By Christina B. Farnsworth. Do you avoid looking Latino shoppers in the eye or back away while speaking to them? Do you look first-generation Asians directly in the eye? Depending on culture, the same behavior that is welcomed by one group may be disdained by another. You may be acting in ways that make potential buyers cringe or, worse, run to your competition instead of buying your home.
Before you claim you offer all shoppers a fair shake and don't discriminate among home buyers, consider this shopping test to evaluate discrimination, conducted last year by HUD and the Urban Institute.
Nationally, real estate sales professionals favored white shoppers over blacks with the same socioeconomic backgrounds 17 percent of the time and favored non-Hispanic whites over same-profile Hispanics in 19.7 percent of the shopping tests. A report of the test, "Discrimination in Metropolitan Housing Markets," was released in November 2002 by the Urban Institute. The study noted discrimination rates had dropped -- 12 percent for blacks and 7.1 percent for Hispanics -- but discrimination lingers nationwide.
"White home buyers," the report stated, "were more likely to be able to inspect available homes and to be shown homes in more predominantly white neighborhoods than comparable black home buyers. Whites also received more information and assistance with financing as well as more encouragement than comparable black or Hispanic home buyers.
Treatment for both black and Hispanic shoppers varied from one metropolitan area to another. Black shoppers experienced more discrimination than the national average in Birmingham, Ala., and Austin, Texas, and much less discrimination in Atlanta and Macon, Ga. Hispanics, according to the report, experienced "consistent adverse treatment in Austin and New York," but were treated significantly better in Pueblo, Colo., and Tucson, Ariz.
Listen and respect
Discrimination is not only illegal and rude, but also foolish from a business perspective. The United States is becoming a diverse and polyglot nation. The U.S. foreign-born population is 31.1 million people (11.1 percent of the total population), according to the 2000 U.S. Census, which represents a 57 percent increase over the 1990 Census. This number represents only the foreign born, not the millions of second and third generations, from various ethnicities and cultures, who were born here. And the numbers will only increase.
Henry Cisneros, former HUD secretary and president of the American CityVista home building company, projects that owner-occupied minority households will grow by five million between 2000 and 2010. Cisneros said in a presentation titled "Homes for Americans in the New Century" that discrimination results in missed opportunities -- and that hurts the bottom line.
And just so you know, "multicultural" has superseded the terms "minority" and "diversity" as the politically correct word for these burgeoning ethnic markets. But more important than labels and language is how you treat the people who come to shop your new homes.
Thomas W. Richey calls multicultural home buyers the "secret opportunity." If you learn how to meet the needs of buyers from cultures different from your own, you will have a continuing source of business and loyal referrals, he says. Richey, of Richey Resources Co., in Houston, teaches home builders how to reach varied cultural markets. His presentations focus primarily on six cultural groups: African-Americans, Latinos (the term he and many others prefer to describe those the Census describes as Hispanic), Middle-East Indian, Chinese, Japanese, and Vietnamese
Location, location, location may be the key to selling a house, but "respect, respect, respect is the key for selling a home" to someone from another culture, says Nancy B. Edmiston. Edmiston, of Nancy B. Edmiston & Associates, Pearce, Ariz., is the author of The Protocol of Multicultural Sales.
In addition to showing respect, consultant Bonnie Alfriend emphasizes that selling to multicultural buyers rests on building relationships. "Relationship is number one with Asians, whereas in the United States what is legal is number one," says Alfriend, of Alfriend and Associates, Pebble Beach, Calif. "Study your customers' cultures; don't be afraid to ask questions. Most people are delighted to share their heritage with someone who is truly interested," she says.
Dodging preconceptions and mastering foreign cultures is far from simple. A single label does not totally describe a culture, and almost everyone bridles at generalization. Cultural differences certainly exist among people who live on the same continent, but sometimes even within the same country. Asian cultures, for example, vary greatly. The sales associate who mistakes a Korean prospect for Japanese or Chinese (and vice versa) quickly offends the prospect and may very well lose the sale. And in Brazil, the dominant language may be Portuguese, but its ethnic heritage includes Indians, Africans, Germans, and Italians.
Even calling the person who sells homes a "sales associate" is problematic. For many cultures, "sales" is an ugly word describing someone untrustworthy, Richey says. He recommends the titles "new-home consultant" or "concierge."
Language barriers are best broken with courtesy rather than lung power, Alfriend says. Prospects who speak English as a second or third language are likely not deaf, and speaking loudly and too slowly will neither aid comprehension nor create the relationship you seek. Do speak clearly but don't use slang. A smile is a universal language, she says, but humor does not always translate well. And when your prospects speak, never interrupt.
Be mindful of your prospect's sense of personal space, Edmiston says. Standing too far away can be offensive. Hispanic and Middle Eastern prospects are often accustomed to standing closer to one another than many in the United States find comfortable. Alfriend cautions that Hispanics will be offended if you back away from them. And a relevant Middle Eastern proverb starts with, "If I cannot feel your breath," she notes. Some cultures find the standard U.S. handshake too strong and aggressive; proffer your hand but gracefully withdraw it if your prospect does not respond. Hispanics tend to like eye contact and prefer to do business with people who do not look away or yawn while conversing, Edmiston says. Yet, according to Alfriend, many Asians believe someone who looks them in the eye offends, because that person "wants to search their soul."
"Don't ask about children," Alfriend says. The United States is one of the few cultures for whom personal questions about children are OK. And don't get familiar too fast, or press for yes or no answers. Relationship-based cultures often teach members to say "yes" when they really mean "no," because hurting another person's feelings by expressing disagreement is to be avoided.
The right design
How you interact with customers is important, but details and design of the house matter, too.
Answering "What to build?", Baltimore architect Michael Medick says, "Ask. You can't be preachy -- you have to listen to what people want." Edmiston notes that many cultures seek to avoid placing their elderly relatives in nursing homes, welcome multi-generational living, and frequently entertain family. Thus in-law suites, large family entertainment areas, and extra bedrooms become part of the design equation. Edmiston cautions, though, that these observations in no way obviate the need for local market research. Neighborhood focus groups are invaluable, Medick agrees.
With the popularity of Feng Shui spreading among whites, sales associates may be surprised to discover that many young Asians view such practices as folklore. However, the parents of Asians are often part of the buying process, and the parents may value such practices. Resolving such subtle conflicts may keep sales associates on their toes. For example it's a good idea to accompany the parents of buyers on a tour of models, Edmiston says. The well-versed new-home consultant will tag along, if only to counter a potential objection with a gentle reminder that problem situations can be remedied. A little extra effort beats losing a sale when parents reject something their children love, Edmiston says.
Cultures differ in their decision-making methods. "Be patient," Richey says, especially when going through the contract. Imagine if you went to China and purchased a home in which all of the documents are written in Chinese. You wouldn't want to be rushed through the process. You would want to make sure that you understood what you were getting and the terms.
Many people of other nationalities love to negotiate. It is important in many cultures that you not be made the fool by paying too much. It helps to remain polite and to explain how our system works, Richey says. "And you can add a ' sweetener,' such as backyard landscaping, to the deal," he says. But if you do, make sure everyone gets the same sweetener because buyers will tell each other.
Overall, while techniques vary, the traditional keys to successful sales remain sincerity, good manners, and respect. And targeting diverse cultures can help your business grow. Immigration and births among non-white groups contribute mightily to U.S. population growth. Between 1991 and 2000, an estimated nine million people from other countries legally immigrated to the United States, according to the Immigration and Naturalization Service. And another 10 million will arrive before the end of 2010, accounting for 27 percent of total household growth. Moreover, the U.S. Census recorded nearly seven million people who checked the multiple races boxes, presented for the first time on the 2000 Census. In 2000, 51.7 percent of the foreign born were from Latin America, 26.4 percent from Asia, and 15.8 percent from Europe; Latin America and Asia together accounted for 78.2 percent of the foreign-born population.
The new majority
By 2005, demographers predict, one in three Americans will be African-, Hispanic-, or Asian-Pacific-American and, by 2050, the three groups will represent 55 percent of the U.S. population. California, especially Southern California, is the first part of the country to approach the level of cultural diversity that will be common nationwide by mid-century.
Many legal immigrants come to the United States for educational opportunities and stay. For example, only 28 percent of Chinese who come to study in the United States return to their home country, Alfriend says. There are 35.3 million Hispanics in the U.S. population, and in much of the country they are the largest minority, Edmiston says. And just who will be a minority? Alfriend points to the U.S.-born Caucasian male.
Once in the United States, people of all cultures want a home of their own. Homeownership rates for non-white groups are significantly below those for whites, but it is not from lack of desire. Second-quarter 2002 Census data reported non-Hispanic white homeownership at 74.3 percent. Forty-eight percent of blacks, 47.6 percent of Hispanics, and 53.7 percent of Asian-Americans own homes.
Not only is the pool of multicultural prospects growing, but so are special lending programs. Heeding its own demographic analysis, Freddie Mac has introduced multicultural single-family lending programs -- Mortgage Solutions for Immigrant Families, Lease Purchase Plus, and Down Payment Grants.
Mortgage Solutions eliminates special lending requirements for permanent and nonpermanent resident aliens (legally residing non-U.S. citizens). Recognizing household realities, income from boarders can now supply up to 30 percent of a qualifying monthly payment. The Lease Purchase program uses a three-year lease period to demonstrate financial responsibility. The eligible family converts from rental to ownership by assuming a mortgage from a nonprofit entity. The Building Down Payment program allows home builders to contribute up to 3 percent of the home purchase price to the down payment on behalf of the buyer. Wells Fargo Home Mortgage is one of the select lenders participating in these programs.
Cisneros recommends that home builders and others set up and participate in housing fairs directed at multicultural buyers. Or team up with nonprofit neighborhood organizations, set up training programs, work with employee assistance programs, and look to get lenders involved.
Going to school
And learn more. Richey, Edmiston, and Alfriend all teach multicultural sales technique classes. Edmiston and Alfriend have developed a multicultural sales protocol course for the Institute of Residential Marketing.
The National Association of Realtors also offers multicultural training through its Certified International Property Specialist (CIPS) designation. CIPS study "the ownership and transaction principles of international real estate, including the specifics of real estate markets in Europe, the Americas, and Asia/Pacific." Available classes cover cultural diversity, international market data, investment trends, marketing strategies, currency issues, and financing.
For those who want to increase their understanding of global marketing, Richard R. Gesteland recently released the third edition of his best-selling Cross Cultural Business Behavior, considered an "indispensable practical guide for international business people who sell, manage, and negotiate across cultures." Gesteland, founder of Global Management, is an international training consultant with 35 years of hands-on experience.
Finally, investing in rapport may pay off with lasting customer loyalty. Many Asians, Alfriend says, shop at the same markets for generations through loyalty to the merchant. And from that comes sales and referrals.
When the Game Begins
Many cultures love to bargain; the United States is not one of them. Consultant and sales trainer Bonnie Alfriend offers the following tips:
Understand that many cultures do not trust a fixed price and bargaining is a way of life.
Learn to enjoy bargaining or you will seem weak.
Never express frustration or anger about a low offer.
Cultures that like bargaining do not begin negotiation until they want to own. So anything originally listed as an incentive has no value -- save concessions until bargaining is well under way.
Understand that the process will take time and patience.
Use added-value techniques and small concessions in terms and conditions rather than reductions in sales price.
Realize that in some cultures the contract is just the symbol that negotiations have begun.
Understand that those from other cultures have no problem with a fair profit; they just want to be sure they are not overcharged.
Source: The State of the Nation?s Housing 2002, Joint Center for Housing Studies of Harvard University: Masnick and Di, Projections of U.S. Households by Race/Hispanic Origin, Age, Family Type and Tenure to 2020, May 2002.
Melting Pot Metros
The Brookings Institution Center on Urban and Metropolitan Policy identifies the following metro areas with over 500,000 population as multicultural melting pots. We smell builder opportunity in multicultural housing.
El Paso, Texas
Fort Lauderdale, Fla.
Fort Worth-Arlington, Texas
Jersey City, N.J.
Los Angeles-Long Beach
Orange County, Calif.
Riverside-San Bernadino, Calif.
San Jose, Calif.