+ transactions
2013: 50% closed 6+ transactions
Personal Contacts, On-line Presence, and Previous Clients Are Important in
Obtaining Foreign Clients
41%
26%
6%
1%
15%
1%
4%
7%
44%
25%
5%
2%
14%
2%
3%
5%
Personal Contacts
Previous Clients
Business Contact Ouside Country
Business Contact in U.S.
Online Marketing
Newspaper/yard sign
Walk-in, open house, random call
Other
How REALTORS Get International Clients
2012 2013
Largest Source of Clients
Miami-Dade: Personal Contacts
Broward: Previous Clients
47%
23%
6%
2%
14%
1%
2%
5%
32%
40%
1%
1%
13%
4%
5%
4%
Personal contacts
Previous clients
Business contact outside of the country
Business contact in the U.S.
Online marketing
Newspaper/yard sign
Walk-in, open house, random call
Other
How REALTORS Get International Clients
Miami-Dade Broward
38% of Miami-Dade-Broward REALTORS Had Six or More International
Clients in 2013
1 2 3 4 5 6 7 8 9
2011 13% 15% 17% 9% 12% 20% 5% 3% 6%
2012 18% 17% 15% 10% 12% 18% 4% 3% 5%
2013 9% 14% 15% 11% 12% 22% 7% 3% 6%
0%
5%
10%
15%
20%
25%
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In Past 12 Months, Number of International Clients, Regardless of
Whether They Purchased Property
2012: 30% had at 6+ intl clients
2013: 38% had at 6+ intl clients

About One-Third of Miami-Dade-Broward REALTORS had a Majority of
Their Transactions with an International Client.
0% (None) 1% to 5% 6% to 10%
11% to
15%
16% to
25%
26% to
50%
51% to
75%
76% to
100%
2011 21% 21% 8% 6% 8% 11% 13% 13%
2012 24% 22% 8% 4% 8% 13% 10% 11%
2013 8% 21% 11% 5% 10% 10% 15% 20%
0%
5%
10%
15%
20%
25%
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In Past 12 Months, Percentage of Transactions with an International
Client
2012: 21% had 51+% of transactions with intl clients
2013: 35%
37% of Miami-Dade-Broward REALTORS Have Some Percentage of Their
International Business That is Commercial
0% (None) 1% to 5% 6% to 10%
11% to
15%
16% to
25%
26% to
50%
51% to
75%
76% to
100%
2011 68% 17% 5% 1% 2% 2% 2% 3%
2012 68% 16% 5% 2% 3% 2% 1% 3%
2013 63% 20% 5% 3% 3% 2% 2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
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Percentage of International Business That is Commercial
Miami-Dade Has A Greater Percentage of REALTORS Who Have Some
Percentage of International Business That is Commercial
0%
(None)
1% to 5%
6% to
10%
11% to
15%
16% to
25%
26% to
50%
51% to
75%
76% to
100%
Miami-Dade 61% 20% 5% 3% 4% 2% 2% 3%
Broward 70% 20% 5% 3% 1% 0% 2% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
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Percentage of International Business That is Commercial
42% of Miami-Dade-Broward REALTORS Were Involved in Both Residential
and Commercial Transactions
0% (None) 1% to 5% 6% to 10%
11% to
15%
16% to
25%
26% to
50%
51% to
75%
76% to
100%
2011 63% 19% 4% 3% 2% 4% 2% 3%
2012 61% 21% 6% 3% 2% 3% 2% 2%
2013 58% 21% 6% 3% 3% 4% 3% 3%
0%
10%
20%
30%
40%
50%
60%
70%
Percent of International Buyers Involved in both a Residential and a
Commercial Transaction
Buyer Characteristics
International Prospects Do Not Mean International Sales
71% of Miami-Dade-Broward REALTORS Had International Clients Who Did Not
Purchase a Property
62%
53%
51%
71%
2010 2011 2012 2013
In Past 12 Months, Did You Have International Clients Who Chose Not to Purchase a
Property?
Could Not Find a Property and Cost of Property Were
Two Major Reasons for Not Purchasing
23%
14%
2%
11%
7%
10%
8%
15%
11%
28%
22%
2%
9%
5%
6%
6%
14%
9%
Could not find a property to purchase
Cost of property
Loss of home country benefits
Property taxes
Insurance costs
Exposure to U.S. tax laws
Immigration laws which prevent foreigners from living in the
U.S continuously year round
Could not obtain financing / Not able to qualify for mortgage
Other, please specify.
Why Clients Chose Not to Purchase
2012 2013
Could Not Find a Property Was Reported More in
Broward
26%
23%
3%
10%
4%
6%
6%
14%
9%
37%
17%
1%
3%
7%
6%
6%
15%
9%
Could not find a property to purchase
Cost of property
Loss of home country benefits
Property taxes
Insurance costs
Exposure to U.S. tax laws
Immigration laws
Could not obtain financing
Others
Why Clients Chose Not To Purchase
Miami-Dade Broward
81% of Miami-Dade-Broward REALTORS Had at Least One International
Client Who Purchased a Property
0 1 2 3 4 5 6 to 10 11 to 15 16 to 20
More
than 20
2011 31% 17% 14% 11% 5% 7% 9% 3% 1% 2%
2012 33% 16% 15% 10% 6% 7% 9% 1% 1% 2%
2013 19% 16% 19% 11% 8% 7% 12% 4% 2% 2%
0%
5%
10%
15%
20%
25%
30%
35%
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In Past 12 Months, Number of International Clients Who Purchased a
Property in the U.S.
2012: 67 percent
2013: 81 percent
Median Purchase Price of a Typical Client Up in 2013
$100,000
or less
$100,001
to
$150,000
$150,001
to
$200,000
$200,001
to
$250,000
$250,001
to
$300,000
$300,001
to
$400,000
$400,001
to
$500,000
$500,001
to
$750,000
$750,001
to
$1,000,000
$1,000,001
or more
2011 17% 16% 12% 12% 11% 10% 8% 7% 4% 5%
2012 14% 14% 14% 12% 11% 10% 9% 7% 4% 5%
2013 8% 11% 10% 11% 9% 11% 9% 11% 9% 11%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
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Distribution of Purchase Price of the Properties Purchased by Typical Client
2012 median price range: $ 200-250K
2013 median price range: $300
International Clients Typically Purchased at Higher Price in
Miami-Dade Compared to Broward
Miami-Dade Broward
Median Price Range of International Buyers in Miami-Dade-Broward
$ 300,000 - $ 400,000
$ 200,000- $250,000
Condominiums: The Major Choice
Detached Single-Family of Increased Interest
Detached single-
family
Townhouse/row
house
Condo/apt Time-share
Commercial
Property
2011 16% 9% 71% 0% 5%
2012 20% 12% 64% 0% 5%
2013 23% 9% 64% 0% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Type of Property Purchased by Typical Client
Condominiums Are The Major Choice, But More so in
Miami-Dade
20%
9%
67%
0%
4%
36%
10%
50%
0%
4%
Detached single-
family
Townhouse/row
house
Condo/apartment Time-share Commercial
Property
Type of Property Purchased by International Client
Miami-Dade Broward
Commercial Purchases Concentrated in Retail and
Multi-Family Properties
Office Industrial Retail Hotel Land Multi-family
2011 17% 18% 24% 9% 2% 30%
2012 21% 17% 17% 3% 4% 39%
2013 21% 11% 24% 5% 6% 35%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Type of Commercial Property Purchased by Typical Client
Next to Multi-family--
Miami-Dade: Retail Property
Broward: Office Property
21%
9%
25%
5%
5%
35%
23%
15% 15%
4% 4%
38%
Office Industrial Retail Hotel Land Multi-family
Type of Commercial Property Purchased by International Client
Miami-Dade Broward
70 Percent of Miami-Dade-Broward REALTORS Report that Fewer than 10
Percent of International Clients Obtain a Mortgage
0 - 9 % 10 - 19% 20 - 29% 30 - 39% 40 - 49% 50 - 59% 60 - 69% 70 - 79% 80 - 89%
90 -
100%
2012 72% 6% 4% 4% 2% 5% 1% 2% 1% 3%
2013 70% 7% 5% 4% 3% 4% 1% 2% 1% 4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
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Percent of Transactions With a Mortgage
Most Buyers Purchased Property in a
Central City/Urban Area
Central city/urban
area
Suburban area Small town/rural area Resort area
2011 63% 19% 1% 17%
2012 64% 20% 1% 16%
2013 66% 20% 1% 13%
0%
10%
20%
30%
40%
50%
60%
70%
Predominant Area in Which Typical Buyer Purchased a Property
Most Buyers Purchased Property in a
Central City/Urban Area, More so in Miami-Dade
69%
16%
1%
13%
51%
36%
1%
12%
Central city/urban area Suburban area Small town/rural area Resort area
Predominant Area In Which Typical Buyer Purchased Property
Miami-Dade Broward
The Top Tier Countries of Client Origin
15%
13%
12%
8%
9%
4%
4%
3%
14%
11%
11%
8%
8%
5%
4%
4%
0% 2% 4% 6% 8% 10% 12% 14% 16%
Venezuela
Argentina
Brazil
Colombia
Canada
France
Mexico
Italy
Distribution of Responses Regarding Countries of Origin of International Clients Who
Purchased Property
2012
2013
The Second Tier Countries of Client Origin
Respondents also reported international purchases from these
countries:

Peru Russia
Spain Dominican Republic
United Kingdom Chile
Ecuador Germany
China Costa Rica
Honduras Nicaragua
India Panama
Others, not identified
Miami-Dade and Broward: Top Tier Countries of Client Origin
14%
12%
12%
8%
7%
6%
5%
4%
3% 3% 3%
3%
Miami Dade: Top Countries of Client Origin
14%
11%
10%
9%
7%
5%
4% 4%
3%
3%
Broward: Top Countries of Client Origin
Miami-Dade and Broward:
The Second Tier Countries of Client Origin
Respondents also reported international purchases from these
countries:

Miami-Dade : Chile , Ecuador, United Kingdom, Germany
Honduras, China , Nicaragua , Costa Rica, India,
Others
Broward: Costa Rica, Ecuador, France, Russia, Spain,
Germany, Mexico, Australia, Chile, Panama,
Japan, Nicaragua, Portugal, Others

REALTOR Expertise and Comments

57% of Miami-Dade-Broward REALTORS Have 6+
Years of Experience
Less than 1
year
1 to 5 years 6 to 10 years 11 to 15 years 16 to 20 years
21 years or
more
2011 10% 22% 32% 13% 7% 15%
2012 11% 23% 30% 16% 7% 13%
2013 21% 23% 25% 13% 8% 11%
0%
5%
10%
15%
20%
25%
30%
35%
Years of Experience as a REALTOR
2012: 66% had 6+ years of experience
2013: 57% had 6+ years of experience
Miami-Dade Has A Greater Percentage of REALTORS
With Less than 1 Year Experience
22%
23%
25%
11%
8%
11%
16%
24%
25%
19%
5%
11%
Less than 1 year
1 to 5 years
6 to 10 years
11 to 15 years
16 to 20 years
21 years or more
Years of Experience as a REALTOR
Miami-Dade Broward
Designations Held by Miami-Dade-Broward REALTOR
Respondents in the 2013 Survey
16%
4%
2%
5%
17%
3%
17%
9%
4%
4%
15%
12%
24%
44%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
CIPS
CCIM
SIOR
RSPS
CRS
CRB
GRI
CLHMS
ABR ABRM
SRES
BPO
ePro
TRC
Other, please specify
Percent of REALTOR Respondents Having Designations
41% of Miami-Dade-Broward REALTORS Reported an Increase
in the Percentage of Clients Who Are International
Increased
Stayed about the
same
Decreased
Not applicable, have
been in business less
thana year
2011 49% 34% 9% 8%
2012 45% 41% 6% 8%
2013 41% 35% 6% 18%
0%
10%
20%
30%
40%
50%
60%
Changes in the Percentage of Clients Who Are International in Past Year
REALTORS Reported Exchange Rates as Important in
Affecting the Demand for U.S. Property
Not much of an effect Moderate effect Very significant effect
2011 13% 40% 47%
2012 21% 43% 36%
2013 20% 43% 37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Effect of Exchange Rates on International Clients
Profitability of Investment and Location Noted as Most Important Factors In
Purchasing a Miami-Dade-Broward Property
a secure
investment
(safety reasons)
a profitable
investment (yields
income)
a desirable
location (for
vacation, visits,
etc.)
Other, please
specify.
2011 40% 35% 20% 5%
2012 27% 34% 34% 5%
2013 28% 38% 31% 3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Most Important Factor Influencing a Purchase by an
International Client of a Miami-Dade-Broward, FL Property
Most Important Factor For Purchase
Miami-Dade: Profitability of Investment
Broward: Desirable Location
31%
38%
29%
3%
16%
36%
43%
4%
a secure investment
(safety reasons)
a profitable
investment (yields
income)
a desirable location
(for vacation, visits,
etc.)
Others
Most Important Factor Influencing A Purchase
Miami-Dade Broward
Major Comments Reported by Miami-Dade-Broward
REALTOR Respondents in the 2013 Survey
Miami-Dade-Broward is perceived as a highly desirable for location and
investment purposes.
Costs of paying Home Owner Association fees, property taxes, and
mortgage insurance are a concern for foreign buyers.
Access to U.S. financing is difficult; although most buyers pay cash,
REALTORS may need to discuss credit issues with some potential buyers.
Immigration requirements are a concern to some prospective buyers.
Some potential international investors were reported as not being able to
buy property because of the low inventory of available homes.
Language and diversity of cultures can be issues in completing
transactions.
Diversity of expectations between potential purchasers and U.S. customs.
Language capabilities important.
Some REALTORS noted an increased need for substantial expertise,
knowledge, and professionalism in dealing with international clients.


Summary

International Sales are a Significant Market for Miami-Dade-Broward for location
and investment purposes

Survey data indicates an increase in the volume of international transactions and
purchases in the 12 months ending Sept-October 2013:

-an increase in the percentage of REALTOR respondents having 6+ international clients
(38% in 2013 vs. 30% in 2012)

-an increase in the percentage of REALTOR respondents with 51%+ of their transactions
as international (35% in 2013 vs. 21% in 2012)

-an increase in the percentage of REALTOR respondents who had at least one
international client who purchased property (81% in 2013 vs. 67% in 2012)

The majority of clients are Type A (foreign residents), but the share declined; only
67 percent of respondents reported Type A clients compared to about 72-76
percent in the 2010 and 2011 surveys.


Summary, Continued

The price paid by a typical client increased; the median price in 2013 is
about $ 300,000 compared to the median price range of $ 200,000-
250,000 in 2012.
Buyer characteristics
- Venezuela, Argentina, Brazil, Colombia, and Canada accounted for 52
percent of reported international purchases;
- Condominiums were more preferred than single- family homes,
accounting for about 64 percent of purchases ;
- Mortgage financed purchases accounted for a minor portion of
international sales
Many contacts are initiated via personal relationships.
Although personal contact is most favored, online marketing is increasing.
For REALTORS with only an occasional sale, some study of foreign cultures
and customers can help to bring the transaction to a successful closure.



Summary--Continued


Most Miami-Dade-Broward REALTOR Respondents Have International
Expertise and Experience
Respondents reported having a variety of designations indicating
specialized expertise.
Approximately 57 % of respondents reported being in business for
more than 5 years compared to 66% in the 12 months ending Sept
2012.

International sales market presents unique challenges.
- Learning another language can be an advantage.
- Personal contacts/referrals are necessary to building an international client base.
- Familiarity with tax /immigration/financing regulations is important.
- Foreign clients are discouraged by additional costs such as HOA and insurance fees,
so helping the client understand the rationale for these costs is critical.
End of Presentation. Thank you.