On Cultural Differences
Not surprisingly, people from different cultures have differing manners and attitudes about negotiation. Some purposefully more passive than what Americans expect; others quite a bit more aggressive. So it pays to do a bit of homework on this factor. But an understanding of the real estate process and contract is much more important than knowledge of cultural idiosyncrasies. In the end, they will use the same process and contract as anyone else.
~~~
We are constantly told that if we are dealing with people from foreign cultures, we need to be cognizant of cultural differences, in business generally, and in negotiations specifically. To use a fairly benign example, some Asian cultures do not use or appreciate a direct no. Rather no is couched in, I’ll have to think about it or I’ll get back to you, etc. Sometimes with an appropriate level of feigned embarrassment for good measure. It all has to do with saving face or providing the other party with the opportunity to save face.
And hey, I’m fine with that. If I know that I am going to be doing several deals with Japanese foreign nationals, I might even go out and buy a book on the subject: Japanese-Style Negotiations, or whatever. The Harvard Program on Negotiation offers: International Negotiations: Cross-Cultural Communication Skills for International Business Executives.17 You get the idea.
And surely people from Latin America and Africa have their own cultural distinctions. And even within geographic regions, there will be differences. Think Japanese business culture as compared to, say, Philippine business culture. Or German compared to Greek.
Some of these differences can be quite interesting. And I know that studying these will help you with any cross-cultural negotiation. On the commercial side, I once served as tenant representative to a large Japanese chemical firm seeking an expanded office in our market. We looked at many possibilities, and a number of them would have worked. But in one of these, the landlord representative knew his Japanese business culture, and he nailed it, without overdoing it. He made subtle changes in his presentation and attitude, and I think that is what appealed to my client. And they leased space in his building.
So sure, if you know you have a client coming into town next week from Tokyo, why not give it a couple of hours? But if you wanted, you could spend all your time studying cultural differences. So how important is this type of thing on the residential side? Well we have bought and sold houses for people from all over the world: Europe, Latin America, Asia, Africa, and certainly the Indian subcontinent. And I would say knowledge of any specific cultural idiosyncrasy is less important than the simple respect that you would give any client. If you combine this with a natural level of sincere curiosity, you’ll be fine.
Let me give you an example. There are many foreign nationals in our market, particularly from Asia. Early on, I dealt with clients searching for homes for whom the concepts of Feng shui were important. I knew absolutely nothing about it. Now I could have, and perhaps should have, gone out and researched the topic extensively. But I never did. Rather, when a client would say something would not work, I would be genuinely curious as to why. The clients felt I was listening and I did ultimately learn quite a bit about Feng shui. So that is my simple advice: Be respectful and be genuine.
But this is more important to understand: Regardless if the cultural difference is on your side, or the other side, or even on both sides, the real estate transaction is the same. Your Chinese clients may not accept a house with the front and back doors aligned or at the end of a street, but by golly, they are going to use the standard form contract. The Egyptian buyer on the other side may use family funds or some type of Sharia-compliant financing, but the real estate transaction will be very similar to a buyer from Omaha. The Indian buyers may have vastly more negotiating experience, and comfort with aggressive negotiation, than your typical American sellers, but they will tailor their efforts to fit the terms in the contract.
And in all of these cases you will find varying degrees of competence with the process and the contract. I know very little about Sharia finance. But that buyer better get it done before the expiration of the Due Diligence Period. Point is, if the broker does his job, these cultural differences take a huge backseat to transactional competence.
So whether the cultural difference is on your side or the other side, knowledge of these differences is less important than simple respect. And like any other deal, knowledge of the process and the contract remains paramount. Tip O’Neill liked to say that all politics is local. Well if there is anything more local than politics, it’s real estate.
_____
17. See the Program on Negotiation, Harvard Law School