China poses a bit of a riddle for real estate pros. It has a massive population and a booming economy, potentially making it fertile ground for Realtors, but the opportunity comes with steep barriers to entry including the language, the time zone, the distance and even the restrictive internet policies.
Long and Foster, however, believes it’s cracking that riddle, and the company’s Chinese partner seems to agree: This month Chinese property website Juwai.com awarded the East Coast brokerage its “Best U.S. Real Estate Company” award. The award is based on votes from Chinese consumers, as well as a panel of judges from other large companies.
And though the award may not land on the radar of most U.S. observers, it does hint at the ever-growing interconnectedness of the U.S. and Chinese real estate markets — and the potential to capitalize on that relationship.
Long and Foster’s partnership with Juwai.com involves the latter company hosting the former’s listings, according to Eric Hung-Ming Chen, director of Long and Foster’s Asia Pacific Initiative. Chen said the partnership is mutually beneficial and gives Long and Foster’s a way to overcome China’s “great firewall” that restricts internet access in the country.
And by using Juwai.com, which focuses on marketing foreign properties, Chinese buyers and view and engage with listings in their own language
“By doing that, Chinese buyers are able to find our listings and understand the context,” he added.
Long and Foster’s new award comes after a series of corporate acquisitions and pushes into China. Last year, for example, listings from Berkshire Hathaway subsidiary HomeServices of America began to show up on Juwai.com. Months later, HomeServices acquired Long and Foster, which describes itself as the country’s largest privately held residential real estate company by sales volume.
Juwai.com has also indicated that it wants to more aggressively court U.S. Realtors, unveiling a Mandarin speaking robot butler earlier this year that it wants to bring to events.
Other companies, such as Sotheby’s, have also been expanding their presence in China.
The investments from these companies are clearly aimed at capitalizing on the flow of money from China into the U.S. real estate market, a flow that data suggests has been steadily accelerating.
Chen said that Chinese buyers are drawn to American real estate due to educational opportunities in the U.S., and because in China property is typically purchased only for a specific time period, not forever.
“Real estate in the United States is very attractive for them because the property stays with their family,” he explained. “It’s a totally different system in China.”
Chinese consumers are frequently interested in buying homes for themselves, Chen also said, though in recent months he has also seen an increased interest in investment properties. He attributed that interest to Chinese monetary policy and a desire among buyers to “diversify their investments.”
Chen’s advice to Realtors hoping to do business in China was to be patient, persistent, and proactive. He said that Chinese buyers won’t come knocking on agents’ doors, but over time it is possible to build contacts. Agents should also be prepared for sales to take time; though many Chinese buyers pay cash, potentially accelerating transactions, they’re also viewing properties remotely and Chen described deals that have taken years to finally close.
“You have to imagine buying a property from 6,000 miles away,” he added.
Still he said that there is significant potential for U.S. real estate professionals in the Chinese market, and expects it to continue to grow in the future. And Chen said he was honored that his company was awarded for working in that market.
“I think this gave us, and me, a confirmation of the service we’re offering,” he said.