Chinese New Year is the most celebrated holiday in China. The Chinese follow the Lunar calendar year, which different cycle from the typical Western calendar.
This year, Chinese New Year will start on January 27. This holiday is so special in China that the government is providing a seven-day holiday (Jan. 27 through Feb. 2).
This holiday period is also considered to be a time when most wealthy Chinese will travel internationally. Last year, a whopping 6 million Chinese traveled overseas and, according to ForwardKeys, international travel will likely increase almost 10 percent during this holiday.
The U.S. is a favorite destination and as such, real estate agents should be ready for this peak season.
Hundreds of Chinese who have been sending inquiries through our platform at East-West Property over the last few months are now getting serious with Chinese New Year approaching.
Many of them are taking a full two weeks off, sufficient time to make the long trip to the U.S., shop for luxury handbags — and houses or condos.
What are the Chinese looking for?
Chinese outbound visitors have different schedules and plans, but they are mainly looking for the following:
Sightseeing and learning about a different culture
Experiences and stories abroad are often regarded as a sign of knowledge to the Chinese, which is good content to share with their friends upon return.
The fast development of mobile social networking tools (WeChat) in China also allows any Chinese to easily demonstrate to all their friends how colorful their life is.
Shopping
Almost all Chinese outbound visitors have a purpose or task in mind for their overseas trip. They shop for themselves and their friends who ask them to bring something back.
Why? Many products have a much higher price in China than they do abroad, and shopping in China comes with high tariffs.
Viewing properties
The real estate industry in China has seen an amazing return and is regarded as one of the best investments globally in the past decade.
Instinctively, the Chinese are sensitive about real estate and interested in learning about the differences between real estate in the U.S. and in China, and potential opportunities.
Outbound visitors are often the wealthiest Chinese, meaning future international real estate buyers are the also the tourists that you will see during Chinese New Year holiday.
How to increase your chances of closing deals
Here are 5 tips on how to secure a deal in the two weeks that the Chinese will travel overseas for the holiday.
Connect before the Chinese arrive in your city
The most important way of connecting with Chinese is via WeChat, as it is the most important social media tool in China. The app can be downloaded on your phone for free and allows you to call other WeChat users for no charge (even internationally) or send text messages and videos.
This is a great way for U.S. agents to communicate with the Chinese while they are still overseas.
All of our member agents have signed up for an account and our team usually sets up conference calls with agents and clients using WeChat.
Make a good impression right away
Joining a conference call with a client or sending some generic messages via WeChat is a great first step, but it is not enough.
Of course, it’s important to send listings over as soon as possible, in two waves.
Your first set of listings should include almost all of a city’s available listings (much broader than the client’s criteria) and the second set of listings should be hand-picked.
Most Chinese buyers do not know what they want, so the more listings, the merrier. But the second customized set shows that you understand the client’s requirements, listened and did the screening work.
The second way to make a good impression while a Chinese buyer is still abroad is by providing other relevant content. For example, the Chinese love to learn about the school districts, so we have seen our successful agents sending information about schools (for example, acceptance rates, teacher-to-student ratio, etc.)
Sending recent information about the property market is much appreciated as well.
Put together a comprehensive schedule
Now that you have built the connection and made a good first impression, it’s time to demonstrate that you know your business.
By now, you will have collected your buyer’s criteria, purpose for buying and other important factors.
As such, you can prepare a list of selected properties to tour with he client.
Pick them up at the airport or hotel
The trip from China to the U.S. (a 12- to 16-hour flight) is long. Consider helping Chinese buyers by picking them up at the airport or at their hotel.
They will appreciate the gesture. Feel free to share some tips about the surrounding areas, schools and sightseeing that they can check out in their free time. This will certainly earn you bonus points.
Be patient when negotiating an offer
The goal is to have Chinese visitors make an offer on one of your chosen listings.
This is where the plan often goes wrong. The Chinese may make a low-ball offer on a house in hopes that they can get a good discount.
In many cases the market will not support this strategy, but Chinese buyers might opt for it anyway. It is their usual way of approaching a house purchase, and they do not always trust the feedback from an agent who is advising them.
While this can be frustrating, we recommend that agents show the data of previous closed transactions in the same area and explain patiently why the low offer won’t work.
The client usually will still insist and, as an agent, you will then need to proceed. Over time, and probably after losing out on that first offer, a Chinese buyer will become more cooperative.
Because foreign exchange regulations have become stricter, some Chinese might face challenges in making a cash deposit. However, while they might not be buying during this trip, they could come back and make a purchase, so building the relationship is key.
Sam Van Horebeek is a director at East-West Property Advisors, a U.S. real estate platform based in China. You can follow on Facebook and Twitter.
