Money and desire are not the only prerequisites for international buyers of U.S. property.

Edward Mermelstein, a real estate lawyer who works mostly with foreign buyers, knows well the challenges — particularly in the Manhattan market and particularly when the buyers happen to be from countries with which the U.S. has strained relations or are otherwise under special financial reporting requirements.

In the past several months, said Mermelstein, "Some institutions are no longer lending to foreign nationals, period."

And Ukraine-born Mermelstein, founder of Edward A. Mermelstein & Associates, said that has led some of his clients to seek out less-conventional loans from hedge fund companies, as an example.

Buyers from England, Ireland or France tend to have a much easier time purchasing U.S. properties than buyers from some other nations that have added financial restrictions or complications, he said.

Banking regulations, he noted, can make it difficult for buyers from certain countries to move money and open bank accounts.

"The ‘blacklisted’ countries are definitely having a rough time trying to get loans these days, and most of them end up closing all cash and then end up trying to find financing after the closing takes place," he said. "Many of my clients from either Russia or Saudi Arabia can close all cash — and many of them do. That generally will be a plus in a purchase transaction," he said.

"These days many sellers are looking for quick closings without contingencies. If there is any sort of financing contingency it pretty much puts the brakes on the transaction, indefinitely."

The financial holdups for foreign buyers are not just on the U.S. side — "Many of the hurdles are coming from the countries where the funds originate," he said. "There may be difficulty in moving funds out of the country where they are coming from."

Mermelstein encourages his clients who may have difficulty establishing credit history in the United States to begin the process about four to six months prior to the actual purchase to allow ample time to begin due diligence toward the purchase.

In the Manhattan market, Mermelstein noted that co-op properties are "generally out of bounds for most foreigners," as co-op boards may not favor purchases by foreign buyers. "New York is a fairly tough nut to crack," he said.

"In Manhattan and the New York City area for the most part, you are talking about private homes, townhomes or condominiums (for foreign buyers)."

Mermelstein said his international clientele tends to be looking at multi-million-dollar private homes, townhomes and condos.

"There is a very significant influx of Eastern European purchases," he said, notably from Russia, as well as buyers from France, England, Ireland, Saudi Arabia, Dubai, China and South Korea.

There are 12 lawyers and 12 languages spoken in his office, he noted. His company, which also maintains an office in Moscow, works with commercial and residential real estate transactions alike.

Business at his firm is largely based on referrals from past clients, he said. "We don’t have to do much in the way of advertising," though he said that the company’s lawyers do "travel quite a bit … around the world."

Some clients are purchasing a home in the United States as a third or fourth property — "they (may not) look at it as an investment — they do see it as something very prestigious to own a home in the U.S." The returns may be better in their own countries, he said.

But the value of the euro versus the dollar has been an incentive for some buyers, Mermelstein said. "Anyone looking at it from that perspective tends to want to close as quickly as possible," he said.

Political conflicts around the world do play into purchase decisions, too, he noted. "If I have someone who at some point wasn’t considering the U.S. as a place to invest — they (may) once their own country has internal issues. They do look outside of their countries to safeguard funds and move to some sort of real estate play in the United States."


What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
It's not too late to join us for Connect Now today. Participate in workshops, networking and more.REGISTER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription