A New Wave of Homebuyers

August 20, 2013

Multicultural homebuyersReal estate professionals aren’t sitting around waiting for immigration reform. They already are catering to the needs of potential homebuyers from abroad.

“All immigrants have beliefs that may directly impact their real estate decisions,” said Michael Soon Lee, a California real estate broker and expert on multicultural homebuyers.

“Immigrants have cultural tendencies. Home sellers need to be sensitive to those cultural requirements. I’m a fifth-generation Chinese-American, and I still have some of the beliefs of my ancestors,” Lee said.

He stressed the importance of discovering what immigrants want because of their major economic effect on housing now and in the future. Data from the Census Bureau show that immigration is the main driving force behind U.S. population growth.

“Housing purchases by immigrants are expected to increase significantly in some markets, including Miami, San Francisco and Chicago, which is a major point-of-entry city,” said Jed Smith, managing director of quantitative research at the National Association of Realtors.

“International buyers account for 3 percent of all home sales, and half of them are recent immigrants,” said Smith, adding that immigrants prefer to use real estate agents who speak their native tongue.

Chicago is one of the hot spots for Asian buyers, including Mei Xinyi, a Chinese graduate student at the Illinois Institute of Technology who bought a one-bedroom condominium unit near the campus.

Xinyi noted that the homebuying process is much different here than in China, and he added that he bought a “good house at a good price at the right time.”

His 12th-floor condo offers sweeping views of downtown.

Paul Knott, broker associate with Re/Max Horizon in Elgin, worked with Xinyi on the deal. About 40 percent of his clients are from China.

“Many Chinese buyers are surprised at our annual property taxes. In China, a house is purchased for 70 years and the taxes are paid upfront,” Knott said.

What do immigrants want in housing?

“The vast majority rent at first. Then every year their desire to buy increases,” said Natalia Siniavskaia, housing policy economist at the National Association of Home Builders.

In her “Immigration¬†and Housing Demand” study, she forecasts that new immigrants will occupy more than 2 million multifamily units and more than 1.2 million single-family homes by 2020. Her estimates are based on the arrival of 1.2 million immigrants a year, the low-end projection by the Census Bureau.

Siniavskaia noted that of recent immigrants, 42 percent were from Asia and 40 percent were from Mexico and the Americas.

“When immigrants buy a home, they feel they’ve made it in America,” Lee said.

But to make a deal with recent immigrants, Lee emphasizes the need to understand cultural differences.

“When those from abroad go house hunting, they can be unintentionally insulted several times during the first 30 seconds in a sales office,” said Lee, author of “Opening Doors: Selling to Multicultural Real Estate Clients.”

“For example, shaking hands with Asian or Middle Eastern women violates their culture. Personal space is different around the world. Americans stand about 21/2 feet apart when talking. Japanese may shake hands but then bow and step back. Middle Easterners often step close to your face. Eye contact shows honesty, but some Asians may look down to show respect,” Lee said.

He added that multicultural customers don’t just look at houses. They are good savers, he said, and are interested in buying.

This article originally appeared in the Chicago Tribune on August 17, 2013.

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