A new wave of homebuyers Chicago

PHIL VELASQUEZ,

 

Mei Xinyi stands on the balcony of his condominium in the South Loop. Xinyi says the homebuying process is much different in the United States than it is in China.

By John Handley, Special to the Tribune

August 17, 2013

Real estate professionals aren't sitting around waiting for immigration reform. They already are catering to the needs of potential homebuyers from abroad.

 

"All immigrants have beliefs that may directly impact their real estate decisions," said Michael Soon Lee, a California real estate broker and expert on multicultural homebuyers.

 

"Immigrants have cultural tendencies. Home sellers need to be sensitive to those cultural requirements. I'm a fifth-generation Chinese-American, and I still have some of the beliefs of my ancestors," Lee said.

 

He stressed the importance of discovering what immigrants want because of their major economic effect on housing now and in the future. Data from the Census Bureau show that immigration is the main driving force behind U.S. population growth.

 

"Housing purchases by immigrants are expected to increase significantly in some markets, including Miami, San Francisco and Chicago, which is a major point-of-entry city," said Jed Smith, managing director of quantitative research at the National Association of Realtors.

 

"International buyers account for 3 percent of all home sales, and half of them are recent immigrants," said Smith, adding that immigrants prefer to use real estate agents who speak their native tongue.

 

Chicago is one of the hot spots for Asian buyers, including Mei Xinyi, a Chinese graduate student at the Illinois Institute of Technology who bought a one-bedroom condominium unit near the campus.

 

Xinyi noted that the homebuying process is much different here than in China, and he added that he bought a "good house at a good price at the right time."

 

His 12th-floor condo offers sweeping views of downtown.

 

Paul Knott, broker associate with Re/Max Horizon in Elgin, worked with Xinyi on the deal. About 40 percent of his clients are from China.

 

"Many Chinese buyers are surprised at our annual property taxes. In China, a house is purchased for 70 years and the taxes are paid upfront," Knott said.

 

What do immigrants want in housing?

 

"The vast majority rent at first. Then every year their desire to buy increases," said Natalia Siniavskaia, housing policy economist at the National Association of Home Builders.

 

In her "Immigration and Housing Demand" study, she forecasts that new immigrants will occupy more than 2 million multifamily units and more than 1.2 million single-family homes by 2020. Her estimates are based on the arrival of 1.2 million immigrants a year, the low-end projection by the Census Bureau.

 

Siniavskaia noted that of recent immigrants, 42 percent were from Asia and 40 percent were from Mexico and the Americas.

 

"When immigrants buy a home, they feel they've made it in America," Lee said.

 

But to make a deal with recent immigrants, Lee emphasizes the need to understand cultural differences.

 

"When those from abroad go house hunting, they can be unintentionally insulted several times during the first 30 seconds in a sales office," said Lee, author of "Opening Doors: Selling to Multicultural Real Estate Clients."

 

"For example, shaking hands with Asian or Middle Eastern women violates their culture. Personal space is different around the world. Americans stand about 21/2 feet apart when talking. Japanese may shake hands but then bow and step back. Middle Easterners often step close to your face. Eye contact shows honesty, but some Asians may look down to show respect," Lee said.

 

He added that multicultural customers don't just look at houses. They are good savers, he said, and are interested in buying.

 

"Asians are from many different cultures and are proud of their heritage. They don't want to be called Asians, but more specifically Chinese, Japanese, Koreans, etc. Asians tend not to be emotional about home purchases. They don't fall in love with a house. Rather, they view it primarily as an investment," Lee said.

 

"First-generation immigrants speak little English. By the second generation, they are bilingual, and the third generation is nearly fully assimilated," he said.

 

When immigrants first arrive in the U.S., they tend to live in areas with others from their country.

 

"But many disperse after the second or third generation. Some younger immigrants want something that's totally American," said John McIlwain, senior resident fellow for housing at the Urban Land Institute in Washington.

 

"Not all Asians believe in feng shui, but many do. For instance, the number 8 in a street address is lucky, but 4 is not. A house facing north is bad luck because that is where the devil lives," Lee said.

 

According to feng shui, the ancient Chinese system used to orient buildings for positive energy, it is bad luck for a sidewalk to lead straight into a house; Asians prefer curved walkways, Lee said.

 

Also, some like to sprinkle rice around the foundation of the house to bring good luck inside.

 

"The No. 1 amenity that many Asians and Indians want is a kitchen vented directly to the outside because of smells from cooking that could affect resale value," he said.

 

Real estate agent Deepika Syal, of Re/Max United in Wheeling, said the majority of her clients are from India. "They like houses that face east and the rising sun. Like in their former home in India, they want a lot of light and windows."

 

Syal added that Indians tend to make large down payments and pay off mortgages in seven to 10 years.

 

Lee noted that immigrants often have little homebuying experience.

 

"Lawsuits have been filed by buyers who think the furnishings in model homes are included in the price. In China, only 5 percent own their own homes. Contracts are not the same in all countries. Some immigrants think they can renegotiate a contract all the way to closing," he said.

 

"It may be difficult to get financial information. Some Hispanics and Asians are wary of banks and may keep money for down payments in their home," Lee said.

 

Hispanics with extended families often want more bedrooms and baths. They may decide to convert a space designed for an office into another bedroom, according to Lee.

 

"International buyers from warmer climates often prefer tile or wood flooring because they know humidity can adversely affect carpeting. Some buyers from India want the front door to be the largest in the house as a way to maximize the inflow of money. Because of that, large sliding glass doors are called sliding glass windows," Lee said.

 

Basel Tarabein, owner of Re/Max at Home in Rolling Meadows, said he sells to a number of Middle Eastern homebuyers, including those of Syrian, Lebanese, Jordanian and Egyptian descent.

 

"To some of them, the old culture creates important priorities. They may want houses with large square footage because of visits from their family from overseas who may stay three to five weeks a year," he said.

 

"They like traditional architecture with stone and Greek columns," said Tarabein, adding that some buyers want a separate room with ventilation for smoking water pipes.

 

Lee recommends treating "every real estate customer as an individual, and it's OK