Simplifying the International Real Estate Transaction

The international real estate transaction for Realtors, investors, vacation home owners, property managers, and developers is quite complex. We break down the entire process and supply plenty of sources to explore deeper

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Simplifying the International Real Estate Transaction by Mind Map: Simplifying the International  Real Estate Transaction

1. 2. Addressing Common Problems

1.1. Cost of property

1.1.1. Currency conversion

1.1.1.1. http://www.xe.com/ucc/

1.1.2. Transferring of funds

1.1.2.1. http://banking.about.com/od/howtobank/a/bankwiretransfer.htm

1.2. Finding the right property

1.2.1. Usage

1.2.1.1. Vacation/2nd home

1.2.1.1.1. http://www.washingtonpost.com/blogs/where-we-live/post/buying-a-vacation-home/2012/05/29/gJQAuMvvzU_blog.html

1.2.1.2. Primary residence

1.2.1.2.1. http://www.realtor.com/home-finance/mortgages/before-buying-home.aspx?source=web

1.2.1.3. Commercial/investment

1.2.1.3.1. Income producing

1.2.1.3.2. Speculation

1.2.1.3.3. Property management

1.2.1.3.4. Fixer upper

1.2.2. Location

1.2.2.1. Transportation

1.2.2.1.1. Local

1.2.2.1.2. International

1.2.2.2. Tourism

1.2.2.2.1. Why Belize? http://www.youtube.com/watch?v=JDiKKNXQuLo

1.2.2.2.2. Attractions

1.2.2.3. Neighborhoods

1.2.2.3.1. http://www.zillow.com

1.2.2.3.2. http://www.neighborhoodscout.com

1.2.2.4. City highlights

1.3. Immigration laws

1.3.1. Visa requirements

1.3.1.1. http://travel.state.gov/visa/immigrants/types/types_1326.html

1.3.2. Passports

1.3.2.1. http://travel.state.gov/passport/passport_1738.html

1.4. Financing

1.4.1. Customer needs financing

1.4.2. Customer is a cash buyer

1.4.2.1. Bank statement of funds

1.4.2.2. Wire transfer of funds

1.5. Tax laws

1.5.1. State taxes

1.5.1.1. http://www.stateofflorida.com/Portal/DesktopDefault.aspx?tabid=29

1.5.2. Federal taxes

1.5.2.1. http://www.irs.gov

1.6. Insurance costs

1.6.1. Property

1.6.2. Project

1.6.3. Health insurance

1.7. Property taxes

1.7.1. Escrow

1.7.2. How they are calculated

1.8. Country benefits

1.8.1. Gain

1.8.1.1. Retirement

1.8.1.2. Healthcare

1.8.1.3. Hold property for longer term

1.8.1.3.1. Only 70 years in China

1.8.1.3.2. Only 99 year land lease in Mexico

1.8.1.4. Create wealth

1.8.1.4.1. Maximize tax deductions

1.8.1.4.2. Investment accounts

1.8.2. Lose

1.8.2.1. Must prioritize issues before making a decision

1.8.2.1.1. Social security

1.8.2.1.2. Benefits

1.8.2.1.3. Healthcare

1.8.2.1.4. Collecting pension

1.8.2.2. Lose social security benefits if gone more than 6 months (Canada)

1.8.2.3. Lose country citizenship (China)

1.8.2.4. Insurance

1.8.2.5. Tax breaks

1.9. Cultural nuances

1.9.1. http://www.realtor.org/field-guides/cross-cultural-business-etiquette

1.9.2. Kiss bow and shake hands http://www.amazon.com/Shake-Hands-Bestselling-Business-Countries/dp/1593373686

1.10. Referrals

1.10.1. Agreements in place to secure commission

1.10.2. Cooperating associations

1.10.3. Wire for US must be initiated from and to the real estate broker

1.10.4. A CPA, knowledgeable and seasoned finance expert as well as foreign association should be involved to educate and create a template on finalizing deals for the referring partners

1.10.5. Justifying foreign legal license capacities, payment to brokers (not agents) and/or mandatory or optional withholding taxes, issuances of a tax certificate, transfer of compensation (in the country closing real estate deal currency) which may create further need to consider for example services of Moneycorp to repatriate, wire and transfer funds.

1.10.6. May need to use CRS, TRC, ICREA's or "in house" referral agreement, issuance of proper invoice and billing, justifying correspondence

2. 1. Coordinating the transaction team

2.1. Buyer's agent

2.1.1. Introduce buyers agency

2.1.1.1. Working with a Florida Realtor http://youtu.be/d6p0E17kv-c

2.1.1.1.1. Get certified CIPS http://www.realtor.org/designations-and-certifications/cips-designation

2.1.1.1.2. Find an area of specialization

2.1.1.1.3. Get TRC (Transnational Referral Certification) http://WorldProperties.com

2.1.1.1.4. Read a variety of publications

2.1.1.1.5. Networking

2.1.1.2. 1. Create value for representation

2.1.1.2.1. http://www.realtor.com/home-finance/homebuyer-information/hiring-buyers-agents.aspx?source=web

2.1.1.3. 2. Sign the agreement

2.1.1.3.1. http://en.wikipedia.org/wiki/Buyer_agency_agreement

2.1.1.4. 3. Coordinates the process of the transaction

2.1.1.5. 4. Ask for referral

2.1.2. Explaining the terms syllabus

2.1.2.1. Contract is a binding agreement, not a verbal understanding.

2.1.2.2. Definitions

2.1.2.2.1. Townhome

2.1.2.2.2. Villa

2.1.2.2.3. Attached home

2.1.2.2.4. Cluster home

2.1.2.2.5. Buyer agent vs Listing agent

2.1.2.2.6. Notary

2.1.2.3. Title insurance

2.1.2.3.1. There is no title insurance in Europe

2.2. Exchange partner

2.2.1. Holds the money in escrow to fund the transaction

2.2.2. http://www.moneycorp.com/uk/

2.2.3. Money laundering laws

2.2.3.1. http://www.realtor.org/articles/anti-money-laundering-guidelines-for-real-estate-professionals

2.2.3.2. Can't wait to the last minute to transfer funds. They must be seasoned.

2.3. Banker

2.3.1. Opening a bank account

2.3.1.1. Personal

2.3.1.2. Corporate, LLC, or a trust account Not very easy

2.4. Attorney in US or specific state and Abroad Immigration laws federally governed, real estate is state bar limited

2.4.1. Paperwork

2.4.1.1. http://www.realtor.com/blogs/2012/06/08/do-i-really-need-a-real-estate-attorney/

2.4.2. Immigration/visa

2.4.2.1. US Citizen and Immigration Services http://www.uscis.gov/portal/site/uscis

2.4.3. Estate planning

2.4.3.1. How the estate is transferred upon death

2.4.3.2. Passing on property to children/or spouse/or third parties foreign providing laws or US-foreign fiscal convention allows it

2.4.4. How to take title

2.4.4.1. Joint tenancy

2.4.4.2. Couples

2.4.4.3. Single

2.4.4.4. Trust

2.5. Translator

2.5.1. http://www.themarketinganalysts.com/en/pages/real-estate-translation-get-a-free-translation-quote-from-our-international-investor-translator-team/

2.6. Tools (not to be relied upon)

2.6.1. http://babelfish.com

2.6.2. http://google.com/translation

2.7. Accountant US and foreign

2.7.1. Make recommendation to a local CPA

2.7.2. May disagree with the lawyer on how to structure the transaction

2.7.3. Taxes may be more/less depending on where the money is coming from

2.7.4. Laws to be aware of

2.7.4.1. State taxes

2.7.4.1.1. http://www.stateofflorida.com/Portal/DesktopDefault.aspx?tabid=29

2.7.4.2. Federal taxes

2.7.4.2.1. http://www.irs.gov

2.7.5. Tax exemptions

2.7.6. Estate taxes

2.7.7. How real estate taxes are calculate in US

2.7.7.1. Some countries do not charge on annual basis

2.8. Insurance agent

2.8.1. Must have a credit score to get property insurance

2.8.2. Away more than 90 days you have to pay higher premium (10 - 20% higher)

2.8.3. HUB international insurance http://www.hubinternational.com

2.8.3.1. Property

2.8.3.2. Home

2.8.4. Commercial

2.8.5. Life insurance to pay estate tax

2.8.5.1. They can take in their own country which may be less expensive in local currency.

2.8.6. Health insurance

2.8.6.1. Considerations for each country

2.8.6.1.1. http://www.expatforum.com/expats/france-expat-forum-expats-living-france/59242-repatriation-insurance-question.html

2.8.6.1.2. http://www.cfe.fr

2.8.7. Travel insurance

2.8.7.1. http://www.allianztravelinsurance.com

2.8.7.2. http://www.mondial-assistance.fr/#

2.9. Team member considerations

2.9.1. Do they speak the language?

2.9.2. Do they understand cultural differences?

2.9.3. We cannot suggest partners because of liability

2.9.3.1. We can suggest a few people to avoid liability

2.9.4. Avoid anti-trust

2.9.5. Make your own list based on referrals

2.10. Title company

2.10.1. Explain title insurance

2.10.2. Explain escrow

2.10.3. Explain closing process

3. 7. Closing preparation

3.1. Transfer utilities

3.2. http://www.trulia.com/blog/olga_mayayeva/2009/03/closing_day_checklist_wh

3.3. Moving company

4. 8. Follow up

4.1. Neighborhood activities checklist

4.2. Ask for referrals

4.3. Get an international driving permit http://www.aaa.com/vacation/idpapplc.html?association=AAA&clb_id=212&secure=N

4.4. Alarm security

4.5. Homewatch services

4.6. Mail forwarding

5. 6. Funding the transaction

5.1. Escrow

5.2. Currency exchange

5.3. Money is seasoned

5.4. http://www.moneycorp.com/uk/business/trade-now/faqs/?faq=0

6. 3. Property Search

6.1. Finding the right property

6.1.1. Searching on the MLS

6.1.2. Searching http://REALTOR.com/global

6.1.3. Searching company website

6.1.4. Property type

6.1.4.1. Single home

6.1.4.1.1. Villa

6.1.4.2. Short sale

6.1.4.3. Foreclosure

6.1.4.4. New construction

6.1.4.5. Condo

6.1.4.6. Farms/acreage

6.1.4.6.1. http://www.dep.state.fl.us/lands/faq.htm

6.1.4.7. Lease

6.1.4.7.1. Find a property manager

6.1.5. Public records

6.1.5.1. Property tax information

6.1.5.2. Ownership records

6.1.5.3. Schools

6.1.6. IMAPP http://www.mfrmls.com/member-benefits/imapp-benefits

6.2. Metric conversions

6.2.1. http://www.metric-conversions.org

6.3. Currency conversions

6.3.1. http://xe.com

6.4. Associaiton bylaws

6.4.1. Lease vs vacation home

6.4.2. 55+ demographic (80% rule)

6.4.3. Making improvements

6.4.4. www.floridahoamembers.com

6.5. Appraisers

6.5.1. County appraisers http://dor.myflorida.com/dor/property/appraisers.html

6.5.2. Property appraiser

6.6. Court records

6.6.1. http://www.stateofflorida.com/Portal/DesktopDefault.aspx?tabid=13

7. 4. Preparing an offer

7.1. Set appointment with transaction team

7.2. Create a schedule of milestones for the transaction

7.2.1. Property inspections

7.2.2. Appraisal (if needed)

7.2.3. Explain deadlines for contract

7.3. Set expectations for proper follow up

8. 5. After offer acceptance

8.1. Order inspections

8.1.1. Building

8.1.1.1. http://www.ashi.org

8.1.2. Termite

8.1.2.1. http://www.termiteinspection.com

8.1.3. Structural engineer

8.1.4. Mold

8.1.4.1. http://www.epa.gov/mold/

8.1.5. Radon

8.1.5.1. http://www.epa.gov/radon/

8.1.6. Boat slips

8.1.6.1. Inspection for canal, sea salt water, bodies and open Ocean slips and davits: think of CCCL (code) + may need to verify if dragging is required some time in the near future (cost) or to check the sea walls by specialized divers (expensive!).

8.2. Appraisal

8.2.1. http://www.realtor.com/home-finance/homebuyer-information/what-is-a-property-appraisal.aspx?source=web

8.2.2. County appraisal

8.3. Title search and insurance

8.3.1. http://www.bankrate.com/finance/mortgages/6-questions-to-ask-about-title-insurance-1.aspx

8.4. CLUE report

8.4.1. https://personalreports.lexisnexis.com/fact_act_claims_bundle/landing.jsp