What to Consider When Buying a Second Home in the United States or Abroad
There may be no place like home, but who’s to say you can’t call more than one property that? In what likely comes as no surprise given mandated restrictions throughout the COVID-19 pandemic, a Wall Street Journal | Barron’s Group Intelligence Group survey of more than 3,500 respondents found that half of those working from home are considering purchasing alternate real estate locations. And almost 2 out of 5 surveyed already own at least one other home.
If your second home aspirations have you looking across the pond or across the border for a truly different change in scenery, you’re not alone. However, when working with American buyers, international real estate professionals are grappling with how to provide the same sensory experience of an in-person home tour virtually.
“In southern Spain, Marbella, what we are encountering is instead of potential buyers flying into our city to personally view properties, we are shifting to previewing, as we call it, through video streaming services or personal videos that we pre-select, anticipating what a buyer will eventually want to see in person when they travel to Spain,” says Ugo Bagration, Head of Business Expansion with Berkshire Hathaway HomeServices Marbella.
To fully understand the state of second home buying around the world, we spoke with real estate experts, like Bagration, who represent coveted international markets. Their insight offers clear guidance on how and when to make decisions related to these monumental purchases.
Q: How is purchasing a second home in the U.K. different this year than in previous years?
Martin Bikhit, Managing Director of Berkshire Hathaway HomeServices Kay & Co., London: A big change we’ve seen is that certain areas of the U.K., and, in particular, scenic rural areas where there’s a lot of second home ownership, is that local authorities or municipal organizations are somewhat restricting who can purchase homes. At the onset of the COVID-19 pandemic, there was a big influx of second home buyers who purchased for weekend getaways. That drove up prices and essentially forced local people out of the housing market. Today, there are still plenty of opportunities for prospective second home buyers in these markets, it’s just important for them to understand what’s available. For instance, certain categories, like new construction, are more available for purchase—which is often a good option for vacation homes as they require less maintenance than older homes.
Q: What advice might you have for buyers looking to find a deal south of the border?
Alma Cecilia Ramírez, Broker Owner, Berkshire Hathaway HomeServices Colonial Homes San Miguel: Properties in the historic Centro District of San Miguel are a higher price point—so to find a deal, you just have to go just slightly outside of Centro to one of the many diverse neighborhoods. These areas are still walking distance to Centro, and therefore still desirable. For example, while you’ll pay upwards of seven figures for a home in Centro, adjacent areas like San Antonio or Guadalupe have two-story homes with two bedrooms, two-and-a-half bathrooms, views and walkability starting at $350,000 price points.
Gregory R. Gunter, Broker Owner, Berkshire Hathaway HomeServices Colonial Homes San Miguel: It’s really important to work with a knowledgeable, experienced and licensed REALTOR® who can give you the price history on a home. It’s a small community here, so in many cases high-volume REALTORS® like me will know a little bit about the seller’s motivation or lack thereof, so we can give our buyers specific advice, such as, “Oh, this seller is not really motivated. They haven’t changed the price in a year.” Or it might be, “We know that the sellers have moved back to the United States and it’s been on the market for six months. They’re likely going to be much more motivated to negotiate with you on the price.” The only person that’s going to know that information is an experienced REALTOR® who knows the community and inventory really well.
Q: Why should an American consider buying a second home overseas?
Bruno Rabassa, CEO, Berkshire Hathaway HomeServices Larvia (Madrid and Barcelona) and Berkshire Hathaway HomeServices Marbella (Costa del Sol): While prices are rising here, our area of Spain is still much cheaper than Los Angeles, Miami or other popular destinations. And right now it’s a buyer’s market, which isn’t the case in the U.S. There is a novel demand on home buying and, in some cases, the sellers must adjust their prices. There are others in which their type of properties have gained appreciation on the market because of swimming pools, large gardens or some other amenity that is in high demand. But ultimately now is the time for buyers.
Q: What are some benefits to purchasing in Europe that many foreign buyers might not know about?
Michael Vincent, CEO, Berkshire Hathaway HomeServices Portugal Property: If you spend half a million euros on a property in Portugal, you’ll get what’s called a Golden Visa, which allows free rein, free movement around the Schengen Area of European countries. That could be a brand-new accommodation or flat. As long as you transfer half a million euros into real estate, then you’re pretty much certain to get that Golden Visa, which is appealing to non-European buyers. But what they need to research is what they really want from their second home. Are they looking for coastal or city life, like Lisbon and Porto? They’re vibrant cities with a lot going on—the arts, culture. Or maybe they’d prefer Algarve, which is a bit more relaxed, where you’re living on 155 kilometers of coastline and beautiful beaches.
Q: Mexico has long been a popular second home destination, but how has the market evolved over the past few years to be more inclusive of all buyers’ wish lists?
Luis A. Mirabent, CEO, Berkshire Hathaway HomeServices Cancun Properties: The state of Quintana Roo, where Cancun is located, has always been very attractive, mainly because of the sun and the sea. However, interest has been growing here with a new set of buyers because of the diverse range of properties that have come on to the market. While Cancun remains popular, the market is now leaning toward Tulum and Playa del Carmen as well. When you drive through the city of Tulum, there is so much construction. They don’t have streets—they’re building in the jungle! It’s surprising, but if you see they are building, then you know people are buying. People like that natural atmosphere.