Manage the lending process for multicultural consumers

The multicultural home-buying segment is outpacing the general market in both population growth and buying power, according to new figures from the U.S. Census Bureau.

But recent changes in lending practices as well as strict qualifying criteria challenge some multicultural homebuyers, especially given limited credit history, non-traditional sources of income such as part-time jobs and cultural aversions to debt and credit.

Carefully managing the multicultural homebuyer’s loan process is a great way for REALTORS^® to grow an often overlooked customer segment.  Brokers who have been successful in servicing multicultural homebuyers found demonstrating trust and carefully facilitating the entire transactional process as sound best practices when working with multicultural homebuyers. 

Multicultural homebuyers look to the REALTOR^® as an advisor throughout the transaction.  Many REALTORS^® have reported that transactions were lost when multicultural homebuyers were mistakenly placed with lenders who did not understand the cultural and language nuances.  For example, lenders not being aware that a down payment gifted from extended family overseas is a norm or that not addressing elder members of the family first during the loan process are a few cultural missteps that can result in lost clients and commissions.  Some real estate brokerages solve such problems by having in-house lending services that supply the cultural expertise required by the multicultural consumer.

It’s important that REALTORS® remain engaged with multicultural homebuyers during the loan process. Many such consumers see the home-buying process — including lending, survey, inspection and appraisal — as being one and the same and will look to the REALTOR® to guide them through the transaction.  These buyers expect REALTORS^® to handle the transaction from beginning to end; the mortgage lender is generally viewed as an extension of the REALTOR®’s service. 

Not monitoring the progress of the transaction or not providing updates to a multicultural homebuyer can be viewed as abandonment of the relationship.  In cultures where relationships come before business, this can be costly and result in lost referrals.

The best advice to REALTORS® who want to expand their services to include this growing segment of the home-buying population is this: partner with a lender who understands the needs of the multicultural consumer. Make sure they have the services and committed team that shares in your professional goal of expanding your customer base.