How Brokers From the Backwoods of Russia Sold Apartments in Miami during the Pandemic
Closed borders and lockdowns have made it nearly impossible to buy and sell international real estate as before the coronavirus pandemic. Nevertheless, the sales team of real estate brokerage Tranio found a way to fulfil their plan and carry out cross-border real estate transactions remotely.
In the first year of the pandemic, we sold new buildings in Spain, and apartments in Greece, Portugal and Montenegro that helped their owners gain citizenship and residence permits. Similarly, in Germany, we sold both micro-apartments as well as large investment products such as participation in housing construction or redevelopment projects.
In this article, we will share how we sold an apartment in Spain to a client in Turkey, all without leaving our Russian offices in Bryansk and Samara.
Executing documents remotely
The biggest issue we faced during the pandemic was in opening accounts with foreign banks. These banks made no concessions for the pandemic and demanded their client personally visit the branch in order to open a new account.
However, a foreign account is not required for all transactions. For example, in Greece and Montenegro, you can buy real estate with a bank account opened in the client’s country. It is also possible to rent an apartment out without a local bank account.
In order to buy an apartment in a foreign country without actually travelling to that location, our clients granted power of attorney to a lawyer, had it notarized and sent by express mail. For a client who was buying an apartment in Miami, for instance, we arranged a video conference with their local notary, in which he had to show himself and his passport on camera to confirm his identity and attach an electronic signature.
Partly because of the pandemic, there has been an increase in clients demanding properties that entitle them to residence permits and, consequently, the right to travel across closed borders this year. It is also possible to obtain a residence permit in a country like Greece, for instance, by remotely issuing power of attorney to a lawyer at the consulate. The client will still have to travel to the country and provide fingerprints, although most buyers plan to do this once travel restrictions are lifted.
Providing detailed analysis of the market and location
Most buyers did not intend to use the housing for themselves but planned to resell or rent the property out instead. It was important for these clients to have a clear picture of how much demand the apartment would be in by tenants, and what price they could ask for.
In order to meet this need, we produced an in-depth analysis of the market, which included comparisons with other similar apartments in the neighbourhood that were listed as being for rent or sale on local real estate websites.
The German market also launched video tours during the pandemic, which was useful for those buying apartments in Berlin.
Shooting reviews from drones and via video links
To our surprise, we learnt that more often than not, buyers were happy to purchase an apartment on the basis of video reviews, even if they had never been to the city of purchase before.
Our advice is to shoot high-quality videos of the properties beforehand, and to spend extra time on filming and editing. Clients were also prepared to view photos and layouts, and read text descriptions if the property was still under construction.
It was somewhat easier with new buildings as many developers have showrooms that demonstrate what the finished apartment will look like.
For some properties, we organized a video shoot with drones. For example, when selling houses by the sea, this helped us show clients the location from a bird's-eye view, so that they could see the distance to the sea, the nearby amenities, the cleanliness of the beach and become familiar with the surrounding area.
Of course, we also used online viewings in which our partners showed apartments to clients via WhatsApp and Zoom video calls.
We even sold one apartment thanks to a YouTube video! We had posted a video about apartments in Greece and how one can obtain a residence permit by making remote transactions. A few days later, we were approached by someone who had seen this video and wanted to buy an apartment in Greece.
Finding a local partner
Without realizing it, over the last 10 years we have gathered a large network of over 700 reliable lawyers and partners in the countries where we sell real estate. Our first remote transaction took place back in 2015. As a result, pivoting to remote transactions during the pandemic was significantly less challenging for us.
Supporting and assisting clients with rentals
Many of our clients were afraid to buy property for the purpose of generating rental business during the pandemic, as demand for short-term rentals is now minimal.
With this in mind, we advised our clients to enter into contracts for medium-term rentals. We also helped our clients find tenants by placing ads for the apartments on local portals, communicating with those who were interested, showing the apartments to future tenants with the help of our on-site partners, and taking the apartments under management.
Using the challenges of the pandemic as a newsworthy event
The constantly changing situation with lockdowns and quarantines in various countries created excellent opportunities for us to write or call potential clients who had already shown interest in our properties, but had not finalised any deals.
Our managers were able to start the conversation by talking about the latest pandemic updates and then transition into discussing the countries where it is easiest to make remote transactions. This approach resulted in clients having their interests sparked, making them more open to buying.
Most of our clients were driven by a desire to invest and buy property even before the pandemic. While one was so excited by the idea of purchasing property that even closed borders were not a setback for them, another was in a hurry to invest in a particular building under construction before prices went up.
For example, prices in Spain rose in 2020 - in contradiction of expert forecasts. This led some of our clients to decide to buy apartments in Spain without even an inspection, because they feared a further increase in prices.
Despite the pandemic, we noticed that the number of requests to buy property abroad increased by 69%. The combination of many hot offers and various lockdowns in Europe enabled us to get discounts from sellers. This was no small motivation for our clients.
Closed borders also had little effect on those investing in large development projects. In 2020 and the first half of 2021, we completed several major transactions in Germany where investors financed the construction of facilities in locations they had never seen. It is quite likely that they would not have gone to see the property even if borders were open.
For experienced investors, it is not quite so important to see the property and location as they make their decisions based on experience. Such clients are ready to make a deal after they talk to the developer and calculate the risks and profitability on their own. Personal presence plays a minimal role for those who are buying property as an investment, compared to those who are buying housing for themselves.
As a result, not only could we set up a process for completing remote transactions, but we also prepared a work plan for the future with those clients who are waiting for borders to open.