Published by the CIPS Network of the National Association of REALTORS®
Third Quarter 2001
Building Relationships
By Paul L. Byron, CIPS
I’ve been doing business internationally for many years but I’m fairly new to international real estate. In my last career, I was head of worldwide planning for a major pharmaceutical company, traveling extensively. Since I took a world of friends and contacts with me into the world of real estate, it was only natural for me to investigate what opportunities existed in the international arena. It was a short path from my first FIABCI World Congress to the CIPS Network and an office in Prague run by a Czech partner. It was a quick step from there to becoming the NAR President’s Liaison to the Czech Republic. A lot of my time is devoted to fostering understanding between the two business cultures I know best. I find it’s the most effective way to do business trans-nationally.
Understand your global markets
There is enormous opportunity in Central and Eastern Europe right now. Through its International Real Property Foundation (formerly the Eastern European Property Foundation) NAR has been working in the region for a decade to help the region move from a centrally planned to a market driven economy. (See “IRPF: Working for You,” Perspectives, Third Quarter 2000.) The first five years of the 21st century will likely be the most important for democracy and capitalism in the region than in any other time in its history. By 2003, it is very likely that Poland, Hungary, the Czech Republic, Slovakia and the Balkan states will join the European Union.
The 1990s were a time of euphoria in these newly independent states after years of domination by the Soviet Union. A velvet revolution. The people, their leaders, and the business community thought capitalism would just happen. Now they know better. In the global real estate industry, when office buildings appraised at, say, $7.5 million dollars turned out to be worth $750,000, a sifting out process began. The older generation, who found change difficult or abhor-rent, is passing out of power. Their children see the world very differently. The outlook for business has ripened. If you know the people, if you understand the culture, you can see it and feel it. Knowing and understanding the people and the culture is really key to doing business abroad.
Know your inbound consumer
For U.S. practitioners, however, doing business abroad is only half the story. New immigrants to the U. S. have become more than just a niche real estate market. During the recent NAR Midyear Legislative Meetings & Trade Expo in Washington, DC, a panel of international experts addressed an audience of REALTORS® eager to win part of the growing global real estate market. Panelist David Cameron Fischer, CIPS, of Cameron Investments in Palm Beach Gardens, Florida, said “In Florida, by next year, half of all property sold will be sold to foreign nationals or new immigrants.” Half. Fifty percent. Think about that.
In the U.S., the ratio of incoming clients to outgoing clients will vary, depending on where you’re based. You can make some assumptions about natural flows. For instance, residential buyers-whether inbound or outbound—will generally seek vacation homes in warmer climates or second homes in business centers. The movement in and out of Mexico is likely to be greater in Southern California, Texas, and South Florida. Commercial buyers might concentrate in northern and industrial regions. Vacant land in Iowa might attract agricultural interests, such as farmer or timber growers. Car manufacturers want locations where it is easier to get to market or where the tax situation is favorable. So the question becomes how do you find and serve these clients?
It’s not just what you know. It’s who.
Ask yourself, when the whole wide world is your farm, how do you find clients and properties? How will an international property buyer or seller find you? There are some obvious ways, such as through family connections or on the Internet. Attending international real estate conferences, meeting and forming connections with other practitioners who may refer clients to you is another. But working locally—through your affiliations with local international organizations-can be the most productive way to establish solid business relationships worldwide.
As an American doing business internationally, one of the first lessons I learned was that international deals spring from established relationships. You deal with people you know and trust. Period. Unless you’re actively out there building relationships, you’re probably in the wrong game. You’ve taken a very valuable first step by joining the CIPS Network. The next step is to get out there and touch your foreign counterparts—at global conferences, on foreign trade missions, in multi-national networking groups, through the international council of your local REALTOR® Association, and through involvement in citizens organizations that promote understanding between nations. Build a network of brokers you can call on in other markets. Join organizations and attend meetings and social events. Never give up on a prospective client. Stay in touch through telephone, mail, and e-mail. You won’t need to spend much money on advertising. It’s cheaper and more fruitful to invest in developing relationships in ways like traveling abroad to conferences or to make presentations in person.
Local involvement creates international contacts
Locally, I serve on the International Committee of the Chicago Association of REALTORS®, which is the Ambassador Association for the Czech Republic, and I’m active in the Chicago Sister Cities International Program. These associations help me keep in touch with what’s happening in the international sphere.
One of my most valuable activities has been the work I do with the Chicago Sister Cities International Program, which provides leader-ship for comprehensive international exchanges with Chicago’s 21 Sister Cities. Its mission is to increase international trade and economic development, and cultural and educational opportunities with its sister cities for the benefit of the city of Chicago, its residents, and its businesses. It does this by promoting exchanges in the areas of culture, trade and economic development, youth, education, recreation, medicine and technology. The program also develops public awareness, international cooperation and under-standing of the sister cities and of Chicago’s diverse multi-cultural mosaic through community outreach and people-to-people relationships.
Through local international involvement, I’ve established myself as a resource for foreign groups and individuals seeking help in Chicago, or in the U.S. When a Bohemian attorney’s organization needed a speaker, I was their man. When the new Czech consul to Chicago needed a place to live, he sought me out.
Be ready, willing, and able to do anything. Ask, “What can I do to help?” Accept consulting assignments. Volunteer for trade missions. Join business organizations with international out-reach. Attend meetings. Reach out and touch. The relationships you build will guarantee your success in international real estate. Paul L. Byron, CIPS, has 40 years experience in the business world, 21 in real estate, nine as an international practitioner. He has been a CIPS instructor, and a licensed continuing education instructor, and first chair of the Chicago Association of REALTORS® International Committee. He chairs the NAR International Networks Advisory Council and is the NAR President’s Liaison to the Czech Republic. He can be reached at pbparkplac@aol.com. |
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