(This is Part 2 of a three-part series. Read Part 1 and Part 3.)
Do you know the American buying code? Do you know what unlocks buying behavior in other cultures? If not, here are more keys from the Inman News Connect High Net conference in Miami
Last week’s article looked at the work of Clotaire Rapaille and Jurgen Klaric on luxury anchors. Rapaille’s book, “The Culture Code,” identifies key anchors for Americans. Here are a number of other codes based upon the buyers’ culture.
America: Big is Better When You’re Afraid
Americans like “big,” especially when it comes to our refrigerators, cars and garages. We super-size almost everything. According to Rapaille, American society is fear-based and hence, being bigger and more powerful matters. For example, Rapaille’s research shows that the culture code for sex in America is “gun.” Guns, like sex, can harm or kill you and must be treated with care. We are also obsessed with not becoming ill. Rapaille comments on this when he describes how the French treat their cheese versus how Americans treat cheese. To the French, cheese is alive. It should be served the day it is purchased and the aroma is critical. Americans found a French commercial, where a woman sniffed and poked the cheese to determine if it was ready to eat, to be disgusting. Instead, Americans want their cheese “dead.” They pasteurize it, wrap it up in plastic, and put it in the morgue (i.e. their refrigerator) where it may sit for weeks. The French buy their food fresh daily, so having a large refrigerator is unnecessary. In contrast, Americans prefer to shop weekly and thus, require more space. Our big SUVs make us feel safe and of course, we need big garages in which to keep them. For American clients, it’s extremely important for them to feel safe, secure and dominant. The challenge for agents is that the agents have the same need to be dominant. The smart agent lets go of this need and shifts to providing the client with information. The client owns the decision. Remember, “It’s their house and it’s their decision.”
Hispanics: The American Dream
According to Klaric, what matters to Hispanic buyers is having both immediate and extended family nearby. In fact, if you look at the Hollywood “ideal” family, it’s a two-parent family where mom stays home and cares for the kids. The family engages in activities together and can count on other family members to pitch in when needed. This is an important part of the “code” for Hispanic luxury buyers. Many opt to be in a less desirable area provided it’s close to their community. When you’re representing luxury Hispanic buyers, emphasize the community and show them how they can become integrated into the community’s social life. Unlike Americans who will commute long distances to have a large house in the suburbs, Hispanic buyers are willing to compromise on property features to be closer to their loved ones and to be active in their local community.
Europeans: Location and Quality Matter
Over the last few years, there has been a tremendous influx of European buyers into the U.S. market. They are willing to pay a premium price for premium properties. According to Klaric, many of them will not haggle about the price, provided they perceive that the property has the status, location and quality they seek. They also tend to be quite private about what they do. Unlike in America where we ask, “What do you do for a living?” Europeans find this question rude. There are also class differences in what they consider to be luxurious. For example, in England, members of the aristocracy live in castles or estates, often with poor heating and poor plumbing. Riding and hunting are what matters rather than having numerous amenities. In contrast, it’s the upper-middle class who own the modern properties. Italians are especially interested in owning beautiful art. Esthetics are more important than size. If you go to Rome, you’ll see plenty of men wearing Armani suits riding on Vespa motorcycles. Most Americans would opt for a car rather than the pricey clothes. A consistent pattern among European luxury buyers is that they will use the Internet to do most of their investigation prior to coming to the States to see the property. If the property meets their expectations, they may fly over, put their cash down, and be prepared to close within days.
The Russians are Coming!
Due to the tremendous influx of money into Russia from oil exports, some of the wealthiest Russians are now coming to the United States with the singular goal of buying the most expensive and the most luxurious homes in the country. They have been particularly active in both New York and London. Frank McKinney, who is building what will be the most expensive home in the U.S., described how he handled Russian buyers who view his $20 million to $30 million homes: “The chauffeured Bentley limousine must be waiting at the airport. A representative from Cartier must be available so that the buyers’ ‘traveling companions’ can do some shopping while they’re here. The house must be turnkey, right down to the gold-plated toothbrushes.” The buyers must feel assured that they are purchasing the crème-de-la-crème of all properties.
India and Asia: Education First
Many of today’s new billionaires are in their 20s and 30s and came to the U.S. from the Far East. Buyers from India want to have the best possible schools for their children. They may purchase a large property to accommodate a large extended family. They tend to dress simply and not to display their wealth. In contrast, one of my former clients from Hong Kong explained the Chinese approach to purchasing luxury property. “Our homes must reflect harmony, but they are also a way to display our wealth and success. A man’s level of success is judged by the home he provides for his family as well as the jewelry and clothes that he provides for his wife.” Education is held in high esteem throughout the Far East. Consequently, schools and the prestige of the area are critical.
What else matters to the luxury buyer? Frank McKinney is building the most expensive spec house in the U.S. How will he market this $135 million property? See next week’s article to learn the marketing plan that may land the biggest residential sale in U.S. history.
Bernice Ross, national speaker and CEO of Realestatecoach.com, is the author of “Waging War on Real Estate’s Discounters” and “Who’s the Best Person to Sell My House?” Both are available online. She can be reached at bernice@realestatecoach.com or visit her blog at www.LuxuryClues.com.
