Be prepared to get engaged and be proactive
Owning a property overseas used to be something that only the super-rich could afford. But in the last couple of decades many of us have taken advantage of money built up in the US property boom to buy our own piece of paradise abroad. And who can blame us? Great weather, an easygoing expatriate lifestyle, tasty food and more house for our money.
But what happens when plans change, which they invariably do, and you need to sell your overseas property? Many international markets are small, inefficient and unregulated – which means unless you own the last piece of beachfront in a wildly popular tourism destination, you will need to do more than list your property with a local agent and hope it sells. Truth is, you’ll be in competition with other sellers, inventories are currently high, and since 2008 the environment has been firmly tilted towards buyers.
If you’re after a quick sale, be prepared to get engaged and be proactive. In this article I’m not going to cover common selling tips like pricing and staging as these have been addressed countless times before. I’m going to tackle thornier issues of getting exposure for your international property because that’s where most sellers are struggling.
I’ve worked in the international real estate sector since 2002 including a time as Director of two international real estate franchises in Central America. What’s clear from this experience is that core sales strategies and techniques that work in the US or Canada don’t deliver good results in many international real estate markets.
- International real estate markets (particular those in emerging markets) are inefficient. With no centrally managed property listing databases (comparable to the US Multiple Listing Service for example) it’s hard for buyers to access all properties available for sale (including yours).
- Official statistics are typically not available, making it hard for both buyers and sellers to get their hands on reliable market comps to build an accurate picture of what constitutes value.
- Overseas markets are generally small with one-of-a-kind properties sold to a small pool of potential buyers. If the pool of local buyers financially able to buy your property is small – as often is the case in emerging markets – sellers are almost exclusivity dependent on foreign buyers for a sale.
- Unfamiliarity breeds concern. More than anything, foreign buyers fear economic and political instability that could result in the full or partial loss of the asset. This brings an entirely new set of objections from prospects that sellers will need to address.
- Sellers may not be physically present in the country where their property is for sale, raising logistical questions of access and presentation. Lockboxes aren’t the norm in international real estate markets.
None of us can change the market, but we can try to adjust aspects of how it operates to our advantage. As a private home seller in an international market you can educate yourself on how the market works on the ground, make sensible decisions and take strategic action to sell your property.
In this article I outline some of the actions you can take. They are framed as “uncommon” tips, as most sellers won’t apply them. That’s good news for those of you that do, as it becomes easier to make your property stand out from the crowd. You’re in a competition to get your property in front of buyers. It’s time to get competitive.
1. Define your perfect buyer
This may not sound very action orientated, but defining the person who is the best fit for your property should be starting point for your entire sales strategy. Before you even think about pricing or writing a listing description, you need to know exactly who you are targeting.
Who would get the most out of owning your property? Who would be the happiest living there? What makes them tick? What are their hopes and dreams? What do they care about? What are their biggest fears?
Take the time to get really detailed. It may feel a little ridiculous but it’s a good idea to write this down. Be as specific as possible. Instead of “educated middle-age person who likes to travel,” you should end up with something like this:
“Mary 62 lost money in the financial crisis and is worried about funding her retirement. She wants a change and is considering relocating to Central America. She has enough money to buy a property with her IRA but needs to live somewhere that is affordable.”
“John, 40, thrill seeker who works in Silicon Valley as an entrepreneur running his own business. He's got plenty of money but values the "money can't buy" experiences. He loves to impress his friends with doing unusual things including investing in exotic property.”
Once you’ve found your one person, you can go about getting their attention. Which brings us to our next tip – writing a compelling property listing.
(In case you’re worried. Focusing on one perfect buyer does not mean you’ll miss out on a larger audience. Quite the opposite. Instead of being generic and diluted, the message your property will be sending will be pithy and focused. Your message and consistency will inspire not only the right person, but also anyone who feels affinity with that person or admires what that person represents. And that’s a far better strategy than targeting everybody and nobody.)
2. Write a compelling property listing
What’s the goal of your property listing? To give your perfect buyer a set of compelling “reasons why” they should buy your property. You do this by answering this question for the buyer: “What would my life be like if I lived here?”
If that sounds too complex, here are 3 actionable steps.
- First, jot down why you bought the property (e.g., close to a great surf break, affordable lifestyle, rental return)
- Second, identify the best features of the property (e.g., large open deck, ocean views, huge kitchen)
- Then pick up to three things from these lists and create a compelling headline for your property (e.g., Income-generating ocean view property close to a surf break).
You won’t be able to fit everything that’s great about your property in the headline, but your headline isn’t trying to do everything. It only needs to do one thing: Get your prospect to read the first sentence of the listing description.
Pack this description full of “reasons to live here.” I often include these as a set of bullet points (see box).
Then take your list of features (what your buyer will actually buy) and translate them into a list of benefits (the kind of lifestyle they’ll get). Ultimately, you want to weave a story about what their life will look like if they owned your property.
This is the way to tap into powerful buying motivations and desires. With international property, common desires are to make money, live more cheaply, experience something different, enjoy a better lifestyle, embrace the exotic, escape from the daily grind, impress friends and so on.
But before we get carried away with the prose, remember that the true language of real estate is photography. Carefully choose a small number of seductive images that showcase the very best of your property. More is not always better with real estate imagery, so don’t fall into the trap of using photos to catalogue every room and every feature. All that does is document the home, when your photos should be advertising it. Remember you’re not selling four walls and a roof; you’re selling an emotion. An experience. A lifestyle. A dream.
As the owner you are a great marketing resource for your property. You know things about your property and the neighborhood that even the best real estate agents won’t know. Instead of filling the space with empty marketing catchphrases, you’ll be able to deliver the perfect how-it-feels-to-live-here message to your buyer.
3: Give your listing to all local agents active in your marketplace
When a seller lists a property with a Realtor in the US it will be added to a Multiple Listing System (MLS), enabling other agents to access the listing and show the property. This concept of a massive, shared listing database does not exist across much of Latin America, Southern Europe and Asia. Rather, individual agents maintain their own, independent, separate listing databases. And while there is more collaboration in some markets than others, your best bet as a seller is to make sure every agent receives your listing directly.
This does involve some legwork, but it’s a crucial step in getting your property as much exposure as possible. A typical agent in an emerging real estate market acts more like a buyer agent than a listing agent, so you won’t receive sales pitches, listing presentations or intense competition to secure your listing as an exclusive. The market just doesn’t operate that way.
If you’ve taken the time to write a magnetic listing description and shoot some seductive photos, the process of listing your property with multiple agents should run smoothly. After all, you’ve already done the hard work.
And if you’re operating in an unregulated market (of which there are plenty) you’ll find that selling real estate is not an activity that’s restricted to “formal” real estate agents. Anyone can sell real estate.
So cast your exposure net as wide as possible. Tell every real estate “actor” that your property is for sale. That means your taxi driver, hairdresser, the owner of your local restaurant, the hotel receptionist and anyone else you can think of.
Make sure you’ve thought through the mechanics of property viewings. For international sellers who reside out of the country, ensuring your house is accessible could be a tip in its own right. After all, if prospects can’t be shown your property, they can’t buy it. Lockboxes are not the norm, so I’d strongly recommend giving an access key to each local real estate agent. If security is a concern you’ll need a local caretaker. Make sure they have working cell-phone.
4. Broaden your online reach
Relying on the marketing strength of local agents may not be enough to sell your property in a slow market. As buyer agents, they typically do not put focused marketing effort into individual listings – after all, it’s an open listing and anyone can sell it. And don’t expect marketing reports or viewing updates either. If after a few months you have not received qualified prospects, it’s probably time to take things into your own hands. It’s time to take control.
Let’s remind ourselves of the #1 secret to selling an international property quickly. Well, not really a secret – it’s getting the property in front of as many of the right buyers as possible. The good news is that doing this is easier than ever given the advent of the Internet.
The statistics are very clear – your buyer will start their search for your property online, almost exclusively. So all you need to do is join them. Let’s say you are selling property you own in Nicaragua. Do as your buyers will do and type “Nicaragua real estate” into google.com. In fact, let me do that for you.
Typically you’ll find the top results dominated by real estate brokerage sites and owners listing sites. You’ve already listed with all of the agencies, right? (If not, scroll back up to Tip #3.) The key here is to broaden your reach by adding your property to owners listing sites that receive the most traffic for your target market. But don’t list with every site you come across. There’s little point in placing your listing on sites that are not targeted to your location, however impressive their overall traffic numbers.
You need to know exactly whom you are fishing for. Then set about getting their attention. You can get as geographically granular as you need to. For example, if your property is located in Placencia, Belize, type “Placencia real estate” into google.com and ensure you are listed on all the sites that appear on the first page.
5. Deepen your marketing even further
Let’s recap where we are in the process of selling your international property:
- You’ve identified the perfect buyer for your property
- You’ve created a compelling listing description,
- You’ve listed with all active real estate agents in your market,
- You’ve made sure you are listed on owners listing sites that rank well for specific search terms that make sense for your property.
You’re in good shape. Your properly is now not just on the market but in the market. You may have done enough. But as with most things in life, there is always more you can do to take things up a notch.
I’ve listed 9 “extras” below. Whereas creating a great listing description and getting it on highly trafficked sites is absolutely crucial to your sales strategy, consider the ideas below as a set of tactics that you can use to take your marketing a few steps further. Some of the tips can be done very quickly while others require an ongoing time investment. I suggest you do the easiest ones first.
- Update your email signature and add a direct link to your online property listing. This is a low-key, unobtrusive method to getting the word out that you have a property for sale.
- If you participate in any online forums update your signature there too.
- Tell everyone you know (friends, family, co-workers) that you have a property to sell.
- Post a notice to your social networks. If you are a user of Facebook, Twitter, LinkedIn, Pinterest or other social media sites, tell your network about the property you have for sale.
- If you have a website or blog, post a notice there – again linking back to your property listing. Remember that international real estate buyers may be concerned about buying in an unfamiliar market. A blog filled with stories and anecdotes about the great lifestyle on offer can really help assuage their fears.
- Post a video about your home on YouTube. Walk through your home and neighborhood showcasing the best parts. It’s the perfect place to explain the “reasons why” you bought the property in the first place and how much you love it, while allowing them to visualize living a great life there too.
- Join the conversation on blogs that cover the real estate market where your property is located. Add value by leaving good quality comments, placing your property listing url or your own blog in the website field.
- Tell your neighbors about your property. Neighbors like choosing their neighbors and may encourage people they know to join their community by buying your property. If you belong to neighborhood message boards or email lists, add a link to your home’s online listing.
- Leave a folder in your home that provides details about the local area for prospects to leaf through. Fill it with information on your favorite restaurants, surf breaks and local attractions. Sell the lifestyle. The experience. The dream.
6. Get creative with incentives
This is where you take the extra step to make the transaction easier or more attractive than a buyer would expect. It’s a great way to “lower your price” without actually “lowering your price.” Below we’ve listed examples of incentives that have been used successfully by owners selling their international property.
- In one development where owners were locked into rather onerous monthly HOA dues for a five-year period, an enterprising seller offered to cover the payments over this period. (After five years owners would be free to restructure the HOA and reduce the payments.)
- A common incentive in Central America is for sellers to pay the transfer fees and registration taxes (both of which are typically paid by the buyer).
- In order to entice the lifestyle buyer, consider leaving personal property behind so that they can pick up where you left off. You can take this well beyond a standard “turnkey” sale by not only providing sheets on the beds, silverware in the drawer, and artwork on the walls, but also a surfboard, a golf cart, a flat screen TV? I’ve seen sellers throw in a golf membership, a return flight and even, rather outlandishly, a car with the house.
- Seller financing is one of the strongest incentives in Central America particularly when selling to an international buyer, as they will typically find it difficult to secure local financing at attractive rates, if at all.
- Consider incentivizing local real estate agents, your caretaker, the developer, or whoever shows your property with a commission bonus in the event of a successful sale. This can help oil the wheels at a property viewing.
Any of these incentives will help your property stand out from the competition. Consider carefully whether it makes sense to add them to your property listing or offer them during the negotiation process. Seller financing for example would be a good candidate for inclusion, if you were willing to offer it, as it’s such a strong selling point for your property.
Don’t approach the negotiation process with a goal to “win” or “come out on top.” You’ll be more successful treating the process as a problem-solving exercise. Take the emotion out of it and start by identifying the full range of items that can be negotiated. Your needs must be met for the transaction to move forward, but so do your buyer’s.
Finally, if you have had lots of interest from a buyer but have not yet received an offer, consider turning the tables and making a reverse offer. Also known as a pre-emptive offer, this involves putting together an offer to sell to the buyer, usually at a lower price than the property is listed at. Create some urgency by making the offer expire a few days after issuing it. It shows you are flexible and willing to negotiate and may be enough to encourage an on-the-fence buyer to take action on your listing.
7. Be prepared at the closing
You’d be surprised how many real estate sales fail during the closing process. Any liens, encumbrances, liabilities, boundary issues, or annotations that the buyer’s attorney finds during the due diligence property can easily kill the deal.
The box below identifies 6 pieces of information that savvy sellers will have ready at the start of the process. The core documents relate to legal and title aspects, but also listed are other pieces of information to address concerns that international buyers often have. Do this right and your buyer will feel at ease, their attorney will give your property a glowing report, and your closing will proceed smoothly.
Don’t be surprised at the closing meeting.
Having this information ready to email or fax to potential buyers will often make the difference in selling your property quickly. You don’t want title issues to be the reason the deal falls apart.
I often take this process one step further and ensure that I have title insurance on all properties that I am preparing to sell. Unlike in the US, title insurance is not a requirement to sell a property in most international markets, but it’s a great additional step to take. Presenting a title insurance certificate with no exceptions helps address concerns about the legal risks of buying in a foreign country. Granted, the buyer will have to take out their own policy once they purchase the property, but knowing you have a title certificate goes a long way to show that your title has already been thoroughly researched and has come up clean.
I’ve kept these 7 tips as action-orientated as possible. If you’re not getting traction with your current sales strategy it’s time to shake yourself out of the holding pattern of "hoping that one day you’ll sell your property" and take control of how your property is being presented and where it’s being presented. And there’s an added bonus: most sellers find that moving from a passive stance to being proactive not only increases their chance of making a quick sale, but is also a great stress reliever.
Now I know I said I would not cover price, but I will say one thing: If you apply the 7 tips outlined in this article and still don’t receive any realistic offers within 6 to 8 months, take that as a sign that your price is too high.
Claudia Gonella has been active in the Central American real estate sector since 2002. She is co-founder of Reveal Real Estate, an FSBO listing site that connects buyers interested in property in Belize, Nicaragua, Costa Rica and Panama with sellers who have listed their property for sale. Reveal Real Estate has a free guide for owners looking to sell their overseas property.