1. 2013 Survey of International Home Purchases Miami-Dade-Broward, Florida Conducted by NAR Research for MIAMI Association of REALTORS® Summary of Responses Lawrence Yun, Senior Vice President Jed Smith, Managing Director, Quantitative Research Gay Cororaton, Economist Data Gathered September/October 2013

2. Outline of Presentation About the Survey and Major Conclusions Survey Results – Experience with International Transactions – Buyer Characteristics – Miami-Dade-Broward REALTOR® Designations – Major Issues Reported by Miami-Dade-Broward REALTORS® Summary of Key Findings

3. About the Survey Survey Conducted During Sept 23 –Oct 11, 2013. Questions Focused on Miami-Dade-Broward REALTOR® Experience During Past Twelve Months. Invitation was sent out by Miami Association of REALTORS® to its members Received a Total of 1044 responses.

4. Major Conclusions International sales are an important niche market for a number of Miami- Dade-Broward REALTORS.® Survey data concerning transactions for the 12 months ended Sept-Oct 2013 indicates a slight increase in the volume of international transactions and purchases and an increase in the purchase price. Majority of international clients are foreign residents (Type A). Resident foreigners (Type B transactions) are also important. There are discernible differences between Miami-Dade’s and Broward’s international clients regarding the volume of international transactions, mode of contact, purchase price, type and area of property purchased, top tier countries of client origin, and reason for buying Data indicates an increase in members who have less than 5 years of experience. Many respondents hold designations (e.g., CIPS, CRS, GRI, BPO) and have 6 or more years of experience. The international market remains important though challenging for many, requiring that REALTORS® deal with financing, language and cultural issues.

5. Miami-Dade-Broward REALTOR® Experience with International Transactions

6. Most Miami-Dade-Broward REALTORS® Have Worked with an International Client in the Past 12 Months

7. A Larger Percentage of Miami-Dade REALTORS® Have Worked with an International Client in the Past 12 Months

8. Most International Clients are Non-Resident Foreigners * But Share is Lower Compared to Past Years Type A clients are non-resident foreigners. They reside in another country and do not plan to live permanently in the United States. Type B clients are recent immigrants/resident foreigners/temporary visa holders looking for primary residence in the United States.

9. 50% of Miami-Dade-Broward REALTORS® Closed Six or More Transactions in 12 months ending Sept-Oct 2013

10. Personal Contacts, On-line Presence, and Previous Clients Are Important in Obtaining Foreign Clients

11. Largest Source of Clients Miami-Dade: Personal Contacts Broward: Previous Clients

12. 38% of Miami-Dade-Broward REALTORS® Had Six or More International Clients in 2013

13. About One-Third of Miami-Dade-Broward REALTORS® had a Majority of Their Transactions with an International Client.

14. 37% of Miami-Dade-Broward REALTORS® Have Some Percentage of Their International Business That is Commercial

15. Miami-Dade Has A Greater Percentage of REALTORS® Who Have Some Percentage of International Business That is Commercial

16. 42% of Miami-Dade-Broward REALTORS® Were Involved in Both Residential and Commercial Transactions

17. Buyer Characteristics

18. International Prospects Do Not Mean International Sales 71% of Miami-Dade-Broward REALTORS® Had International Clients Who Did Not Purchase a Property

19. “Could Not Find a Property” and “Cost of Property” Were Two Major Reasons for Not Purchasing

20. “Could Not Find a Property” Was Reported More in Broward

21. 81% of Miami-Dade-Broward REALTORS® Had at Least One International Client Who Purchased a Property

22. Median Purchase Price of a Typical Client Up in 2013

23. International Clients Typically Purchased at Higher Price in Miami-Dade Compared to Broward

24. Condominiums: The Major Choice Detached Single-Family of Increased Interest

25. Condominiums Are The Major Choice, But More so in Miami-Dade

26. Commercial Purchases Concentrated in Retail and Multi-Family Properties

27. Next to Multi-family-- Miami-Dade: Retail Property Broward: Office Property

28. 70 Percent of Miami-Dade-Broward REALTORS® Report that Fewer than 10 Percent of International Clients Obtain a Mortgage

29. Most Buyers Purchased Property in a Central City/Urban Area

30. Most Buyers Purchased Property in a Central City/Urban Area, More so in Miami-Dade

31. The Top Tier Countries of Client Origin

32. The Second Tier Countries of Client Origin Respondents also reported international purchases from these countries: PeruRussia SpainDominican Republic United KingdomChile EcuadorGermany ChinaCosta Rica Honduras Nicaragua IndiaPanama Others, not identified

33. Miami-Dade and Broward Top Tier Countries of Client Origin

34. The Second Tier Countries of Client Origin Respondents also reported international purchases from these countries: Miami-Dade : Chile, Ecuador, United Kingdom, Germany Honduras, China, Nicaragua, Costa Rica, India, Others Broward: Costa Rica, Ecuador, France, Russia, Spain, Germany, Mexico, Australia, Chile, Panama, Japan, Nicaragua, Portugal, Others

35. REALTOR® Expertise and Comments

36. 57% of Miami-Dade-Broward REALTORS® Have 6+ Years of Experience

37. Miami-Dade Has A Greater Percentage of REALTORS® With Less than 1 Year Experience

38. Designations Held by Miami-Dade-Broward REALTOR® Respondents in the 2013 Survey

39. 41% of Miami-Dade-Broward REALTORS® Reported an Increase in the Percentage of Clients Who Are International

40. REALTORS® Reported Exchange Rates as Important in Affecting the Demand for U.S. Property

41. Profitability of Investment and Location Noted as Most Important Factors In Purchasing a Miami-Dade-Broward Property

42. Most Important Factor For Purchase Miami-Dade: Profitability of Investment Broward: Desirable Location

43. Major Comments Reported by Miami-Dade-Broward REALTOR® Respondents in the 2013 Survey Miami-Dade-Broward is perceived as a highly desirable for location and investment purposes. Costs of paying Home Owner Association fees, property taxes, and mortgage insurance are a concern for foreign buyers. Access to U.S. financing is difficult; although most buyers pay cash, REALTORS® may need to discuss credit issues with some potential buyers. Immigration requirements are a concern to some prospective buyers. Some potential international investors were reported as not being able to buy property because of the low inventory of available homes. Language and diversity of cultures can be issues in completing transactions. – Diversity of expectations between potential purchasers and U.S. customs. – Language capabilities important. Some REALTORS® noted an increased need for substantial expertise, knowledge, and professionalism in dealing with international clients.

44. Summary International Sales are a Significant Market for Miami-Dade-Broward for location and investment purposes Survey data indicates an increase in the volume of international transactions and purchases in the 12 months ending Sept-October 2013: -an increase in the percentage of REALTOR® respondents having 6+ international clients (38% in 2013 vs. 30% in 2012) -an increase in the percentage of REALTOR® respondents with 51%+ of their transactions as international (35% in 2013 vs. 21% in 2012) -an increase in the percentage of REALTOR® respondents who had at least one international client who purchased property (81% in 2013 vs. 67% in 2012) The majority of clients are Type A (foreign residents), but the share declined; only 67 percent of respondents reported Type A clients compared to about 72-76 percent in the 2010 and 2011 surveys.

45. Summary, Continued The price paid by a typical client increased; the median price in 2013 is about $ 300,000 compared to the median price range of $ 200,000- 250,000 in 2012. Buyer characteristics -Venezuela, Argentina, Brazil, Colombia, and Canada accounted for 52 percent of reported international purchases; -Condominiums were more preferred than single- family homes, accounting for about 64 percent of purchases ; -Mortgage financed purchases accounted for a minor portion of international sales Many contacts are initiated via personal relationships. – Although personal contact is most favored, online marketing is increasing. – For REALTORS® with only an occasional sale, some study of foreign cultures and customers can help to bring the transaction to a successful closure.

46. Summary--Continued Most Miami-Dade-Broward REALTOR® Respondents Have International Expertise and Experience – Respondents reported having a variety of designations indicating specialized expertise. – Approximately 57 % of respondents reported being in business for more than 5 years compared to 66% in the 12 months ending Sept 2012. International sales market presents unique challenges. - Learning another language can be an advantage. - Personal contacts/referrals are necessary to building an international client base. - Familiarity with tax /immigration/financing regulations is important. - Foreign clients are discouraged by additional costs such as HOA and insurance fees, so helping the client understand the rationale for these costs is critical.

47. End of Presentation. Thank you.