Tips for Dealing with Foreign Buyers or Sellers

Tips for Dealing with Foreign Buyers or Sellers

"Since foreign buyers and sellers comprise an important part of the Canadian and U.S. housing markets, local Realtors should be prepared and know how to deal with them."

Foreign investors play an important role in the Canadian housing market, especially in bigger cities such as Vancouver and Toronto. The number of foreigners investing in Canadian real estate is increasing. According to the 2013 CREA Members Survey, 31.4 per cent of members of the Canadian Real Estate Association have worked with at least one foreign buyer over the last year. Moreover, 54.8 per cent of members with foreign clients have either one or two of these clients, while 13.4 per cent have more than five.

onboard service by Matt Pek
Onboard service by Matt Pek

Most foreign clients are from China (21.4 per cent) and the United States (15.2 per cent). Foreign buyers play an important role especially in luxury properties in some of Canada’s most prominent markets. As the 2013 figures from CREA indicate, 37.9 per cent of properties purchased by international clients sold for more than $500,000.

In the U.S., there is a similarly high ratio of foreigners investing in real estate. According to the U.S. National Association of Realtors, approximately 28 per cent of U.S. Realtors have worked with international clients. Moreover, about 88 per cent of these Realtors have worked with one to five foreign clients and 4 per cent have worked with more than 10 clients. Most of the foreign buyers of U.S. properties (54 per cent) came from Canada (19 per cent), China (16 per cent), Mexico (9 per cent), India (5 per cent), and the U.K. (5 per cent). Even though Canada had the first spot in terms of transactions volume, China accounted for the largest sales dollar volume because of the higher average price of properties bought by Chinese buyers.

There are a lot of foreign clients in Canada and the U.S., but they might not be used to real estate practice in North America. Since foreign buyers and sellers comprise an important part of the Canadian and U.S. housing markets, local Realtors should be prepared and know how to deal with them.

Bank of China by epSos
Bank of China by epSos

Here are some tips for dealing with foreign clients that we’ve put together based on our experience.

General Advice

There are significant cultural differences among foreign clients from different parts of the world. However, foreign clients have more in common than you would think, and the first steps that Realtors should take when preparing to deal with foreign clients are very similar.

When dealing with foreign clients, assume that all the North American customs of buying and selling real estate will be new to the client. Things that we consider normal, such as buyer agency, might not be common to the foreign buyer or seller — so don’t be surprised if the client calls everyone in your office. Do your homework and read up on a particular culture before engaging with them. Otherwise, you’ll likely already be making some cultural mistakes.

Reen is engaged 2 by Azlan DuPree
Reen is engaged 2 by Azlan DuPree

Many foreign clients speak very good English, but keep in mind that it might not be their mother tongue and speak slowly without using jargon. Do not make any assumptions, and explain everything to your client so that you’re sure that your client understands all the important aspects of the deal. Also, be prepared to get acquainted with the art of the “haggle.” Though haggling isn’t common in North America, the deal is never “final.” Usually, there are three rounds of negotiations: the first on the agreement of purchase and sale, the second after the building inspection, and the third often just days before closing.

Be patient and make sure that your clients are prepared and patient as well. Often that’s the only way you can get the deal you want. Your negotiating skills will definitely be tested, especially when dealing with buyers or sellers from the Middle East and Asia. Kisses, bows, hand shaking or not, will become your daily routine when dealing with foreign clients. You should also keep in mind that although you’re dealing with one buyer, it’s most likely a family affair. Furthermore, political unrest (Egypt) and inability to become nationals (Dubai, UAE) are big motivators, as well as the host nation’s property rights.

It’s typical to offer 50 per cent of list price and negotiate to about 75 per cent of list. However, if the buyers really wants the property, they will pay. In most cases, foreign buyers will be willing to pay more if the school district is good. They may also pay more depending on infrastructure, parks, and gardens.


Chinese buyers and sellers have a dominant position among foreign investors in Canada’s largest housing markets, including Vancouver, Toronto, and Montreal. Canada is a great destination for Chinese buyers who want to purchase residential properties. In many cases, this is because their children are going to study in Canada, they are relocating to Canada, or it is an offshore investment.

Chines New Year by MrTinDoc
Chinese New Year by MrTinDoc

According to Tina Mak, an experienced real estate professional from Vancouver, usually, rich buyers from China do not have higher education. There are also plenty of educated buyers who are often more reasonable to deal. However, their net worth is a bit lower. If you’re dealing with a couple, do not make any assumptions regarding their marital status.

Similarly, like when dealing with other foreign clients, you will need to be tolerant and patient. Tina Mak also added that clients from China may spend relatively high amounts on things you might consider unimportant, particularly material possessions, yet they might be reluctant to pay a couple thousands more on the final price. Furthermore, be prepared that dealing with clients from China is usually not a business-to-business transaction but rather a business-to-customer-to-business relationship.

Feng Shui Calculator by Dave Fayram
Feng Shui Calculator by Dave Fayram

Chinese buyers give a lot of importance to Feng Shui, so be prepared to tackle these issues with great care. When you open the front door, being able to look through the house and out the back is not advantageous. Another important factor that could determine a deal with Chinese buyers is if people have died in the house or if it faces a cemetery. If there is a bulkhead on a ceiling, do not put the headboard of the bed on that wall. We recommend that you work with a professional home stager who has experience with Feng Shui.

Moreover, addresses and unit numbers play a significant role in every transaction. Buying a home has always been a numbers game, but it goes to another level if you have Chinese clients. For example, a good address could bring the homeowners good luck. Nicole Fortin, professor of economics at the University of British Columbia, found in her paper “Superstition in the Housing Market” that Chinese buyers in the metro Vancouver region were willing to pay more for lucky numbers in their street addresses. Eight is considered to be a lucky number in Chinese culture, and you won’t have trouble with a six or nine. On the other hand, four is considered to be unlucky, as well as seven and the lonely number — one.

The Middle East

There has been a significant increase in buyers from the Middle East in the wake of the Arab Spring uprisings. Clients from the Middle East often favour established neighbourhoods or busy downtown areas.

Aerial view of The Masjid of the Prophet by Wajahat Mahmood
Aerial view of The Masjid of the Prophet by Wajahat Mahmood

When entering the home of a seller from the Middle East, always take off your shoes and instruct your clients to do so as well. It is polite to accept coffee or tea when it is offered. If the person you’re dealing with shows deep religious feeling or commitments, do not shake hands with the opposite gender. Try not to go straight down to business but start off with small talk and ask about families. Remember, it is important to show respect and courtesy when dealing with clients from the Middle East.

South America

According to Francisco Angulo, from Coldwell Banker Residential Real Estate, South American buyers are not familiar with the concept of a unique MLS where all Realtors share the same database. Therefore, he suggested that you should always make sure that they know how it works to avoid having multiple agents working for the same buyer. Moreover, you should point out to your South American clients that data on websites such as Zillow or Trulia might not be up-to-date.

Hispanic Heritage Celebration by Cliff
Hispanic Heritage Celebration by Cliff

Another topic that you should go through with your clients from South America is the process of selling. Quite often, buyers from this region present simultaneous offers even if they are buying only one property, not thinking about whether the contract is binding. If your is selling and not able to attend closing, you should point out what the power of attorney encompasses.

Buyers from South America are not always familiar with financing options and requirements in North America. You should always explain mortgage guidelines to them. Suggest that foreclosures can obtain several offers by the bank. Be prepared for South American buyers not to feel comfortable showing their wealth. Most likely, they won’t present real numbers when providing proof of funds for cash deals. Moreover, state clearly what your duties as a Realtor are and which services are provided by other entities, such as property management.

The Indian Subcontinent

The number of buyers from the Indian subcontinent in Canada is growing and so is their importance for the Canadian housing market. They often invest in Canadian real estate for safety purposes and to transfer the funds they’ve earned in their home country. They have a lot of capital available for investment and feel that real estate is a very smart form of investment.

As Azizali Kanjee, president at Inprobus Realty Corporation, remarked, buyers from this region prefer to work with Realtors who have good references from their friends or relatives. Moreover, if a friend or compatriot succeeded in a particular type of investment, they will try to follow him or her, sometimes even at the cost of unreasonable price increases. Buyers and sellers from the Indian subcontinent prefer to keep money in the family. Also, they are used to dealing with people on a handshake basis.

Gesture by Quinn Dombrowski
Gesture by Quinn Dombrowski

On the other hand, buyers from this region tend to be a bit unrealistic when it comes to their return expectations. They do not like to pay any more than they have to, not even for operations, and often act according to information they found on the Internet, regardless of the credibility of their source. In most cases, they assume that the asking price includes a built-in negotiating amount, so be prepared to do some haggling.

Lots of foreigners who decide to invest in real estate in North America are members of large and wealthy families that own numerous properties in different countries. They’re looking for properties located in well-situated neighbourhoods in large markets. Their number is increasing, and Realtors should know how to deal with them so that their deals don’t fail on cultural misunderstandings.


9 Replies to “Tips for Dealing with Foreign Buyers or Sellers”

  1. Hey Richard,

    Another great article, there are a lot of condominiums in Toronto that have been purchased by foreign buyers. What are the main factors that position a real estate broker/agent as a preferred choice for foreign buyers? Also when new housing/condominium developments arise is the building developer or a specific real estate agent the main sales contact?


  2. Great question Deidra….Make sure that you have a great team behind you of lawyers, accountants, tax advisors, Bankers and others to help provide the best of service and advice. Once you have one or two sales behind you, you will be the families choice….A lot of new housing may be sold off shore. Make sure you know the players and see if you can attend a Property Showcase in the country where these units are being sold.

    TRAVEL and understanding customs is a must.


  3. Thanks again for the insight Richard. I didn’t realize that property showcasing and travel were important factors in the real estate game.

    1. Think of it as if you were attending a community event…just in another community. Make sure you get to know by asking questions and exploring. You are not there to let everyone know how wonderful you are but to ask questions and learn from others…When you are open like that, you will make some great inroads.

      Best wishes…

  4. Excellent article that shows your grasp of the essentials for being involved in international real estate. I can only emphasis that one on one personal networking is the key and attending international conferences is the route to take. Membership in organizations like FIABCI (International Real Estate Federation) provides you with a level of credibility as well as taking the CIPS (Certified International Property Specialist ) course through NAR, CREA, REIC and possibly your local real estate board.

  5. Thanks for your comments all. I have not been on one Conference that I have not made a connection that has helped benefit my Toronto marketplace.

    Being a hub for so many, you always meet someone who has a Toronto link that needs to buy, sell or just gain some insight. The time is always so well spent.

    I have been very lucky to have experienced many markets that exist around the world and how those markets can affect our day to day, here in Toronto.

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