Fact: Affluent Asian buyers actually prefer to work with a non-Asian REALTOR®. I was surprised to learn that at the AREAA Convention in Los Angeles this weekend, but it was confirmed by more than one source during the "Understanding Asian Buyers Is More Than Correctly Handing Business Cards" panel. The key to working with Asian buyers is to understand their needs, preferences, and help them with aspects of the U.S. homebuying process that might be different from their home country.
By percentage, the Asian population is the fastest growing minority group, and they have a strong preference for cash, according to Danny Chang, Vice President for Citibank North America.
"One of the hardest things for international buyers to understand is getting a loan/having a mortgage, and understanding the process," said Chang.
Educating international buyers up front is essential, Chang added. “It’s important to know what they might not know – for example, the Chinese aren’t familiar with our property taxes. You don’t want to shock them with American property tax information when they are already in escrow.”
It may also take a Chinese buyer some time to warm up to the idea of having a mortgage. They do not like the idea of debt and might be unfamiliar with the loan process, so helping them to understand that getting a loan isn’t necessarily about a personal relationship, it’s about following the process and establishing credit in the United States with a car loan or a similar line of credit.
"Because many Asian buyers prefer cash, they might not realize that instead of paying cash for one property, they can get a loan and purchase two or three properties for investment," Chang said.
Chang was also the first to confirm the "myth" that the truly affluent Asians do prefer to work with non-Asian REALTORS®, a point that Heather Chong, Broker-Owner of Nu Merit Realty & Investments, agreed with.
According to Chong, a Korean-American, they prefer a non-Asian REALTOR® because, “Koreans, like many other Asian cultures, are very private. Even if - and many times because - they are wealthy, they don’t like to share their finances with other Koreans for fear that their private finances might be shared with others.”
Marketing to the Korean audience is best done through the newspaper, Chong said. Investors coming from Korea would first look for a publication like the Korean Daily (in Los Angeles).
They are also heavily focused on brand identity,” Chong said. “They want to hear big names like Citibank, Wells Fargo, etc., and when I host events, the attendance is always much higher when I partner with a well-recognized brand.”
Along those lines, Chong said the average Korean buyer wants to be impressed. They are more likely to choose a REALTOR® who has an office, a lot of designations, and is well-dressed.
“They want to know that you took the time to educate yourself through a well-known American company,” she said. “Drive a nice car, wear a suit. Well-presented agents do have an advantage with this audience. Speak in price per square foot – that is how they calculate the price, so have that number ready the first time you talk with them.”
Chong also indicated that a little extra work goes a long way with Koreans. “Go the extra mile, do a little extra work, and negotiate on their behalf. Then they will trust you, and trust is very important in the Korean culture.”
Last but not least, whether you’re an agent or a lender, if you are meeting a Korean (and the same goes for other Asian cultures) for the first time, bring a housewarming gift. Something small like a plant, flowers, or a box of specialty chocolate serves as a token of appreciation for being welcomed into their home, and makes them feel grateful. And don’t forget to take off your shoes when stepping into their home!
When an audience member asked the panelists what communication style most Asians prefer, the answer came as no surprise: face-to-face communication works best. Hand-deliver documents whenever you are able, go with them to escrow, and schedule meetings instead of relying on email, text, or phone calls.
In the end, the protocol to working with Asian buyers isn’t so different from anywhere else in the world: educate them in advance on parts of the transaction they might not be familiar with, rely less on impersonal communications and more on face-to-face, and present yourself well.
For more on educating yourself on working with Asian buyers, check out our past issue of Global Perspectives on this topic, take a look at our international Field Guides, and read past blog posts regarding cultural etiquette.