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Original Photograph by Paul Myers
Photo Illustration by Cindy Couling
Real estate becomes a global commodity
By Jean Newton
With the advent of technology, the world has become a smaller place, and the real estate industry has responded with a focus on a global perspective, as boundaries between countries fade. At the National Association of Realtors' Midyear Legislative and Trade Expo, attended by more than 7,500 realtors and guests, the topic of global real estate was high on the list. The international forum explored methods for practicing real estate in a global market by bringing together panelists from around the world, including Naresh Malkani, a Realtor and chief executive officer of India Properties Com Pvt. Ltd., Pune, India, and Robert D. Hatcher of Hatcher & Eiland Inc., Marble Hill, Ga.
Malkani noted that the growing number of consumers worldwide have become empowered by using the Internet and are more educated about real estate. Boundaries are shrinking as the economies of the world become more linked to one another.
"The technology-empowered consumer is a different creature than he was three or four years ago, and effective marketing strategies need to take account of this. In addition, the distinctions between domestic and international commerce are increasingly blurred," Malkani said.
Malkani and the other panelists urged realtors to take advantage of multiple resources offered through the National Association of Realtors that can help them make global transactions smoother and to develop partnerships with professionals who can translate cross-cultural factors, such as local tax codes, laws and regulations.
Additionally, the panelists agreed that major trade expos and meetings are important tools for networking and developing international contacts as well as learning how to deal with international transactions.
"Boundaries really are disappearing," said Realtor and panelist Robert Hatcher. "The expatriate Indian community resident in the United States is a big market for many realtors. On the other side of the coin, the United States expatriate business and retirement communities in countries from India to Costa Rica, represents a whole new market area many realtors have never thought of."
The National Association of Realtors has been a motivating force in international real estate for some time, said Silicon Valley Association of Realtors President Jeff Barnett of Alain Pinel Realtors in Los Gatos. "[National Association of Realtors] has been formulating and leading coalitions with multinational real estate organizations, public international organizations and U.S. entities concerned with foreign investment in real estate for many years now," he said.
Barnett cited the National Association of Realtor's work as an advocate for private property rights as an example. The association is a leader in advancing the right to own, transfer and use real property. The philosophy has transferred well to international real estate business, he said. In addition to providing technical assistance, the association has been instrumental in sharing the U.S. real estate model with international real estate organizations, and in forging relationships with foreign practitioners.
Currently, the National Association of Realtors maintains reciprocal agreements with more than 35 real estate associations in 33 countries.
Technology remains the connection and catalyst to bring the world closer together. Today, the Internet allows information exchange at any time of the day or night anywhere in the world, wherever there is computer access. Realtors can share information on a property; and consumers can see photos and email questions without leaving their home or office. With real estate information at the touch of a keyboard, extensive time and travel is minimized.
Nancy Goldcamp, a Realtor with Coldwell Banker in Palo Alto, works with clients over the Internet from as far away as Hong Kong. She believes the Internet makes her job easier and saves time for her clients.
"One can sit in Hong Kong and view the interior of homes on the Net. It makes the pre-purchase trip easier, she explains. "I have sat on the phone with clients who are on the East Coast; and we are both on the same website. We viewed 30 to 40 properties and eliminated the ones that had no appeal. We essentially created the tour over the phone, and when they arrived two days later, they already knew what they were going to see."
Goldcamp, who recently sold a house to a couple from New York via the Internet, took photos of the exterior and interior digital photos of the property and sent them to her clients. After they reviewed the photos, they decided to make an offer. Goldcamp presented the offer with a 48-hour contingency so that the buyer could see and walk through the property.
"The wife flew out the next day, loved the house, removed the contingency the following day and now lives in Menlo Park," said Goldcamp. "I have a friend who sold an Australian family a house this same way." It is important to make sure people from out of the country understand the ins and outs of the contracts and costs, said Goldcamp. They need to understand about contingencies, inspections, taxes and how to transfer money.
Cultural aspects need to be taken into consideration as well. Mary Prochnow, owner of Mary Prochnow Realtors in Los Altos, recalled an experience with some Russian clients from St. Petersburg who became concerned about California's community property law.
"There was much confusion and consternation about the community property law. The idea was completely foreign and repugnant to my Russian business clients, and the deal finally fell apart. I believe we will continue to see many more global real estate transactions as we become even more of a global village. The challenges in law and custom will be varied and interesting," Prochnow said.
Realtor Ken Ichiki of Alain Pinel Realtors in Los Gatos has an inside track on buying and selling real estate in the United States for his Japanese clients. A native of Japan, Ichiki came to the United States in 1985 and has eight years experience as a realtor. His knowledge of Japanese customs, as well as his command of the language are a definite plus, and he uses the Internet extensively.
"People contact me by email in Japanese once in a while from Japan whether to sell their property in this area or to buy a property for their next visit to this area. I reply to them by email in Japanese, and I'm now preparing my website in Japanese," said Ichiki.
Ichiki has helped his clients get pre-approved for a loan before coming to the country and has sent necessary documents to Japan attached with an explanation in Japanese so clients can appoint a power of attorney and sign-off on escrow documents without leaving their country.
"Whether a Realtor can speak the language or not, international real estate knows no boundaries," said Barnett. "More and more real estate practitioners are seeking international knowledge and expertise in order to become more culturally sensitive to people from other countries. Technology is the key and the tool that brings us all closer together."
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