How to Reach the Immigrant Home Buyer

Learn how you can help the growing U.S. pool of foreign-born residents overcome common obstacles to become home owners.

April 1, 2005

If you haven’t worked with an immigrant client by now, chances are high that you will at some point in your real estate career — especially if you do business in a major city. The foreign-born population already is fueling today’s hot real estate market and will make up an increasing share of home buyers in years to come.

Immigrants have accounted for more than a third of household growth in the United States since the 1990s, with more than one in 10 households now headed by a person born outside of this country, according to the Joint Center for Housing Studies at Harvard University.

By tapping into this growing niche, you can expand your business while also helping foreign-born residents achieve home ownership.

'A Major Source of Housing Demand'

According to the most current data from the U.S. Census Bureau, some 33.5 million foreign-born residents live in the United States, making up 12 percent of the country’s total population. A majority of immigrants, or 53 percent, is from Latin America, 25 percent is from Asia, and 14 percent is from Europe, with the remaining 8 percent born in other regions of the world.

Fannie Mae, the biggest U.S. buyer of mortgages, has called immigrants “a major source of new housing demand in the years and decades to come,” citing statistics that show minorities—many of whom are immigrants — will account for nearly two-thirds of household growth from 2000 to 2010.

However, the homeownership rate of immigrants continues to lag that of native-born residents by as much as 30 percent. Stronger outreach to new immigrants from members of the real estate industry and better education about home financing can narrow that gap, JCHS acknowledges in a recent report.

If you live in a major metropolitan area, you have greater opportunity to reach out to immigrant home buyers and sellers. That’s because more than half of all the country’s foreign-born households live in one of 10 metropolitan areas: Miami; Los Angeles; New York; San Francisco; Houston; Chicago; Washington, D.C.; Boston; Dallas; and Atlanta, according to JCHS.

But if you work in a smaller market, don’t count yourself out. Immigrants are finding their way to smaller cities and towns—and even rural communities. And those who move to cities other than the top 10 locales are more than twice as likely to become home owners, mainly due to less expensive housing, Fannie Mae studies show.

Because each city has a unique foreign-born population, and because each immigrant group has its own distinct culture, it’s important to research your area and learn the characteristics of the immigrant populations that live near you.

Breaking the Credit Barrier

Broker-owner Ana Tristan, GRI, of Prima Realty Inc. in Chicago Heights, Ill., focuses on the Hispanic suburban market and regularly works with immigrants. It helps that she and her staff are bilingual and are willing to spend extra time to walk their clients through the complexities of the homebuying process.

But Tristan says the most important factor in serving immigrants is being able to connect clients with mortgage brokers who have experience finding home loans for people without an established credit history.

“Many immigrants don’t have traditional forms of credit,” Tristan says. “It takes some extra work to get all the paperwork together. You need to have a relationship with good mortgage brokers.”

The ideal mortgage broker will know about homeownership incentives and innovative financing programs for immigrants and will be willing to collect utility bills or other records that show the buyer has a history of paying what’s owed, Tristan says.

Indeed, the lack of formal relationships with U.S. financial institutions is one of the most significant barriers to Latino homeownership, along with a lack of information about the homebuying process in general, according to the Tomás Rivera Policy Institute in Los Angeles.

However, this barrier is not unique to Hispanics; it’s among the top obstacles facing other immigrant groups as well. To help foreign-born clients overcome this problem, you should discuss the importance of a credit history early on in your relationship with an immigrant client, provide plentiful information on the homebuying process, and be prepared to recommend mortgage brokers who are familiar with their situation, Tristan says.

How Language Proficiency Can Help

Real estate practitioners throughout the country say learning a new language, or even just a few words of a language, can open the doors to an immigrant niche. Kathrin Stucki, a salesperson at RE/MAX Advantage in Raymond, N.H., has taken that strategy to the extreme.

Stucki is now conversational in eight languages — including Turkish, Portuguese, German, and Italian — which has helped her win a solid base of foreign-born clients despite the fact that her market area is far from a hotbed for immigrants.

Stucki’s language skills pay off in the form of referrals from past immigrant clients and fellow practitioners. When networking with other real estate professionals, she never passes up a chance to mention her special skills. “I tell them, ‘Instead of losing customers because you can’t speak their language, refer them to me,’” she says.

An immigrant from Switzerland and an avid traveler, Stucki also has used her language skills to meet immigrant prospects while visiting other countries and even at a belly-dancing class. She says her clients are put at ease because she is able to speak their native language — even if they also know how to speak English.

In Las Vegas, Carlos H. Silva Sr., a salesperson with Century 21 Aadvantage Gold, says his predominantly Hispanic client base appreciates receiving Spanish literature that explains the different types of loans, the escrow process, inspections, and appraisals. “They’re grateful we take the time to explain things to them,” in their native language, he says.

Silva also makes sure that home inspectors, appraisers, and other professionals he recommends to clients can speak Spanish. Like Stucki, Silva says the payoff usually comes in the form of referrals from past clients who felt comfortable working with him and trust that he’ll do a good job helping their family or friends.

Cultural Differences Matter, Too

Understanding the culture of your clients is just as important as knowing their language, says Kenneth Li, CRS®, CCIM, broker-owner of Century 21 Southwest in Houston.

Different immigrant groups have their own ways of negotiating, decision-making, and discussing financial matters, he says. When you’re not aware of culture nuances, miscommunication can result and deals can be thrown off track. It can be especially harmful if you make assumptions based on stereotypes.

“I feel language is important, but that’s not the only thing,” Li says. “When you know their culture, you can build trust, and trust is a universal language.”

Li, who is originally from Taiwan, works closely with the Asian population in the Houston area but also serves the Hispanic market and other immigrant groups. To learn about different cultures, he recommends that practitioners earn the Certified International Property Specialist (CIPS) designation and get involved in the immigrant community by joining organizations and attending cultural events.

“Let people know that you care about the community,” Li says. “When you go to events, tell everyone that they can call you if they have questions about real estate.”

Once you know the culture, you’ll also be able to better target your marketing messages and think of new ways to reach prospects, such as placing ads in a local foreign-language newspaper or at an ethnic grocery store.

Going Above and Beyond

While working with immigrants can be very rewarding, practitioners say it also requires a little extra patience and a willingness to spend extra time helping clients learn what to expect as a homeowner in this country.

For example, Li has helped immigrant clients get their utilities connected after they’ve moved in to their new home, while Tristan’s staff walks clients through making their first mortgage payment after the closing.

When working with immigrant sellers, Stucki offers staging suggestions, such as removing prominent ethnic or religious decorations that can distract potential buyers.

“It can be hard to explain that people in this country aren’t used to the way things are in their country,” Stucki says. “I have a smooth way of telling them that maybe they should take a few things down. I let them know we have the same goal—to sell the house.”

Learn More

Certified International Property Specialist Network
The CIPS Network comprises 1,500 real estate professionals who deal in international real estate, which covers traveling abroad to put deals together, assisting foreign investors, helping local buyers invest abroad, or serving an immigrant niche in local markets.

At Home With Diversity
The NATIONAL ASSOCIATION OF REALTORS®’ At Home With Diversity section on REALTOR.org provides information about fair housing, diversity certification programs, and other resources.

Field Guide to Marketing to the Hispanic Community
This field guide at REALTOR.org provides marketing tips, materials in Spanish, and statistical data to help you succeed in working with this important segment of the real estate market.

Handouts for Consumers — En Español
At REALTOR® Magazine Online, you can get free, ready-to-use, information-packed handouts to provide accurate, comprehensive information on the real estate process to your prospects, clients, and customers. All handouts are available in Spanish.

Fair Housing Quiz
Think you're pretty well versed in federal fair housing law? Take our quiz to see whether you're ready to tout your fair housing know-how to your clients and customers.

National Association of Hispanic Real Estate Professionals
This non-profit organization aims to increase the Hispanic homeownership rate by empowering real estate professionals who serve Hispanic consumers.

Asian Real Estate Association of America
The goal of this national trade group is to enhance business opportunities and success of real estate professionals who serve the Asian American community.

Kelly Quigley

Kelly Quigley is the former managing editor of REALTOR® Magazine.

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