Real Estate agents got a wake-up call today. Results of the most extensive survey ever of ethnic-group attitudes toward professional real estate services were unveiled. Home Buying Among Ethnic Groups examines attitudes and expectations of Hispanics, whites, blacks and Asians.
The telephone survey of 4,000 Texans was commissioned by the Real Estate Center at Texas A&M University, a non-profit agency funded by the states real estate licensees. The survey should prove particularly useful in Texas, says Gary Maler, Center associate director, where a burgeoning Hispanic population offers a vast untapped market of future homebuyers. Agents who understand the varying needs of their ethnic clients will be putting up more sold signs in the future.
Because Hispanics are the fastest growing ethnic group in America, they were intentionally over sampled in the study. Interviews included more than 1,800 Hispanics. The U.S. Census Bureau projects the U.S. population in 2040 will be 53 percent Anglo and 47 percent non-Anglo, the identical percentages seen in Texas four years ago. The potential real estate market is sizable. Forty-eight percent of Hispanics who do not own a home say that they are likely to purchase a home in the next two or three years. Real estate agents who conduct business in Spanish have an advantage, Maler says. Hispanics told researchers that they prefer or need to work with an agent who speaks their own language when engaged in real estate dealings. More than any other ethnic group, Hispanics say they feel uncomfortable handling business transactions in English. Of the four ethnic groups surveyed, Hispanics had the least experience with real estate agents and with homeownership.
Hispanics are most likely to have never used an agent to buy or sell a home. More contact and positive experiences with real estate agents plus information about the homebuying process should encourage Hispanic homeownership, Maler says. Certain homebuying behaviors and attitudes are common among Hispanic respondents, such as regarding family as a primary source of information and advice. Unlike the other groups surveyed who turn to an agent or broker first for real estate advice, Hispanics are more likely to first consult a parent.
Real estate agents should think in terms of family, friends and relationships when working with Hispanics. If agents provide good service, referrals from family members should follow, Maler says. More than half of the Hispanics surveyed believe it is difficult to qualify for a mortgage. Hispanics are less likely than other groups to consider the homebuying process easy.
This represents an opportunity for real estate agents to educate clients about financing options and the home buying process, Maler says. Most Hispanics surveyed say they are comfortable buying a home with a small down payment. However, fewer Hispanics say they are willing to extend themselves financially by making larger monthly payments than they currently are making as renters to be able to own a home. Hispanics have the lowest expectations of what they will pay for a home.
They are the most financially conservative group of the four ethnic groups surveyed. Who do Hispanic home buyers want to work with? Many Hispanics of all income ranges prefer an agent who can relate to them, meaning the agent speaks Spanish, has the same ethnic background, is young and has a neat work space. All survey respondents want the agent to manage the closing process in its entirety. They consider it important for the agent to explain the process, explain contracts, set the right asking price and negotiate on their behalf. Maler says the report shows that real estate companies looking to expand into Americas growing ethnic populations need to do their homework and not treat all home buyers alike.
All home buyers expect the same basic set of real estate services,says Maler. However, the delivery and approach used by an agent should vary depending on many factors, including ethnic background. In general, comfort with the home buying process, positive experiences with real estate agents and the likelihood of using an agent in the future are associated with owning higher value homes. Maler outlined some of the specific ethnic-group findings. Blacks are more likely to view all aspects of the home buying process as easy. More than the other ethnic groups, they have high opinions of real estate agents and are more likely to think using an agent is a good idea. When they need real estate advice, blacks first go to a broker or agent, then parents and then to a mortgage company.
Blacks also think it is hard to qualify for a mortgage loan. Asians are more likely than the other groups to buy a home in the next few years. They are willing to pay more than their current rent to own a home. Generally, Asians have positive views of real estate agents and rely on agents for advice and information. They own the biggest and most expensive homes and are more likely to purchase a newly constructed home. They feel comfortable with the overall home buying process.
Asians are the most likely group to successfully negotiate real estate fees. They visit the most homes before making a decision to buy. Whites are least likely to buy a home in the next few years. They are the group that is most willing to pay significantly more than their current rent to own a home. While whites think most aspects of the home buying process are easy, they say the biggest difficulty is finding an agent they are comfortable with. Whites think it is a good idea to use an agent to buy and sell a home.
Although the study should be representative of the four ethnic groups home buying behaviors and attitudes, Maler cautions real estate professionals to beware of generalities when working with individuals in each group. One size does not fit all, and individuals within each group may not act in lockstep with their peers, he says. The Real Estate Center contracted with Harris Interactive, the market research and consulting firm best known for the Harris Poll, to conduct focus groups and the survey. More than 4,000 Texas residents, including 1,870 Hispanics, 880 whites, 772 blacks and 481 Asians participated in the telephone survey.