Questions Realtors Must Ask When Working with a Foreign Buyer
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Questions Realtors Must Ask When Working with a Foreign Buyer

Has this happened to you? You work with a foreign buyer, the transaction closes and the buyer calls you angry because they wanted to rent the property but they can’t because of community association restrictions. You can avoid those calls. I’m Christian Bohyn, NAR President’s Liaison to Belgium and broker-owner of Win Maker Realty in Orlando Let’s take five minutes to talk about how important it is to speak to global buyers and investors about what they want to do with a property once they’ve purchased it. It’s a topic that not many real estate professionals think about when working with foreigners but I’ve seen many cases where foreign buyers set up a corporation to buy a U.S. property, only to find out that it will cost them a fortune in taxes when it came time to sell. As a real estate professional, it’s your job to gather information. Once you do that, you can educate the buyer about their options and refer them to an attorney or tax accountant so they can properly structure the way they take ownership of the property. Some questions to ask are: What are your plans with this property? Do you intend to give it to your kids upon your death? Do you plan to rent it out? Are you taking title as tenants in common with your spouse? Do you want to buy the property as a corporation? What is their ultimate exit strategy? Let’ s say you’re working with an older couple. They were each married before, and they purchase a property as two independent people. What happens if one of them dies before the other? Do the kids from their previous marriages split the property? It’s important to know their exit strategy so you can ensure they get the advice they need from the proper professional. If they decide to set up a corporation, put them in touch with an accountant and an attorney and make sure they understand there will be a cost each year and that they will have to submit year-end tax forms. Most foreign buyers don’t realize this. If they take the property as tenants in common and right of survivorship, then they should understand what happens when one passes away. Can the other continue to use the property? How does the owner’s home country look at estate taxes? Will they want to will it to their children or sell it? The reason that I bring this up is that the proportion of sales to foreign buyers is higher than the resales. We often don’t take into account the problems of resale, such as “how title is taken”, what is going to be the intended use, and FIRPTA, most of us just sell and move on. In my opinion agents doing business with foreign buyers need to be more informed of the consequences for the buyer in case of re-sale. “Begin with the end in mind” is my advise. I ask my buyers: “What is your exit strategy?”

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