Deciphering Culture Codes By knowing some of the motivations of international buyers, you can build a better, more inclusive marketing plan. Here’s how.
Maureen Horn knows it won’t be easy. Courting the international market never is.
Buyers from other countries don’t always understand how to buy and sell residential real estate in the United States, meaning that the sales associates working with them have to spend extra time explaining the process.
And, depending on where international buyers hail from, they may have different triggers that help them decide just what they want in a home in the United States.
Then there is the competition. International buyers can buy in so many different areas, in the United States and across the world, that it can prove challenging for sales associates to persuade them that Florida is the right place for their dollars.
Horn, a sales associate with Prudential Palms Realty in Sarasota who’s trying to break into the international market, also knows that international buyers are accounting for an ever-growing percentage of real estate sales in Florida. Ignoring these buyers would be akin to ignoring a huge source of potential profits.
“This is definitely not the easiest market,” Horn says. “There’s too much competition in the world. [Buyers] are bombarded with television commercials advertising real estate all over the world. A lot of [international buyers] can buy anywhere. Florida isn’t necessarily on the top of their minds. You have to convince them that Florida is a good place to invest.” A Growing Market
It’s a fact—overseas buyers are making a huge impact on sales.
“Every [sales associate] in this state does international business by default,” says Kimberly Kirschner, chief executive officer of Kirschner Realty International in Hollywood.
The statistics bear this out. The National Association of Realtors®, in its Profile of International Home Buyers in Florida, estimated that about 15 percent of all homes sold in the state from May 2004 to May 2005 were purchased by international buyers.
According to the report, the median sales price of these homes came in at $299,000, which is 52.4 percent higher than Florida’s overall single-family median sales price. The report also stated that about 22 percent of international buyers bought homes priced at more than $500,000. Logic, Reason and Emotions
Tapping into this ever-growing market means knowing the key culture codes and motivators of buyers. After all, U.S. buyers from the South might not be interested in the same things as buyers from the Northeast.
Jurgin Klaric, owner of Mindcode International, a consumer-behavior research firm with an office in Miami, says that real estate sales associates will never thrive in the international market until they truly understand the psyche of their overseas clients. He says you have to understand the “reptilian” part of the brain, which lies beyond logic and controls what customers emotionally want from their homes. For some buyers, it may be a breathtaking location and a good investment. For others, it may be security, expressed in a modest home that will appreciate and show others that the buyer is a savvy investor.
“When people explain [to me] why they bought a certain house, they always go with the logical reasons,” says Klaric. “They focus on price and location, all the numeric information. The truth, though, is that the reptilian part of the brain, the part of the brain that holds what people truly mean instead of what they say, is what really motivates them. For some people, the reptilian part of their brain says that they want a house that is [comfortable and cozy] over just about anything else.”
Sales associates working in the international market shared with us what they’ve noticed are the general desires and motivators of buyers from Britain, Germany and the Latin American countries. (These countries are where many international buyers hail from; see graph on the opposite page.)
Of course, all buyers aren’t alike and all buyers aren’t motivated by the same things, but these are general trends that experienced sales associates have noted among international buyers with whom they’ve worked. Britain
Buyers from Britain many times are looking for a good investment, says Ellen Bitton, chief executive officer of Park Avenue Mortgage Group, a mortgage lending company that has an office in Palm Beach.
“They hear about destination spots like Hawaii and Florida, and they know that these places are good investment opportunities with quality buildings and luxurious amenities,” says Bitton. “The buyers from Britain are [generally] looking for a good place to diversify their holdings so that they’re not totally invested in one country.”
And, like many other buyers, they’re looking for a good value. And that’s easier to find than ever, says Eddie Shapiro, chief executive officer of Nest Seekers International, a real estate firm with an office in Miami. The U.S. dollar is currently weak, meaning that British buyers, with their stronger pound, can purchase more home in the United States than they could at home.
That’s why it’s important to have, as part of your marketing package, facts and figures about investing in real estate, your area’s growth, statistics and more.
“People are coming to the United States not necessarily because the real estate here is so wonderful, but because the dollar is losing its value every day,” Shapiro says. “As the dollar loses its value, the pound gains. The pound goes a long way here. It’s almost like the buyers from Britain and Europe are getting a property on a discount.” Latin America
Buyers from Latin America have long boosted the residential markets in Florida, especially in international cities like Miami.
But how can you most effectively reach this market? Klaric emphasizes that not all Latin American buyers are alike. Some want stability, some want a solid social network and some want a feeling of family and home.
“They feel at home [in many areas of the United States], and that’s very important to buyers from Latin America,” says Kirschner.
Latin American buyers also appreciate the quality health care available in the United States, so they may buy close to established hospitals and medical centers. Health care is one of the biggest [factors in a purchase], Kirschner says. She also says that Latin American buyers like the colleges and universities located near Florida’s major cities. “They will buy real estate here to provide a place for their children to live while attending college. They can then hold onto the property while it appreciates, perhaps renting it out before selling,” she says.
Sales associates can promote a number of different factors to their buyers from Latin American countries: the vibrant Latin community in Florida, the amazing health and educational resources, and the luxurious homes that are common in many of the area’s busiest international cities. Germany
Sales associates would be wise to stress to German buyers just how affordable properties in the United States are now that the dollar has lost value, according to Shapiro.
“They can buy homes here a lot cheaper than they can overseas,” Shapiro says. “It only makes sense for them to buy real estate here in the United States.”
While some buyers are interested in the magnificent ocean views, the busy amusement parks and the luxurious amenities that buyers can find in Florida real estate, some German buyers aren’t impressed with all of that, says Shapiro. Instead, he says, sales associates should emphasize to them that they can get a good, solid investment for less money than they could in their country.
As part of your marketing plan, you may have charts showing price appreciation, the strength of the housing market and neighborhood information in addition to information about the area’s attractions. Communication Is Vital
There is one key, though, that real estate professionals should consider no matter whether they’re working with buyers from Germany or those from Colombia, Communication, always important with any buyer, becomes especially critical when you’re dealing with international customers.
“You have to communicate a lot more clearly all the information as to how we operate here when it comes to the real estate transaction,” says Jacqueline Grellinger, an international specialist with Coldwell Banker Redential Brokerage’s Boca Raton office. “[Many] of the people from foreign countries have no concept of the Multiple Listing Service (MLS). It doesn’t exist in their countries. The contract procedures are different, too. You have to explain all of this to them, so they understand everything.”
It’s also important to remember that each buyer is unique and that it’s only through communication that you can find out what motivates a specific buyer. So, ask lots of questions, pump up your marketing to reach a multitude of personalities and be prepared to tweak each buyer or seller presentation.
Do that, Grellinger says, and you can work with buyers from anywhere. Dan Rafter is an Illinois-based freelance writer. For tips on how to network with international real estate sales associates and to understand business etiquette in other countries, look for our two-part international series in the May and June issues of Florida Realtor magazine.