As the nation celebrates Independence Day, many Americans think about what it was like for the early settlers arriving on our shores for the first time. Those early pioneers faced much uncertainty when it came to basic survival and the ability to provide a secure future for themselves and their families. Today’s immigrants may not face such extreme conditions, but they do have some significant hurdles to clear when it comes to establishing savings and a credit history.
“It can be very intimidating for new immigrants to grasp all of the complexities of our economy,” said National Foundation for Credit Counseling© (NFCC©) vice president of public relations and external affairs Bruce McClary. “The best approach to a successful start is to focus on basic finance at the personal level.”
To help new arrivals understand some basics about money management in their new country, the NFCC offers the following tips five tips:
Savings – The key to financial stability is savings. The sooner a plan is put into place, the easier it will be to avoid unnecessary debt. The most important thing determining the success of a savings plan is consistency. Make a schedule of deposits and assign them the highest priority in the budget. It is suggested that non-emergency savings equal a minimum of six months of after tax income. Success toward that goal can be boosted by keeping debt out of the way, and manageable within a budget. There are a number of online budget tools that can help make this an easier process, and part of a healthy financial habit.
Establishing Credit – The best way to establish credit is to start small and work toward a larger goal. Without a credit history, it is nearly impossible to be approved for a credit card. There are starter lines of credit with products such as secured credit cards. These are credit cards that require a cash deposit for collateral, do not require a credit check, and allow cardholders to have charges and payment activity reported to the credit bureau. This helps establish a credit history that can be used later to apply for lower interest credit cards, and qualify for auto loans or mortgages.
Avoiding Scams – Faster is not better when it comes to financial success, and there is no magic solution to complex problems. Sadly, there are too many “get rich quick” schemes designed to create false hope and scam people out of their last dollar. Use resources like the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) to learn how to identify and avoid dangerous scams that could cause irreparable financial damage.
Housing – Affordable housing is a challenge, even for those who are not new citizens. The first thing anyone should do is learn how they are protected by the fair housing laws. That information is available from the Department of Housing and Urban Development (HUD). If home ownership is a financial goal, take steps to understand the available options and what programs may be available locally to help make that goal a reality through down payment assistance or homebuyer education.
Retirement – It all comes back to the golden rule of savings, making it a top priority. There are different methods of saving and planning for retirement, including 401(k) and Individual Retirement Accounts (IRAs). Take time to learn how they work and which may be the best option. Above all else, never borrow against future financial stability by withdrawing from these accounts before retirement.
Spanish-speaking homebuyers comprise one of the fastest-growing, yet underserved markets, in the U.S.
Last year alone, Hispanic households grew by 320,000, and Hispanics accounted for 40% of all U.S. household growth.
According to the Urban Institute, Hispanics will account for 55.5% of new homeowners from 2010 to 2020.
Spanish is the most spoken non-English language in U.S. homes: 37.6 million persons ages 5 years and older speak Spanish at home, according to the Pew Research Center.
The potential of this market is striking, since just 46% Hispanics currently own their own homes, reports the National Association of Hispanic Real Estate Professionals (NAHREB).
Future growth projections are staggering: Demographic projections indicate that the U.S. Hispanic population will reach nearly 120 million by 2050, a 592% increase since 1970, NAHREB reports.
The desire to buy is also there: As Gerardo “Jerry” Ascencio, chairman of the NAHREP Foundation and a broker-owner in San Fernando, Calif., poignantly has said, “Nobody in the Hispanic community dreams and aspires to be a tenant.”
New Bilingual Automation Technology for MLS data
Imagine your virtual tours, website, curbside marketing efforts and rental inquiries all featuring the ability to speak (or narrate MLS data) in a perfect Spanish sentence-structure.
This is not the conversion of your web text into Spanish text. That’s old technology that has been available for years. This technology is very different. It’s audio-based.
VoicePad, known for English narration technology from an MLS feed, has now completed the same audio platform for Spanish.
Think about providing property information in Spanish by phone with live transfers that automatically route Spanish-speaking inquiries to Spanish-speaking agents. This technology takes the language barrier “off the table” and allows “English-only” agents to compete on Spanish-speaking lead-generation efforts. In addition, Virtual Tours can now be narrated in Spanish (and English) without the need for expensive voice talent. This is a huge breakthrough.
Many, if not most, Spanish-speaking buyers would prefer to work with someone who speaks Spanish. Granted, but without a process to assist these buyers, you lose the potential to refer this lead to someone on your team or in your office who does speak Spanish, or worse, to another company.
VoicePad innovative narrated tour technologies now replicate Spanish as well as English, in conversational syntax. VoicePad does this for both residential properties for sale and rentals, for Virtual Tours and for Mobile sites as well. It has taken the company years to sequence MLS data into the Spanish language. The result is that every MLS data feed can now speak fluent Spanish.
VoicePad is currently updating 3 million tours narrated in conversational Castilian Spanish every 120 minutes, automatically from MLS data.
Don't let language skills be a barrier to generate business from one of America’s fastest growing home buying markets, even if you don’t “Habla Español.”
For more information, visit VoicePad.com.
From the Experts at Moneycorp
The real estate market in the U.S. has made a strong recovery in recent months, leading international buyers to once again view the U.S. as a safe haven for investment. With well-defined, secure property rights, the U.S. treats sales of real estate to foreigners almost the same as sales to U.S. citizens. However, compared to domestic buyers, overseas investors often have additional financial considerations when purchasing real estate in the U.S. Such factors can significantly impact the cost of a property and influence how real estate professionals engage with them.
One thing that is a certainty in any real estate transaction is taxes. Unfortunately, these can be more complicated in transactions involving foreign nationals, given that the tax laws of more than one country may apply. A foreign property owner’s tax liability in their home country will vary depending upon where the purchaser is from and whether that country has a tax treaty with the United States. As a real estate professional, you can provide overseas clients with guidance around the benefits of consulting a tax attorney familiar with their home country’s treaty with the U.S.
The United States government requires that foreign nationals pay income taxes on net income received from rental property. Therefore, you should also be familiar with the fundamentals of U.S. federal income taxation of foreign investors with U.S. rental income in order to advise your clients effectively.
With U.S. banks returning to foreign national mortgage lending, it is possible for qualified foreign investors to obtain financing. However, overseas buyers are more likely to pay higher interest rates and be required to make larger down payments (often 40 percent or more of the purchase price). This is due to the relative risk of a foreign buyer who may be impossible to serve with legal proceedings and whose assets may be untouchable; versus a domestic buyer who will be easier to track down and who is subject to the state and national laws, should a default occur.
Before purchasing real estate, your clients—whether domestic or international—will have a budget in mind. The difficulty for overseas investors buying here in U.S. dollars is the fact that negative fluctuations in the currency market can seriously impact their budget. This is particularly pertinent given the large sums of money being transacted, coupled with the current strength of the greenback.
By providing your clients with advice around the benefits of using a foreign exchange specialist, you can help them get more from their international money transfers. You can explain how they not only offer bank-beating exchange rates and low transfer fees, they also provide a range of specialist tools to help protect their customers from negative exchange rate movements. An exchange expert might suggest a “forward contract,” which allows buyers to lock into an exchange rate up to two years in advance—ensuring the cost of their purchase will not rise between the time an offer is made and the transaction is completed.
For more information, visit www.moneycorp.com/usa.
U.S. immigration regulations and procedures can be complex and rules change frequently. As a real estate practitioner, even if you focus on global real estate, you are not expected to, nor should you attempt, to play the role of an immigration attorney. However, foreign real estate investors want (and need) to know how U.S. visa regulations may impact access to their properties. The U.S. government places few restrictions on ownership of real estate by foreign individuals and companies, making it fairly easy for international investors to purchase U.S. properties. But before a foreign buyer makes a purchase, they need to understand that their access to the property may be limited in terms of permissible entry and length of stay. The type of visa a foreigner has been issued can make an enormous difference.
Real Estate professionals should not offer advice about immigration and visa matters; however, they should be aware of visa regulations. General knowledge of visa matters can help the real estate professional alert foreign buyers and sellers so that they can seek expert advice and make informed decisions. Below is information regarding different visa types. If you are working with global clients, this information should be on your radar.
Visa Waiver ProgramThe Visa Waiver Program (VWP) allows citizens of participating countries to travel to the United States without obtaining a visa, for stays of 90 days or less for tourism or business. Those who wish to stay longer need to apply for a visa. It is important to note that Canadian citizens do not fall under VWP. They may stay in the U.S. for up to six months.
The following are examples of activities permitted while in the United States on the VWP.
REALTORS® sell homes both to resident and non-resident foreigners. How have sales to non-resident foreigners been, given that major parts of the world have been in economic slowdowns and that the value of the dollar has been appreciating?
The Answer is “Holding Up Reasonably Well.” As part of the REALTORS® Confidence Index survey REALTORS® provide information on existing home sales to non-resident foreigners. The level of sales fluctuates from month to month, so the graph presents the data on a 12 Month Rolling basis.
Sales to non-resident foreigners are currently in the 100,000 per year range, down a bit probably due to the current strength of the dollar and economic slowdowns in some foreign countries. With international economies now recovering, the outlook should be for additional sales and somewhat higher prices.
International investment in U.S. real estate could soar to new heights in 2015, thanks to the reciprocal U.S./China visa agreement that will issue five-year, multiple-entry visas to students and 10-year, multiple-entry visas to business travelers and tourists. The policy changes went into effect Nov. 12.
Among other effects, the new visa agreement mitigates challenges for those investing in property abroad—namely, real estate purchased by Chinese parents for children studying in the U.S. For students participating in four-year degree programs, the five-year extension presents a welcome change.
“Chinese individuals on the fence about investing in the U.S. are encouraged by the new visas,” says Andrew Taylor, co-CEO and co-founder of Juwai.com, a global real estate information platform serving the world’s Chinese communities. “They make a big headache go away.”
Barring outside factors, Taylor predicts at least a 15 percent increase in Chinese investment in 2015. According to the NAR 2013 Profile of International Home Buying Activity, China and Canada have been the fastest growing sources of international clients. Transactions involving Chinese buyers account for 12 percent of total reported international transactions, with many opting for all-cash purchases.
“Mainland Chinese buyers have the highest average price range and pay in cash about 70 percent of the time,” Taylor says. Juwai users report an average budget of $3 million and a median property purchase price of $425,000—well above the overall U.S. median of $199,500. Top areas for real estate investment include New York City, Los Angeles, Philadelphia, Detroit and Houston.
For real estate practitioners, the new visa policy imparts an opportunity to carve out a global niche. Chinese clients, like any other client, seek an agent that maintains high standards of professionalism.
“International buyers have an exceptionally strong bond to their agent,” notes David Lauster, real estate specialist, U.S. State Department, in the Sept. 2014 issue of Real Estate magazine. “They display an admirable and long-lasted appreciation for the assistance and knowledge that agent brings to the transaction.”
That assistance and knowledge trumps all – including specialized skill sets. Fluency in a second language, for example, is not necessarily required.
“One of the biggest questions I get is, ‘Do I have to learn Mandarin?’ The answer is no,” Taylor says. “Just do your job well. That’s enough.”
“No special qualifications are needed,” says Noah Seidenberg, broker associate with Coldwell Banker Evanston in Evanston, Ill. Evanston is home to one of Northwestern University’s campuses, which collectively house over 5,000 international students, faculty, researchers, visiting scholars and staff from more than 110 countries. Seidenberg receives inquiries from foreign buyers on a regular basis, particularly during peak enrollment periods at the university.
“The process legally is often not the same in the U.S. as it is when purchasing property and obtaining title in their native country, so there is a period of explanation, walking the person through the steps, much like a first-time buyer,” Seidenberg adds.
With the policy changes propelling an already emerging segment, Taylor recommends taking advantage of the boost with a two-fold approach:
“Every [Chinese] family has its own situation,” Taylor explains, “but underlying all of them is a faith in the U.S. real estate market and a desire to own their part of it.”