Introduction

There isn't a real estate agent or a home seller who hasn't dreamed – starry eyed – of the international buyer, waltzing in to pay for their property listing in cold hard international cash. International buyers are traditionally pictured as wealthy home buyers in the market for luxury homes – and some of them are – but the opportunity goes well beyond luxury.

This paper takes a look at some of the facts around international trends in real estate and the current options for marketing properties online to international buyers. Our findings point to an opportunity that is already making a big impact in our business, one that is clearly growing, but difficult to measure and containing significant problems related to data management.

The Opportunity

The most recent Profile of International Home Buying report published by the National Association of REALTORS® in June 2013 showed International home sales in the U.S. reached their second highest level in recent years. The total market is estimated at $68.2 billion, comprising nearly 6% of the total real estate market in the United States.

THE TOTAL INTERNATIONAL MARKET IS ESTIMATED AT $68.2 BILLION

International buyers are motivated to purchase real estate in the United States because it is a comparatively favorable market, with affordable inventory and more freedom from political complication. And the buyers are a diverse group; the idea that international buyers are only interested in luxury property is a myth. With more than 50% of international property sales under $250,000, the international opportunity is clearly much broader than the lofts and palaces of Miami and New York. For example, parents of international students who study in the United States are taking the opportunity to invest in housing for their children during their four-year stay instead of shelling out big bucks on student housing and rentals.

So far, international real estate business seems to rest in the hands of a relatively small segment of our agent population – in the same NAR report, only 27% of REALTORS® reported that they had worked with an international client in the prior year.

The Challenges

One of the interesting statistics revealed in the paper is that 29% of international clients who didn't buy said it was because they couldn't find a house. This could be a result of the lack of accurate U.S. listing resources marketed and tailored to international buyers.

In the United States, we have worked hard to address the problems caused by unmanaged listing distribution. Several years ago, we started "sweeping back the ocean." Brokers and MLSs moved to MLS-connected platforms for syncing listing information from the MLS with online publishers. We started requiring publishers to sign agreements that protect content owners from misuse of listing data, and demanding consumer traffic metrics from publishers so that brokers, as owners of the listing content, have transparency into exactly how each publisher performs and have access to the marketing intelligence that is built off of our listing content.

It was a lot of work, but we did it because we regard listing content as a valuable asset of the listing brokerage, and because we have a deep investment in the standards for our business and the value of representing our industry with the highest level of professionalism.

WE REGARD LISTING CONTENT AS A VALUABLE ASSET OF THE LISTING BROKERAGE

In other countries, we're playing a different ballgame. The battle to protect listing information would be a foreign idea in countries where listings are "open listings" and nobody has the exclusive right – or responsibility – to market a property accurately and effectively. Companies who syndicate listings to international publishers today are doing so without protections in place for the data.

Without a standard platform like ListHub to manage the process, fixing these problems will be much more difficult than it was in the United States. What is a REALTOR® to do when the interior photos of a home they sold five years ago are still showing up on a website in France? Picture this REALTOR® making a long distance call to a French publisher - a six-hour time zone difference away - trying to convince the website it remove the photo because she owns the picture. And imagine this conversation taking place in French. It sounds daunting, to say the least.

Add to this the challenge of measuring the results of online advertising overseas. Most international publishers require a fee just for a basic listing display – forget sending your listing out there for free and crossing your fingers – brokers and agents who participate will be required to invest their hard earned dollars in these opportunities, so understanding the consumer traffic gained from international advertising will be paramount.

Read Part 2 now!