Understanding Cultural Differences in Real Estate Transactions

Canada is one of the most multicultural countries in the world. In fact, nearly 25% of the population was born abroad, according to Statistics Canada. This diversity influences our daily lives, whether it’s interacting with colleagues or buying or selling properties with people of different backgrounds.

In real estate, you can face all sorts of situations, from different negotiation strategies to misunderstandings about how the offer process works in Canada. A little knowledge and understanding of these situations can help you interact comfortably, without offending or feeling offended, and avoid missing out on business opportunities.

“Local means global, especially in Canada,” says Sharon von Schoenberg, Associate Director, International and Trade Programs, at the Canadian Real Estate Association (CREA). “It’s essential to be open-minded to understand the differences between people and how they can work together.”

You May Face Various Negotiation Strategies

If you receive a poor offer on your home, try not to take it as an insult. In many countries, a low offer is simply an accepted starting point in negotiations.

“At the end of the day, everyone likes to negotiate,” says Dimitrios Andrianakos, a real estate broker with Royal LePage du Quartier in Montreal, Quebec. “But in some cultures, this tendency is more pronounced and haggling is a custom. So if you receive a low offer, don’t be offended and reject it right away. It may be the start of a negotiation that will allow both parties to get what they want.”

One of Andrianakos’ clients had received a poor offer, and he advised him to counter it.

“Finally, after several counteroffers, we came back with a firm and final offer, and the buyers said yes. Sometimes, this kind of negotiation is part of the process.” This gives buyers the feeling that they have done everything in their power to get the best deal.”

People follow different processes to make decisions

In some cultures, big decisions aren’t always made by one person; the whole family is involved. When someone buys a property, they may decide to consider the wishes of their elder family members (parents, grandparents, older siblings). So even if someone is interested in a particular property—and pays for it themselves—they may back out if their family doesn’t agree.

“In hierarchical cultures, people greatly respect the opinions of their superiors,” says Terri Morrison, author of Kiss, Bow or Shake Hands and an expert in cross-cultural affairs. “In China, for example, Confucian principles dictate that there is always an elder in a relationship: a father with his son, an older sister with her younger sister, and so on. Sometimes in these cultures, consensus is the norm, and people derive their identity from their relationships with others. So if you want to buy a Jeep, but your family wants you to buy a Jaguar, you'll buy the Jag. If you went against your family and lost those relationships, you would essentially lose your identity."

Real estate processes can vary greatly from country to country

When people from other countries buy properties in Canada, some confusion is inevitable, whether it’s about the role of a real estate agent or the buying process. For example, the requirements for obtaining a real estate brokerage license can vary: some countries have very strict rules about this, while others don’t require any licensing at all to buy and sell properties.

“In [some countries], buyers sometimes have to talk to multiple agents to find out what properties are for sale in their area,” says von Schoenberg. “Real estate agents can feel confused when their clients contact multiple agents to find out what’s on the market. In reality, there’s nothing sneaky about it; clients may not realize that Canadian agents have access to all the Multiple Listing Service® (MLS®) listings in their area.” »

Attitudes toward contracts can also vary in surprising ways. Non-Canadian buyers often change their minds after an offer is accepted. A real estate agent or broker who can educate their clients on Canadian practices can help smooth the process.

“Contracts are considered a Western convention,” says Morrison. “In countries where the legal system is not based on common law or civil law, people don’t mind saying, ‘Yes, we signed the contract, but we’d like to renegotiate it a little bit.’ They’re not trying to complicate things, they just know a different legal system, or a different culture, where contracts aren’t as binding as they are in North America.”

Mortgage pre-approval is also not a universal part of the process. Andrianakos says that for some buyers, it means their ability to afford a home is being questioned, which they feel insulted about.

“Of course, that’s not the case at all,” he says. “It’s just the due diligence that many real estate agents in Canada want to see, because pre-approval speeds up the process and can give buyers an advantage if multiple offers come in.”

Retaining the services of a broker or agent who has intercultural skills can be particularly useful

ACI – International helps members develop these cultural skills and sensitivity. The team provides brokers and agents with resources, directs them to professionals in other countries, and offers events and courses that strengthen their knowledge of international real estate. Of particular note are the courses leading to the internationally recognized Certified International Property Specialist designation.

Learn more: Earning the Trust of International Investors – Guide for REALTOR® Holders

Whether you are looking for a real estate broker or agent who understands Canada's multicultural market or are considering purchasing a property in another country, Canada's real estate brokers or agents have in-depth knowledge not only about the home buying process. a property, but also on how to negotiate and act according to cultural differences.

Keep in mind that in real estate, there is no right or wrong negotiation technique or approach, and most likely, no one is trying to insult or offend anyone. Differences should be celebrated, and being open to those differences can lead each person to discover new possibilities, maximizing the chances of success for all parties.

Source : Realtor.ca