“You Asians Ruined Everything!”
My Brother-In-Law, a realtor in Silicon Valley, was taken aback when a white real estate agent suddenly said this to him. The agent was complaining about the negative practices of some Asian-American real estate agents. My Brother-In-Law (I’ll call him BIL for short – he lives with me as part of my extended family) told me about some of these: giving a kickback/credit to buyers when working as a buying agent and encouraging double ending transactions (representing buyer and seller) by giving sellers commission discounts when this happens. With lots of low ball commission rates offered by Asian-American agents, the clubby real estate world of 6% commissions is gone from the Valley forever.
The white agent didn’t talk about any of the positive aspects of Asian-American influences in real estate – such as helping to maintain prices and driving certain markets, particularly in those areas with good school districts. Here in Silicon Valley, housing in well known “good” school districts such as Palo Alto, Cupertino, or Mission San Jose commands a premium, driven by education oriented Asian-American parents. Even in areas with not so good school districts that are popular with Asians, such as where I live in North San Jose, houses go fast. A house around the corner sold in a week.
Asian-American tastes are driving other changes in real estate. Knowledge of Feng Shui is becoming a critically important part of selling and even in new house design. A house at the cross point of a “T” intersection has bad Feng Shui, and many Asians won’t buy it. Moreover, if anyone has died in a house, it becomes much harder to sell. I remember a real estate agent we used who offered to thrown in Feng Shui services which would include detecting if anyone had died in the house. Some builders have learned to cater to Asian-American extended families by building new houses with a bedroom with a full bath on the ground floor, designed for housing older Asian-American parents living in extended families.
Outside of Silicon Valley, Asian influences on housing are appearing in places like New Jersey and Georgia. This article from USA Today describes how Asian influenced mixed used developments and high-rises are sprouting up around the country, much like Asian influences have affected the architecture of Vancouver, Canada (when I first saw Vancouver, it reminded me of Hong Kong). Gwinnett County in Georgia is building high-rises, encouraging higher density developments, and is actively courting Asian investors.
BIL tells me that Asian and Asian-American buyers have sensed the bottoming of the Silicon Valley real estate market and are driving a pick up in sales. Many are backed by investors or family from Asia and are buying foreclosed houses cash and bidding up prices. I think we will continue to see a growing influence in real estate by Asian Americans, both financially and in housing design.
(Flickr photo credit: Ernie)
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13 Comments to “Asian American Influences in Real Estate: Silicon Valley and Beyond”
Dan W wrote:
This is pretty interesting. I'm sort of seeing this throughout the country, especially a lot of the Asian-Americans who are building their homes and buildings instead of just buying pre-existing ones. It's not just the urban areas but also a few small cities/towns and rural places I noticed.
Posted on 16-Aug-09 at 7:35 pm | Permalink
Real Estate Internet Marketing wrote:
That's nice, some of Asian-Americans can now build their homes and know live well because of real estate and also giving them a good areas for school district.
Posted on 16-Aug-09 at 9:51 pm | Permalink
johnklin wrote:
“I remember a real estate agent we used who offered to thrown in Feng Shui services which would include detecting if anyone had died in the house.” – How does somebody detect if anyone had died in the house? Hire Miles from Lost?
Seriously?
Posted on 16-Aug-09 at 10:06 pm | Permalink
Peter08 wrote:
Interesting. Well, this is indeed a world of diversity and race. It is only right to respect others for who they are. Thanks for sharing. By the way, I know a great Kentucky home that might interest you too. Thanks.
Posted on 16-Aug-09 at 10:35 pm | Permalink
jeffat8asians wrote:
Well, the real estate agent said that his Feng Shui guy had some kind of magic compass that would spin in circles if someone had died in the house. That's what he said! We didn't use these particular services, btw. The magic compass should be unnecessary, because one of the disclosures by the seller (at least in California) asks whether anyone died in the house, but perhaps the intent is to catch people who lie about that.
Posted on 16-Aug-09 at 10:41 pm | Permalink
timat8asians wrote:
In California, the disclosure only requires you disclose if someone has passed in the home for the last 3 years. If someone died in the house before 3 years ago, you'd have to do your own research to find out. Also it's also based on the seller's knowledge (if someone died and they didn't know about it, they can't disclose it obviously). As for the spinning compass, I don't know if it'd work, but I'd be interested in seeing one!
Posted on 17-Aug-09 at 9:39 am | Permalink
bigWOWO wrote:
Kickbacks are highly, highly unethical. They poison the market. In this case, I agree 100% with the White realtor, and it's unfortunate that our people do this. I'm also sorry to see that this poor behavior among Asian people isn't limited to Oregon.
Jeff, I'm sure you're not in the industry (or you would've mentioned this), but I hope your brother-in-law understands how kickbacks hurt everyone and contribute to our dis-empowerment as people. Simply saying that Asians buy places in good areas does nothing to tarnish the stain of bad behavior. It would be like excusing Kenneth Lay or Bernie Madoff just because they gave money to charity.
Posted on 17-Aug-09 at 5:17 pm | Permalink
jeffat8asians wrote:
I am not in real estate, but my brother-in-law definitely understands how unethical these practices are and often complains about it himself as he also gets affected negatively. He points out that most of the problems are from a small number of infamous Asian-American agents who make a large amount of money (lots of transactions) while messing up the reputation of all Asian-American agents (who really resent that). You are absolutely right – it distorts the market, as the highest and best bids don't always win, or the highest bids are enabled by those kickbacks.
Posted on 18-Aug-09 at 12:42 am | Permalink
Asians, Ethics, and You | big WOWO wrote:
[...] this case, I saw this post by Jeff at 8 Asians. In the post, he talks about a White Realtor telling his brother-in-law that [...]
Posted on 17-Aug-09 at 10:45 pm | Permalink
raleighrealestateblog wrote:
Great article! Thanks a lot for it!
regards
Posted on 18-Aug-09 at 4:48 am | Permalink
bigWOWO wrote:
Thanks for your comment, Jeff. I'm not a Realtor, but I'm in the business. There is just so much double dealing in our community that it makes it hard for us to shed that image. Your BIL is right that a small number of infamous and “successful” AA agents are usually the ones who lead it, but I've seen that behavior trickle down to the smaller agents as well. Customers get roped in, and pretty soon, there's almost an expectation of kickbacks and dirty deals.
Anyway, I've had ethics on the mind because of a number of projects I've been doing recently. I blogged it here:
http://www.bigwowo.com/2009/08/asians-ethics-an...
I'm really happy that you guys see the problems with such conduct, but many in our community don't. I just don't know how we can change this aspect of our “culture.”
Posted on 18-Aug-09 at 2:13 pm | Permalink
mrrice wrote:
Real estate agents are crooks, why should anyone care if they aren't making their unjust lofty commisions. This is capitalism at work, baby.
Posted on 28-Aug-09 at 2:03 pm | Permalink
Real estate marketing wrote:
test
Posted on 09-Sep-09 at 6:21 pm | Permalink
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