Published by the CIPS Network of the National Association of REALTORS®
Third Quarter 2004
Talk Among Yourselves!
By Maire Rosol, CIPS, CRS, e-PRO, GRI
The real estate consumer is changing. For years, most U.S. residential agents sold houses primarily to white, two-parent families, of Anglo Saxon roots, with 2.5 children. Times changed and real estate agents changed too-becoming adept at serving the needs of varied households, including the single buyer, childless couples, single-parent families, adults caring for aging parents, etc. Yet many agents have still not focused on the changing ethnicity of homebuyers.
Although U.S. REALTORS® have been told for the past decade that changing demographics would impact the homebuying market, many have failed to take steps to educate themselves to better serve these homebuyers. When asked about the need for diversity or ethnicity training, a common response is that "it doesn't impact my market" or "only areas such as Florida, California, or New York City need to think about this." Even CIPS designees in the U.S. may not fully understand the nationwide impact. Let me share a few statistics from the 2000 U.S. Census. During the 1990s, 44% of Florida's statewide growth was attributed to an increase in minority populations. If 44% sounds like a lot, then consider that 37 states' minority growth percentage for this same period equaled or surpassed Florida's growth. For example, 54% of Alabama's growth in the 1990s was due to minority populations, Connecticut: 167%, Illinois: 83%, Kansas: 61%, Minnesota: 50%, New Jersey: 104%, Pennsylvania: 109%, West Virginia: 145%. And the state with the largest population growth attributed to minorities-North Dakota, topping the list at 422%! No state minority increase per-centage was below 21% during the 1990s, so no matter where you do business in the U.S., you are dealing with a significant-ly changing homebuying population.
True real estate professionals need to learn about the demo-graphics in their local markets and then ask themselves if they are prepared to attract and serve these markets. Though many from minority populations may have been born in the United States, they are often first-generation Americans who have grown up in a household dominated by the cultural influences of their parent's native country. These influences extend far beyond the obvious, such as language or religion. They include subtle perceptions (and sometimes misperceptions) of financial transactions, agency relationships, the opportunities and obligations of owning a home, and more. Real estate professionals who fail to understand these subtleties risk failing to attract clients, or worse-losing clients to an agent who does under-stand how best to serve these minority/ethnic populations.
There are many opportunities in the U.S. for diversity training, including NAR's "At Home with Diversity" program. If you haven't participated in diversity training in the past 10 years, I encourage you to seek out a pro-gram. First, however, learn what you can about the ethnic makeup of your local market and look for a program that addresses that segment of the market. If you've already taken one of the regional CIPS courses, consider taking it again as a refresher. If you're auditing, many sponsors are willing to offer you a seat at a discounted rate. Register for the new Middle East and Africa course, which deals extensively with ethnic influences on buyers and sellers. Many of these programs qualify for continuing education credit. Certainly, there are many organizations within your own community, such as World Trade Centers, or groups representing a specific culture, that could enhance your knowledge and expand your business. Other organizations, such as the Urban Land Institute or FIABCI, deal with broader issues that might apply to your marketplace.
Thus far, my comments have been directed to U.S. practitioners, but there's an important link here for our non-U.S. Network members. You can be sure the huge growth of minority populations in the U.S. is not due solely to birthrate, but rather to the large number of individuals migrating to the United States. Chances are very good that these populations are coming from one of the 52 countries with which NAR has a bilateral agree- ment. This provides an excellent business opportunity for real estate agents in both the U.S. and in the country of origin.
When I travel outside the U.S., I am always struck by the number of real estate brokers who are surprised that I'm prepared to pay them a percentage of my commission for a successful referral. This is so commonplace in the U.S. and Canada that those of us who work in these markets forget it is not a standard business practice elsewhere. Through the efforts of ICREA, more brokers worldwide are being exposed to and educated about this practice, but it will take time before it is widely accepted globally. If you understand and participate in cross-border referrals, you can help. Talk about referral business with your global counterparts so they can benefit financially from the immigrant population growth we're experiencing in the U.S. In doing so, you stand to increase your income and that of your colleagues. At the same time, you're better serving your clients and customers who may need an additional level of under- standing and professional advice in buying property.
As you talk about global markets and international business with your domestic counterparts, remember that they may fail to realize that for most CIPS designees, business is done in the local market with local residents buying residential and small business properties. By understanding the increasingly global nature of this local business, however, you have a distinct advantage preparing yourself to best serve the increasingly diverse buyer. You have access to valuable training and education to help you understand the buyers of 2004 and beyond. You have at your fingertips a network of professionals in more than 50 countries with whom you can develop international referral business opportunities.
You have all the tools-use them!
The Missouri Association of REALTORS® and its Executive Vice President Dennis McDermott, CIPS, provided the 2000 U.S. Census data referenced in this column.
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