According to the National Association of Realtors,Foreign buyers are spending over $121 BILLION annually on residential properties in the USA. Of those foreign buyers, Chinese are at the top of the chain, spending $30,4 billion every year.
According to ListGlobally's Survey, in the past 12 months, 86% of American real estate agents have sold a property to at least one international buyer. Not only are international buyers interested in buying into the US housing market, they are also spending more money on real estate than local American home buyers.
The National Association os Realtors, also emphasizes this conclusion by saying that the median price for a foreign buyer was $292,400, compared to a median price of $249,300 for all existing homes. Chinese buyers are for sure the big spenders. The bought, between April 2017 to March 2018, properties with a median price of $439,10.
In terms of American real estate, and according to our survey, 67% of foreign buyers are interested in the buying houses and 22% are looking to invest in condos.
We were also able to conclude that 46% of foreign buyers are primarily interested in a property as investment, and 31% are looking to have a second residence/vacation home.
If we cross this data with the National Association of Realtors, we also add that for Chinese buyers in particular, top reasons for buying are:
If we consider only the Canadian buyers, they are most likely to purchase a property as a vacation home.
By increasing international exposure and acquiring more foreign leads, real estate agents will sell more, and will be able to do so more effectively and efficiently.
On the other hand, having a huge buyers database of foreign buyers also give agents a competitive advantage when convincing homeowners to list the properties with them for sell.
According to American real estate agents, Chinese foreign buyers have the biggest slice of the US market, with an astonishing 23%, followed by Canadians whorepresent 15%. Chinese buyers are spending $30,4 billion every year, and Canadians are spending 10,5%. If you are not promoting your properties worldwide, this is the slice of pie you are already loosing.
Working with foreign buyers can be a bit intimidating at first. Everyone wants to make the best first impression, but sometimes a lack of cultural awareness can be a hinderance.
As Chinese buyers continue to invest in the US housing market, it is becoming increasingly important for realtors to establish positive and lasting relationships. The challenge, of course, is in overcominglanguage barriers, cultural differences and lifestyle.
For this reason, we’ve included a few tips on working with Chinese buyers to get you started.
According to a study made by Rining WEI, published by Cambridge University, 67.4% of Chinese citizens with a junior secondary education or higher, have studied at least one foreign language. In Mainland China, 93.8% of those studying a second language are learning English. To offer a bit more perspective, this means that of the 416 million Chinese learning a foreign language, 390 million are learning English.
There’s no need to be apprehensive of working with Chinese buyers when it comes to a language barrier. This obstacle is easily overcome, as a person sincerely interested in buying real estate, will generally get someone trustworthy to translate information to them.
As a real estate deal progresses, the buyer will likely bring an English-speaking friend or family member to facilitate important meetings. If possible, try translate your emails, as this effort will show greater respect for the Chinese language.
As a society, Chinese people place great emphasis on maintaining group harmony. They will often hide individual feelings of displeasure for the good of the group. Frowning while someone is talking is seen as a sign of disagreement, and therefore most Chinese try to maintain a neutral expression in conversation.
The downside to these seemingly neutral interactions is that it may be tough to gauge genuine interest in a property. This means you’ll need to be savvy in finding other ways to determine how serious a buyer really is. One agent suggests asking how many properties a perspective client has viewed in the area, as well as why they are targeting a specific area.
Often the reason behind choosing a particular neighbourhood is based on relatives already living there or proximity to a university. You may also want to find out whether or not their funds have already been moved offshore, as moving money out of China can be both difficult and time consuming.
Remember that greetings are always formal. You should always try to address the oldest person first. Generally, a handshake is the most acceptable form of greeting a foreigner. Most Chinese place a high value on personal space and do not appreciate over familiarity or touching. More intimate gestures are reserved for family and close friends.
It is important to note, that in spite of the fact that the eldest person may be financing the property, the decision maker is often the younger person. Often parents, or grandparents, are looking for a property for their child or grandchild who will lives there.
Due to the One Child Policy in China, young adults are from parents who are also from a single child family, meaning that all attention is focused on this one young person. A fairly typical family scenario is a family of 7 with 4 grandparents, a young couple, and their child. In this dynamic,the key is to focus on the youngest family member, by highlighting features such as proximity to reputable schools, neighbourhood green spaces etc.
According to the Commisceo, an award-winning culture guide, the importance of face is a key concept in Chinese society. As a concept face can be loosely translated to mean honor, good reputation or respect.
Do not doubt the financial background of a potential buyer, and always speak to suggest they can afford MUCH more than the property they are viewing.
Deeply ingrained in Chinese culture is the overwhelming desire not only to generally show respect, but also to avoid the embarrassment of others.
That’s to say, it is important to do everything possible to maintain someone’s dignity, even if it means telling a white lie, or avoiding a conflict for the sake of protecting someone’s feelings. Avoiding mistakes, and making positive actions also show wisdom.
When meeting a Chinese client, it is best not to use sarcasm or self-deprecating humour. It is crucial to avoid losing face, and to avoid being the cause of someone else losing face.
In Chinese culture, business cards used to be an important part of Chinese culture and the custom was to treat the card with respect and as an extension of a person. These days, business cards are not commonly used, but most people use the messaging app WeChat.
Install WeChat to demonstrate cultural understanding. For bonus points, offer to add them first!
Hey you, over there! Did you know that in Chinese culture it’s actually considered to be quite rude to point with your finger?
If you are meeting with Chinese clients and you feel it’s necessary to point something out, you should always gesture with an open hand, as opposed to pointing a finger.
According to one cultural guide, it is best to get someone’s attention through eye contact than to bother gesturing at all.
Now that you’ve learned a little more about the foreign real estate market (and a few tidbits about Chinese culture!), you may have more questions, or perhaps you’re ready to dive right in. Either way, if you are interested in finding out more, contact us at ListGlobally.
ListGlobally is the largest international listing/marketing syndication company, marketing to +100 international portals and working with over 60 countries.
We offer greater global exposure, by adding over 216 million connections to your network of potential buyers. Property listing are automatically translated and displayed in 16 different languages across your network.
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