I keep getting inquiries from Russian brokers whose clients from Russia are interested to purchase properties in the USA, mostly in Florida and California so far.
Everybody wants to sell of course, but a problem arises when Russian brokers ask to share a commission with them, usually 50/50.
As I'm helping with communication, I know that this issue is important and often prevents the future cooperation at this point as many US agents say that they can't share their commission with an unlicensed person. Period. Some say on the other hand that they can pay if this person is licensed in another US state, some say - licensed in another country. But Russia has no licensing system by law....
So, where's the solution?
I took the labor to read through Florida Statutes Chapter 475 Part 1 Real Estate Brokers, Sales Associates and Schools. It says in # 475.25(1)(h):
"... however, a licensed broker of this state may pay a referral fee or share a real estate brokerage commission with a broker licensed or *registered under the laws of a foreign state* so long as the foreign broker does not violate any law of this state."
*registered under the laws of a foreign state* implies that it can be any type of business registration in any foreign country?
Feel free to contact me privately if you are interested in foreign buyers for your properties and know how legally pay commission or referral fee to foreign brokers sending you these buyers. I'll put you in touch.
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
The Russian business newspaper kommersant.ru is the first and maybe the only so far Russian daily paper with a UK edition now. It reports that London has become a second home for so many Russians. What is happening on the market of Russian buyers now?
"The image of a wealthy Russian client has changed a lot from the point of view of London real estate agencies.
"At the beginning of the Russian boom realtors kind of laughed behind the back of Russian buyers. In 2004 - 2006 Russians were buying properties in London at any price asked, sometimes a million or two pounds more than the market price. Realtors always made up some 15 to 20% higher pricing especially for them. It was not only because of the lack of market and language knowledge. Inferiority complex of the first wave of Russian noveau riches made them prove their financial strength by purchasing the most expensive properties in the most prestige areas or historical castles.
"Their behaviour and property demand differed a lot from other foreign buyers and Brits. As a rule, Russians refused to purchase properties that were highly sought after, but in need of some repairs. They wanted it all shiny no matter what.
"This specific trend had been explained by their inability and unwillingness to hire local staff for restoration or repairs. Also they were pushed away by the low ceilings of most modern British homes, that's why mansions were preferred.
"Now there are changes - Russian buyers negotiate the price, order to conduct their own market research and use mortgages if possible.
"Russian expansion to London real estate market was impressive. In the year 2006 Russians bought 240 priced over GBP 1,000,000 homes in London. There are 9 Russians among the 50 wealthiest people in Great Britain. The beginning of Russian boom in London has been created by Abramovich and Berezovsky back in 2003.
"Roman Abramovich bought a house in Eton Square for GBP 28,000,000, penthouse in Kensington for GBP 36,000,000 and vacation home in Western Sussex for GBP 23,000,000. Boris Berezovsky bought a home in Chelsea for GBP 10,000,000 and in Wentworth Estate in Surrey for GBP 20,000,000. Oleg Deripaska, the youngest Russian billionaire, followed with the purchase of a Belgravia home for GBP 25,000,000; Leonid Blavatnik, the oil mogul - a home in Kensington, GBP 41,000,000; Vladimir Chernukhin, finance industry - the former Midland Bank HQ building, GBP 72,000,000.
"The last purchase of this calibre was in July 2008 - a 90-room home Witanhurst in Highgate for GBP 50,000,000. This is the largest private home in London except for the Buckingham Palace. Although the agency that closed the deal keeps it confidential, the Daily Mail newspaper revealed the purchaser's name - it's the Moscow Mayor's wife Elena Baturina.
"Now, Grace Margolis of the real estate agency Savills with a long experience of working with Russian clients in London, comments on the recent situation.
"Q. Do you have any statistics of real estate purchasing by Russian clients?
"A. It's hard to do as we have to maintain confidentiality and have no right to disclose prices and names of purchasers. To tell you the truth, the media get such information somehow anyway. Another reason is that Russian buyers often purchase real estate in the name of an offshore company and it's impossible to know whom the company belongs. Most of the time the money to close a deal is wired not from Moscow.
"Q. There is a rumour that Russians are leaving London real estate market, is that true?
"A. No, I wouldn't say so. It's a fact though that the super-expensive homes are really not in such high demand any more. We can understand that as Bloomberg reported recently that the 25 richest Russians lost more than $230 billion during the financial crisis... Nevertheless, our agency has many Russian clients to work with right now. But what they want is different.
"It's not the luxury that oligarchs bought in the past, but medium priced homes in the range of GBP 1 to 3 million. In most cases it's not a home to live in, but to invest in and rent away. They also require commercial properties such as multiunit residential and office buildings. We have many buyers for these types of properties from Russia, Kazakhstan, Poland and Baltic countries.
"If they want to move money out of their countries, they prefer real estate investing instead of dealing with banks that can go bankrupt. And one more thing to mention in this respect - no Russian owners sell their London properties in spite of their financial losses during the crisis."
Hope this knowledge of Russian buyers' changed preferences will help you with targeting your marketing.
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
"The INFOREAL Overseas Property Exhibition has been held on May, 16-17 in Saint-Petersburg, Russia. The "Prian.ru - International Property" portal reporters have visited the event and gathered testimonials from the participants, while the trail was still hot.
"According to Rita Semak, a representative of the Diligente Properties company (Portugal), the exhibition has attracted Russian overseas property buyers to a market which is comparatively new to them - to Portuguese real estate market.
"Mr. Blaine Ellingson, a broker from the Beach Front Mann Realty (Florida, USA) has said that the event "has surpassed his wildest expectations".
"Mr. Alexey Smirnov, CEO, Adriatic Stroinvest d.o.o (Serbia and Montenegro), has expressed the opinion that the INFOREAL will help Russian property buyers acquire more information regarding the property markets of these two countries.
"The Overseas Property Exhibition has been organized as a part of the INFOREAL International Real Estate Forum, which has been held in Saint-Petersburg on May, 14-17. The event has been jointly organized by the Group of Companies "Bulletin of Real Estate" and the "Prian.ru - International Property" portal."
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
I posted on AR just about an hour ago and now received a message from Google - the post has been picked up!
That's the power of AR and Google!
If you want to know online news about yourself and also who and where published anything on any topics you are interested in, sign up for Google Web Alert http://www.google.com/alerts - it's free and useful.
With the proper choice of keywords you can also receive alerts where and when somebody copied your own material online...
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
About two months ago I started the new Russian website http://floridainvestor.ucoz.ru to help real estate buyers from Russia invest in Florida. I submitted it to 4 major Russian search engines a month ago.
The major Russian search engine Yandex.ru placed it as #3 on the first page for the target search keywords "Investing in Florida real estate" (in Russian of course)! It's fantastic for a new site!
Same did a smaller engine Mail.ru, it's#3 there
Google.ru placed it as #7, still on the first page...
Rambler.ru hasn't listed it yet...
As usual with all my sites, I applied just basic optimization rules, this time in Russian, and it appears to work in Russian Internet exactly the same way as in English!
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
A realtor from Russia contacted me for help. He has a buyer in Russia who wants to purchase a home in Orange county, California. Safe neighborhood, ocean view, up to $1,200,000.
The Russian realtor wants to split your commission 50:50.
Please contact me if you are able and willing to do so.
I'll help with communication. Thank you
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
There is a good news in Russian real estate business: the Foreign Real Estate Committee has been created in the St. Petersburg Association of Realtors to make the market of international properties in Russia more transparent and civilized.
Michael Kelim, the President of the Committee, explains in his interview with bn.ru, the Real Estate Bulletin:
"The need for such a committee is especially high nowadays as Russian public demand for properties abroad is soaring as never before. In the time of the financial crisis people in Russia don't trust bank deposits, stocks and funds. They are searching for more stable investment means, and foreign real estate at recent low prices is very attractive as such. It's a great opportunity to purchase a vacation home at the sea shore or a condo in a prestige area abroad for the money that can only buy a small apartment at the outskirts of St. Petersburg. There are all kind of real estate investment opportunities abroad where the market allows to spend several million dollars for some investors and at the same time something like 20 000 dollars for others.
"On the other hand, realtors from many countries show more and more interest in buyers from Russia. Russians are very often cash buyers as they are not used to invest in financial instruments, and it makes them very attractive clients in real estate transactions today.
"This way international real estate is the cross point of interests for Russian investors, foreign property sellers and Russian realtors as consultants in such transactions. Also, international real estate has become a hot issue for specialized real estate media as well as general popular editions and news websites. Of course, exhibition and advertising companies are very interested, too. So, the topic of international real estate is very hot in Russia now.
"The market of international real estate is developing fast, but chaotic in Russia. International real estate transactions require top qualification specialists who know various countries and their markets and have good connections with local realtors in those countries. Not all real estate companies in St. Petersburg that offer international services, are really professional. There are cases of deception, too. To lower the risks for Russian investors in foreign real estate and to defend honest realtors, this Foreign Real Estate Committee has been created.
"The Committee will implement the system measures to make this market more civilized and transparent.
"What exactly is on the agenda?
-There will be clear standards for Russian realtors working with international properties developed and they will be mandatory for members of the St. Petersburg Association of Realtors
-Public at large will be better informed about the market of international properties and the existing opportunities
-Realtors education system will be developed. Now there is no course taught anywhere in Russia on how to work with international properties while in other countries it was a common thing long ago. We will bring foreign experts to teach such courses.
"Moscow was the first Russian city where international properties for sale were offered to Russians through local and foreign real estate agencies and where first foreign real estate shows gained popularity. Now St. Petersburg public has the same demand and interest in international properties and shows as in Moscow.
"The average potential Russian buyer of real estate abroad is rather disoriented now. All kinds of various real estate agencies offer their help with choosing properties and closing procedures abroad. There are departments of large well known Russian companies, Russian branches of foreign companies and also lots of small agencies among them.
"The buyers need some criteria whom to choose and trust with purchasing properties abroad. Membership in our professional association is the best guarantee of high quality services."
"WASHINGTON - May 15, 2009 - Citizens of other countries represent an important segment of the U.S. home buying market, and now new special visa categories that allow foreign nationals to gain U.S. residency can help facilitate that process. By using these visa categories correctly, Realtors® will be able to help many more buyers from overseas purchase property in the U.S.
"Toward this end, Realtors from across the country met Thursday with experts in immigration issues and international economics during the joint International and Resort and Second Home Real Estate Forums at NAR's Realtors Midyear Legislative Meetings & Trade Expo.
"We know that business of real estate today is truly borderless, and the National Association of Realtors has recommended steps toward facilitating and streamlining international real estate transactions for some time," says NAR President Charles McMillan. "Knowing how to properly apply immigration rules can help Realtors add value to international property transactions, benefiting both domestic sellers and international buyers."
"International real estate purchases in the U.S. continue to be a significant share of business for many Realtors, according to the 2008 NAR Profile of International Home Buying Activity. Of the Realtors surveyed for the profile, 26 percent served international clients in the past year and about half of those clients purchased a home.
"Recent research conducted by the Harris Research Group for NAR reveals that 7.1 percent of potential overseas buyers surveyed would definitely or possibly consider a retirement location in the U.S. This equates to a market in excess of one million potential buyers, according to real estate economist and author John Tuccillo, who spoke to the forum.
"Stephen H. Davis, a leading immigration attorney, explained how various U.S. visa programs, including the E-2, EB-5 and L-1 visas, help foreigners purchase homes in the U.S.
"These different visa programs will help attract individual investors from other countries," Davis says. "One long-term visa program helps investors attain a conditional lawful permanent residence status by investing $500,000 in a limited partnership at various government-maintained regional centers. Another program involves an investment of $l million to create 10 new full-time positions for U.S. workers."
"There are also visas for people who manage various types of enterprises and businesses in the U.S., including rental properties, condominiums and franchises; people in the export and import business; and foreign executives who manage U.S. subsidiaries of foreign companies. All can facilitate international investment in U.S. real estate. Realtors can help their international clients buy second homes, vacation or future retirement homes by knowing how to use the appropriate special visa categories.
"NAR research shows the increasingly international nature of real estate markets and how foreign buyers are responding to opportunities to acquire homes in this country," says Davis. "After all, a piece of America is worth its weight in gold, and buyers from overseas recognize this. Understanding how the visa categories work can be a useful tool for Realtors in unlocking this important new market segment."
As a realtor's profession is still in its infancy in Russia, I've been looking for information to answer the question - what would an average consumer in Russia do if she/he wants to sell or buy a real estate property? Would they employ a realtor's help or would they do it on their own?
I've just came across the results of a recent phone poll conducted in Moscow by the Internet magazine Metrinfo.ru. The respondents were all of working age, the sample size was representative by age and gender for a big city.
The first question was exactly the one: "What would you do if you have to sell or buy a piece of real estate?"
Here are the answers:
63% would go to a real estate agency 15.7% would do it on their own 7.4% would ask a friend for advice 4.6% would use other methods 2.8% would employ a private real estate consultant 6.5% don't know
The second poll question was quite straight-forward: "Do you trust realtors?"
52.8% yes 30.6% no 16.6% don't know
Those who don't trust realtors or don't know whether to trust them, were asked for their reasons. Here's the breakdown of answers:
35.3% don't trust anybody at all 29.4% no comments as they didn't use realtors' services themselves 11.8% only trust realtors they know in person 9.8% have friends who suffered some damage from bad realtors 7.8% did it on their own in the past and were happy with the result 5.9% other
So, while in the USA the ratio "using a realtor vs. doing by owner" is approximately 80/20 (it's by memory, please correct me if it's not the exact number), in Russia it's approximately 60/40 so far. Well, it's a huge growth in comparison with some 15 years ago when real estate agencies just started to open their doors in Russia, and at the same time it's a long way to go for realtors in building trust with Russian public.
I know you would be more interested specifically in Russians buying properties abroad while this poll is general, but anyway these results can be applied to your marketing strategy in selling international real estate to Russian buyers.
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
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