Culture is an important pillar in all human and business relations. It can create a bridge or a gap between sellers and buyers. In the real estate world such gaps exist between American realtors and their potential Chinese buyers. This can be seen in a wake of serious Chinese appetite for American real estate investments in prime properties. The cultural gap goes beyond just food, language barriers and differences. The question we are faced with is to how American realtors can close the gap and make a deal with their Chinese buyers.
A guard of honor
There are a lot of cultural orientations that an average American realtor needs to undergo in order to create a seamless and harmonious flow of seller-buyer relations with the Chinese in real estate investments. This has to start from the initiation of the business relationships, the first personal contact. The average American is brought up with a primary focus on power and fame, with a passionate desire to “influence”. On the other hand, an average Chinese is brought up with a primary emphasis on Honor.
This difference in upbringing has serious consequences because first impressions last. One of my personal mentors, the late Dr. Myles Munroe, got the shock of his life in Japan, which shares a similar culture with the Chinese. On one of his visits, he was surprised why his audience was not responding to his lectures the “American style” because they all seemed “unmoved” by his presentations. After the forum he asked them whether there was anything wrong with his presentations. To his amazement, they told him that the things he was presenting were so important and honorable that they could not afford to lose attention by engaging jumping and yelling. When he questioned them further, they told him, “You guys from the West value power, for us here we value HONOR. That is why we placed so much Honor on your presentations that we could not afford to shout while you were presenting on stage”!
Every American dealing with Chinese needs to guard Honor, more than charisma if they expect to close a deal in real estate investments. An average Chinese CEO in charge of a multi-billion dollar corporation does not toss a business card across the table the way Americans are used to. It is considered so rude and crude in their culture. They have to bow a little bit as they place it in the hands of the recipients, using both hands. If you miss it here, you are almost half-way in losing the deal in real estate investments or any other business!
The Chinese have a different way of pursuing their interests abroad. One of the distinguishing factors is their non-interference culture in the domestic affairs of their business partners, whether they are governments or individual corporations. This culture sometimes has led to the exaggerated and mistaken belief that Chinese investors are one-time prey and they cannot be trusted as valuable long-term business partners.
On the contrary, the Chinese are making very serious inroads into the American real estate investments world, especially in the South Florida that was traditionally dominated by Latinos. For instance, the American Da Tang Group has purchased a $74.8 million block in Miami’s Brickell District is just one of the acquisition projects by the Chinese. Such trends can be taken to a higher level if the life-line of mutual trust is maintained between American realty players and their Chinese real estate investments.
However, the American realtors are the ones who have the ball in their court. This is because recently, there have been a few instances of broken trust between American agents and their Chinese potential buyers perusing real estate investments. There is this unfortunate case where a Chinese investor was almost paying up a huge amount of nonrefundable deposit for the acquisition of a commercial parcel intending to develop it. However, all this was going to happen without first having obtaining any relevant reports in regard to zoning, economy or environment. As unfortunate as it may sound, the innocently trusting Chinese investor was being urged on by an irresponsible agent. This and few other incidences are enough wake-up calls for realtors to pull up their socks and repair this crack before it runs out of control.
Exposure in real estate investments
Another key factor in closing the cultural gap is to understand what kind of Chinese you are dealing with. This will put you in a more advantageous position of effectively understanding their needs. Some buyers considering real estate investments could be American-Chinese who are well exposed to the American environment and business dealings. The other group comprises Chinese investors who do not intend to migrate to the US. One of the ways to deal with these different groups is to learn their language or have someone on a realtor’s staff that is familiar with both Chinese language and affairs. Agents dealing with foreigners need to understand and adjust to their culture in order to increase their potential market and grow real estate investments.