Recently, Engel & Völkers Hong Kong had the pleasure of welcoming Sandra Miller, Broker and License Partner of Engel & Völkers Santa Monica, Los Angeles, California. Sandra is a Certified International Property Specialist and Residential Specialist who holds the distinction of being a Private Office Advisor, one of the only 28 Engel & Völkers advisors worldwide who belong to this elite club.
Sandra is also a member of the Beverly Hills Greater Los Angeles Association of Realtors and the Malibu Association of Realtors and specializes in the real estate transactions in some of the highly desirable residential areas of Los Angeles. Areas like Santa Monica, Pacific Palisades, Brentwood, Venice, Marina del Rey, Malibu, West Los Angeles, along with other luxe properties around the world are within her purview.
A consistent top-50 producer, Sandra is renowned for her impeccable personalized services and immaculate attention to detail. Hailing from an illustrious background in Corporate America, Sandra brings more than twenty years sales service to every real estate transaction. Her wide experience and in-depth knowledge of the market is an invaluable asset, for her clients who are often undertaking a significant life-changing decision.
We got a chance to speak with Sandra, to ask her about her impressions of Hong Kong and its real estate market. We also were able to to discuss with Sandra, the buying prospects for an international buyer wishing to participate in the Los Angeles market
1. Was this your first trip to Hong Kong? How different is Hong Kong from Los Angeles?
[Miller, Sandra] this was my first time visiting Hong Kong. Los Angeles Metropolitan area is 4,850 sq. miles vs. Hong Kong’s 423. Hong Kong is dense with many high rises and in Los Angeles we are spread out with what we call low rises. Even in downtown Los Angeles, the highest floor building, is only 77 floors high. bit.ly/1L9Uowd
2. Can you imagine living in Hong Kong? Is there anything that particularly impressed you about our city?
[Miller, Sandra] I can see myself living in the city; I love the pulse of the city and how dense it is.
3. The California Association of Realtors via its 2014 International Home Buyers survey indicates that one of six buyers in the state is an international client. Is the LA real estate market easily accessible to international buyers?
[Miller, Sandra] There are no restrictions on purchasing property and compared to other gateway cities, our properties are much less expensive.
4. Do international buyers in the USA need to have agent representation? Engel and Volkers is a global company with franchises all over the world perhaps this represents a chance for collaboration between Engel and Volker offices in different countries?
[Miller, Sandra] I highly recommend that international buyers have agent representation. The process here can be overwhelming for someone who is not used to the system. One of the main points that new buyers in our market miss is that if they go directly to the agent representing the seller, that agent then becomes a dual agent and does not necessarily have the buyers best interest in the transaction. Also, it is important that an international buyer be educated on the tax system (both property and personally) and the legalities of how to acquire title as well as the best way to utilize currency exchange companies to save money when bringing money into the US.
[Miller, Sandra] Being a member of a Global brand like Engel & Völkers allows each of us to know that when we refer a client to that market, they will be getting the best and most informed service possible.
5. What kind of LA homes do international buyers favor?
[Miller, Sandra] There are such a large variety of properties available. It really depends on why they are buying. If they are buying a place for their children to live while they are attending college, they tend to go with a Townhome or condo, if they plan to live in the property then they purchase a single family or “landed” home.
6. Records indicate that in the LA real estate market, the international buyers hail predominately from Asia especially China. Are the Chinese buying LA properties for investment solely or do they occupy them as well?
[Miller, Sandra] The Chinese buyers are buying commercial investment properties as well as townhomes, condos and single-family homes to live in.
7. Are the international buyers mainly all-cash buyers? If so, do such transactions have an impact on the local LA real estate market?
[Miller, Sandra] I would say that 50% of international buyers are all cash. LA is a very wealthy city, and it is not uncommon for buyers to pay all cash. It does make it hard for a first-time buyer to compete with foreign money.
8. What kind of costs can an international buyer expect to pay during the process of acquiring a property in LA? Are there taxes and duties that an international buyer needs to be aware of?
[Miller, Sandra] If you’re purchasing a million dollar property and are paying cash, closing costs are generally 2% of the purchase price. There are no taxes due at this time on the buyer’s side of the transaction (sellers pay all transfer taxes in Los Angeles). Property Taxes are paid in October and February and are generally 1.125% of the purchase price.
9. How long does a real estate transaction in LA take from the time of identification of a suitable property to closing? Does the buyer need to be in LA throughout the buying process?
[Miller, Sandra] We can close as fast as ten days. If paying cash, the buyer does not have to be present.
10. What about rental prospects of the property? After an international buyer has bought an LA property for investment purposes do you help market it?
[Miller, Sandra] Yes we are a full-service property agency.
11. Is an international buyer of property in the USA subject to taxes such as property tax, capital gains, and estate tax?
[Miller, Sandra] I can only speak for California. Property taxes are 1.125% of the purchase price; this amount does not change unless you change your basis (refinance, build and add sq. footage). Capital gains and Estate Tax is an issue when selling the property. We will introduce the buyer to tax experts prior to purchasing a property who can help to minimize the impact.
12. What according to you are the best areas of LA for investment? What kind of returns can an investor expect?
[Miller, Sandra] That would really depend on what type of risk the buyer is willing to take. If they want a safe place to park money, then I suggest the Westside of Los Angeles (Beverly Hills, Santa Monica, Brentwood, Westwood, Malibu, Marina Del Rey, Venice etc). We see an average property value increase of 4-5% per year in these areas over the past 20 years. A good investment on the commercial side will show a 5% cap rate.