Drawn to its luxurious waterfront properties, hot spot status and unparalleled cultural diversity, more international buyers are seeking property in Miami. What will it take to make these affluent clients yours? Having an understanding of their cultures and languages is a start, but you must also explain hurricanes, U.S. tax laws and our mortgage system.
By Tiffany Rainey
Appropriately dubbed the Magic City, Miami and its sister city across the glistening waters of Biscayne Bay, Miami Beach, have a bewitching quality. Whether it is the palm trees and endless stretches of white sand or the thriving nightlife and indulgent sense of luxury, the cities draw visitors and residents from all over the globe. The result is a confluence of cultures, a melting pot of languages and diversity of people unmatched by most other cities in the United States.
Regardless of the cultural origin of current and would-be residents, South Florida’s most thriving cities have a knack for attracting the most discerning of the world’s clientele, including those looking for a new place to call “home” or a sound investment.
As the region’s cultural prominence grows, with the popularity of Art Basel on Miami Beach and development of the much anticipated Performing Arts Center in Miami’s downtown core, local agents are finding that the world’s most elite international buyers are taking notice and still have a place in their hearts, as well as their portfolios, for the seaside cities.
“It’s a cosmopolitan and international hot spot for the wealthy and jet set crowd,” says Roy Hansen, an agent at SOL Sotheby’s International Realty. “There’s outstanding nightlife and cutting-edge architecture and design. Culturally, we are in tremendous growth.”
Hansen, who credits his extensive list of contacts to an alpine skiing career and involvement in the international art scene, says that over 70 percent of his clients are European and have been aggressively investing in the city in recent years. With a specialization in waterfront luxury properties on Miami Beach and its most exclusive islands, Hansen attracts clients chasing the tropical allure of the city’s world-renowned reputation of opulence and extravagance.
“People are impressed in Europe when you tell them you are living in Miami,” says Hansen. “That was not the case many years back. Miami is really one of the most well-known spots in the world right now.”
It also helps to have a name like Sotheby’s behind you as the company is known for providing the utmost in luxury real estate throughout the world. Hansen says Sotheby’s reputation puts foreign investors, who might otherwise be slightly weary of international transactions, at ease.
“My clients feel very comfortable with our company since they already have a positive experience with the name and appeal abroad,” he says. “Every sophisticated buyer knows Sotheby’s as a brand globally.”
The natural resources Miami Beach has to offer also attract European clientele, says Hansen. Chief among them is the region’s easy access to the water.
“My clients already know how scarce waterfront properties are in Europe and know the value of it on long-term gain,” Hansen says. “Europeans know how to get the most out of the lifestyle of Miami. Being on the water is considered a great luxury in Europe.”
Martha Tabarly, an Urban Land Realty agent who works her magic on the other side of the bay by supplying Miami’s developers with enough pre-sale buyers to keep the city’s urban boom in full momentum, agrees that waterfront property is a huge draw for those coming in from overseas.
“Foreign buyers like to be part of the South Florida lifestyle,” says Tabarly, who manages sales along the Miami River as well as in Coconut Grove. “They want centrally located buildings with full amenities,
preferably on or near the water.”
According to Tabarly, Miami’s growth is also among the factors that many buyers consider when looking at investments and homes in the city. “If the buyer comes from an urban environment, public transportation
is key to their decision,” she says. “They see how the city is changing in scale and understand the need of a public transportation system.”
Tabarly has also noticed that though the condominiums she lists are equally accepted by all foreign buyers, sometimes there is a slight difference in what attracts buyers from different regions of the world.
“Generally, Europeans like to purchase the best and most expensive units,” she explains, “whereas South Americans prefer smaller and lower end units.”
South Florida’s beautiful landscape and expanding cities deserve much of the credit for attracting a wide variety of international buyers. But as any agent knows, even the most coveted properties with the best features don’t sell themselves.
“I identify with the European needs and lifestyle of my high-end clients.” says Hansen, who relocated to Miami from Norway in 1994. “There is always a difference in how we Europeans connect with each other.”
Hansen can also converse in several European languages, including Swedish, Danish, German, Italian and his native, Norwegian. Being multilingual, though not necessary, helps tremendously in dealing with clients who may not speak English as a first language.
“Being able to communicate with foreign buyers in their language gives them much comfort and confidence,” says Tabarly, who speaks both Spanish and English. “This is a meaningful investment for all of the foreign buyers, and I want them to feel at ease and at home.”
And, as more people from foreign countries make Miami and Miami Beach home, those seeking the reassurance of familiarity in making a transition to the city feel more comfort in doing so.
“Being born in Colombia and coming here at a very young age, I experienced a cultural shock when I arrived to this city,” Tabarly says.
“But times have changed, and Miami is becoming a big metropolis very receptive to new cultures.”
Nelson Gonzalez, a top-producing agent and senior VP of Esslinger-Wooten-Maxwell, agrees that Miami’s multi-cultural environment is a big help in attracting buyers, especially those from South America.
“Wherever they are from, people definitely feel more comfortable in a city where others speak their language,” says Gonzalez, who specializes in single-family homes in many of Miami Beach’s multi-million dollar neighborhoods.
But even those who seem to have no problem luring buyers from all corners of the world have to deal with the usual and, sometimes, unique worries carried by those who come to the area.
“Hurricanes are one of the common concerns,” says Hansen.
“The way we deal with it is to explain that, historically, the chances are not high that we will have a direct hit with a Category 5 hurricane, like Hurricane Andrew.”
Tabarly says the differences in procedure and financing can cause apprehension for buyers entering a foreign market for the first time. “For the foreign buyer we need to put more emphasis when detailing the process, since they might not be familiar with the financial, credit qualification and mortgage aspects of the industry,” she says.
Even though international buyers are required to put an extra 10 percent down when financing a property, the advantages of buying pre-construction are often the reassurance hesitant buyers need.
“They can plan together with our preferred lenders how they are going to structure the closing at the end of construction if they want to live in the unit,” Tabarly says. “If they want to sell, we will offer a resale program where they will be able to realize their investment.”
Gonzalez’s says his clients differ from Tabarly’s in that they rarely, if ever, have to worry about financing, but that investment return is also a concern when deciding whether to invest in the local market.
“One of the issues is that when they sell, the United States government holds 10 percent of the selling price,” Gonzalez says, attributing the freeze in funds to the FIRPTA law enacted in 1980. “It’s used to pay the [property] taxes.”
Gonzalez says though many buyers are initially agitated by the fact that they won’t receive their complete returns immediately, when the basis for the law is explained in detail, they usually acquiesce.
“They have no choice,” he says, noting that whatever remains after taxes is returned to the seller.
As the ever-thriving market proves, the big picture far outweighs the small annoyances for foreign investors. In the end, the drive to be part of what is now perceived as one of the world’s most desirable regions is not tempered by the payment of a smaller percentage, or the threat of a tropical storm.
As Miami continues to realize its potential as a world-class hive of metropolitan activity, and Miami Beach retains it exclusive Deco charm, the distinct international flavor and cultural charisma of the cities only continues to grow, as does their appeal to the worldly investor.
Senior VP, Esslinger-Wooten-Maxwell Inc. Realtors
Agent, SOL Sotheby’s International Realty
Realtor Associate, Urbanland Realty