The following information is provided by the Center for REALTOR® Development (CRD).
Recap of CRD Podcast Episode 12
As the global economy expands, international real estate transactions are becoming more commonplace. Your global business starts in your local marketplace. As times move forward, it’s going to be hard to avoid global business. It’s important to start proactively incorporating it into your own business and action plan now.
Here in the States, we often make reference to the American Dream, but we sometimes forget that around the world, everybody wants to have a safe place for their family. Homeownership is a dream for people everywhere. Mark Makoto Kitabayashi—who lives in Washington state and teaches classroom courses for NAR’s Certified International Property Specialist (CIPS) designation—joins Monica Neubauer for episode 12 of the Center for REALTOR® Development podcast to talk about global real estate transactions.
Kitabayashi has been a REALTOR® in Washington state since 2000. He is part of the management team at Windermere Real Estate Puyallup, has been a top producer for the last 10 years, and is actively involved with REALTOR® Associations at all levels. His extensive international marketing, R&D, and sales experience of over 25 years add extra dimension to his expertise. Kitabayashi is a first-generation immigrant; his parents came here from Japan when he was 12 years old. He’s been doing real estate for about 17 years, and actually got into international real estate via his first real estate client, who was Vietnamese.
NAR’s Certified International Property Specialist (CIPS) designation is dedicated to teaching about foreign buyers or local buyers who are foreign-born. There are two types of international clients: The first is people local to your market who are foreign-born and probably speak English as a second language, looking for real estate locally; you could also have clients abroad that are looking for property in your area. In this episode, Kitabayashi shares nuggets of wisdom from his classroom discussions about international transactions. Below are some of these nuggets.
Understand that building trust is key. When working with foreign clients, the biggest thing you need to know is that they want to work with someone they can trust. Knowing their first language would be helpful but is not required. “Making an effort to understand other cultures is the biggest part of this global economy,” explains Kitabayashi.
Start small to cultivate local international relationships. For people who want to start serving an international market, begin by incorporating modest international business-building activities into your business and action plan. This could be as simple as attending a local cultural event—it doesn’t necessarily mean you jump right into a foreign transaction. Down the road, once you have a good business model that serves foreigners, you can successfully help more of those same types of clients find a home and also grow your own business at the same time.
Establish common ground. Kitabayashi shares some ideas of topics you can discuss with your clients to start the conversation. Food is usually a good icebreaker for any culture. You can ask for restaurant recommendations in your area. As an American REALTOR®, you can do some preemptive research about the culture where your client comes from to better understand what processes they’re used to. In addition, there is nothing wrong with asking questions or sharing what you understand to make sure that’s how they understand, as well. It is better to ask than to assume. If you have friends from other cultures, you can also have an open conversation with them to learn more.
Develop an appreciation for different cultural “styles.” There are two categories of cultural styles: high context and low context. In high-context cultures, the relationship is more important and personal space is wide (less physical contact). Low-context cultures are agreement-driven and personal space is limited. In high-context cultures, the relationship usually comes first before negotiations start—unlike low-context, where the start of a negotiation is usually the start of the relationship.
Understand that real estate practices can be different across the globe. In some cultures where back-and-forth negotiation is more common, as a representative of a domestic foreigner, you may find yourself in a situation where you are the go-between and can offer small concessions that function as a symbolic “win” for the negotiation script. As a representative of the seller, understanding our own client, as well as the opposite side, makes a whole lot of difference. (Kitabayashi goes into some great examples in the recorded episode.)
Keep Fair Housing compliance in mind. When working within the context of global business, you have to remain Fair Housing-compliant. There is a fine line between discrimination and preferences. As a REALTOR®, you have to be neutral and treat everybody equally. You also have to educate your clients about the Fair Housing laws in the U.S., so they don’t make an unethical and/or unlawful request of you.
Be proficient in the technical aspects of global real estate. There are some technical aspects of foreign real estate to consider as well, such as currency conversion. Arrangements for closing dates, etc., may have to be made to accommodate the time it takes to convert the currency and get it sent to the correct channels. One thing Kitabayashi recommends is having your currency converted and sitting in a U.S. bank before you even begin any transactions. This will allow you to complete the transaction more quickly and can eliminate the exchange rate frustration, as well.
Our monthly podcast focuses on education in the real estate industry. It addresses formal education programs (such as those from NAR) and informal sources of industry knowledge (such as peers and mentors). Its intended audiences include REALTORS®, real estate professionals, allied professions (such as appraisers and lenders), educators, education providers, and consumers. To listen or subscribe, visit www.crdpodcast.com.
To learn much more about expanding your business internationally, consider taking one of the six individual international online courses developed by the Global Business and Alliances division of NAR. All of these online products can be used towards earning NAR’s Certified International Property Specialist (CIPS) designation.
For more information, please visit RISMedia’s online learning portal from NAR’s Center for REALTOR® Development (CRD) and the Learning Library. Here, real estate professionals can sign up for online professional development courses, industry designations, certifications, CE credits, Code of Ethics programs and more. NAR’s CRD also offers monthly specials and important education updates. New users will need to register for an account.
For the latest real estate news and trends, bookmark RISMedia.com.
7 Tips for Building Trust With Foreign Clients