What’s trending in the luxury international market? FIABCI, the International Real Estate Federation, is an excellent resource whether you serve international clients who purchase in your local market or you play in the bigger international arena.
I recently had a chance to chat with Bill Endsley, the secretary general of FIABCI-U.S.A. With members in more than 50 countries, “FIABCI provides information, connections and concierge services to help you expand your global network” and “to meet like-minded professionals of the highest caliber anywhere in the world.”
One of FIABCI’s most valuable services is helping their members stay abreast of the latest trends.
According to Endsley: “FIABCI helps our members to read the tea leaves. For example, FIABCI tracks how many people are relocating to or investing in the U.S. A key indicator we watch is where major international companies make clusters of residential and/or apartment purchases. These purchases often occur prior to the time the country makes a major announcement about opening a plant or facility in that area.”
What’s trending now
According to FIABCI’s latest research, here are nine current trends:
1. Until recently, international clients wanted “exurban” properties. Today they want urban properties where they can live and work in the same place. Energy-efficient “green” properties are highly desirable.
2. Five years ago, Asians were parking their money in Asia. Today, they have shifted to moving their investment dollars to the U.S.
3. Canada is still the No. 1 source of international U.S. investment.
4. The Canadian government recently closed down its equivalent of the U.S. EB-5 visa program. (The U.S. EB-5 visa program allows visas to be issued to those who invest at least $500,000 in the U.S. and use that money to create or preserve at least 10 American jobs.) Canada’s decision drastically reduced Chinese investment in Canada and has driven more U.S. investment by the Chinese.
5. High tax rates in France and the relative weakness of the euro are driving European investment outside of Europe.
6. Instability in other nations is also driving U.S. investment. Ukrainians are purchasing in Florida, Atlanta, Houston and Jacksonville. Brazilians and Venezuelans are driving the Miami economic recovery as Venezuela undergoes a systematic collapse. Puerto Ricans are exiting Puerto Rico and virtually no one is returning.
7. The current Arab influx in the investment market is huge. People from the United Arab Emirates, Egypt, Jordan and Lebanon tend to purchase multi-unit buildings of between six and 12 units. They normally don’t purchase hotels and restaurants because of Sharia law prohibiting alcohol sales.
8. Getting money legally into the U.S. continues to be a major issue.
9. Middle Eastern clients tend to prefer more ostentatious properties, while Asians normally prefer new, with top-of-the-line quality.
According to Endsley, negotiation strategies vary dramatically. People from the Middle East negotiate more aggressively than many other cultures. In Asia, it’s more of a fun cat-and-mouse game that can go on endlessly.
When your clients are from a culture where kickbacks are expected, kickbacks can be a particularly difficult negotiation issue. You absolutely must stand your ground about what is legal and illegal here.
Endsley warns: “Don’t be tempted to give in even once. It’s a slippery slope. Once you give in once, it will be expected on every transaction.”
Age and sex — two key cultural dimensions that vary widely
While the U.S. worships youth, most Asian societies hold older people in high esteem. Their rank also matters, especially in Asia.
As Endsley explains: “Who introduces you is very important. There are layers of decision-makers. If you are introduced by someone of status, that gives you status. You can’t break in by yourself. Often the oldest person has the greatest status independent of being male or female.”
The two countries where you are most likely to see more women in the room than men are Turkey and China. You rarely will see women in the room in Japan and Korea. In the U.S, the number is about equal.
1. A widely held misconception is that international clients prefer to work with someone who speaks their language or shares their heritage. While this is sometimes the case, many international clients are extremely private. If you don’t speak their language, you can’t gossip about them in their community.
2. International clients “come armed with information.” They will expect you to be an expert on the market conditions, current rates of return for various types of investments, as well as how values are trending in the market you represent.
3. Endsley also advises to be wary of “the culture of celebration.” You may have to spend a considerable amount of time at social events before they will do business with you. At these events, they will invite you to drink and gorge with them. Always remember, you are being watched. People from many cultures believe your true character comes out when you’re intoxicated.”
4. If you want more international clients, consider joining groups such as the Hispanic or Korean Chamber of Commerce if there is a chapter in your area. You don’t have to be from the countries they represent to join. The secret is to regularly attend meetings, be a sponsor for events, and be of service.
To sum up Endsley’s advice, doing international business is always about relationships. Pay special attention to the various cultural and stylistic differences, be respectful of them, and do your best to help your international clients navigate through what is required in the U.S.
Editor’s note: This column has been updated to correct that Bill Endsley is the secretary general of FIABCI-U.S.A.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Discover why leading Realtor associations and companies have chosen Bernice’s new and experienced real estate sales training for their agents at www.RealEstateCoach.com/AgentTraining and www.RealEstateCoach.com/newagent.