Developing an Ethnic Niche

“Homebuying seminars should be an integral part of your ethnic marketing efforts.”

Harvard University’s Joint Center for Housing Studies forecasted that within the next 10 years, two-thirds of all newly formed households will be minorities. The exploding cultural diversity within the next decade provides mortgage companies with an opportunity to develop a marketing strategy to assist these new homeowners, increase your business base, and help you develop your own mortgage niche.

The California Association of Realtors met for a daylong summit to discuss minority issues and the sensitivity of those issues within the real estate industry. They have even formed their own sub-associations within the NAR. The sub-associations include the African American-Oriented California Association of Real Estate Brokers, The Chinese Real Estate Association of America, the National Association of Hispanic Real Estate Professionals, The Hispanic Council of Realtors, and the Korean Real Estate Brokers Association of Southern California. Just think of it. Within the Latino community alone, you have Cubans, Mexicans, and Guatemalans. Within the Asian community, you have too many cultures to even begin to list.

Last year, my family and I rented a cottage on Lake Michigan. The resort that we stayed at was beautiful. It had small cottages nestled in sand dunes and overlooked the lake. There was a large stone house for activities such as pool, volleyball, and tennis. However, when we arrived we found that we were the only family who spoke only English. Almost everyone else was bilingual. The resort was a prime vacation location for the Lithuanian community, whose families had been coming to the resort for the last 25 years. Now we were the “outsiders” trying to learn a new culture. While most of the younger people spoke English, the elders spoke their native tongue. Living with and learning another culture was a great, unexpected educational experience for us. Sitting around a campfire one evening, I met a man who was a mortgage loan officer for a bank in Chicago. His clients included a large number of Lithuanians, his niche market.

With Realtors developing their own niche associations within their state and national associations, it is evident that mortgage lenders need to adapt to the changing marketplace.

One of the first steps needed to expand your customer base is to learn your community’s demographic makeup. Secondly, you need to develop your marketing strategies for reaching these different groups. Here are some consumer-direct marketing ideas.

Hire staff members who can relate to different cultures. You don’t need to be Asian to market to the Asian community. When I managed a mortgage company in Houston, Texas, some of my best referrals came from real estate agents who worked for an Asian-owned real estate company. I learned that several families live in one house. They pool their resources, income, and assets in order to qualify for a mortgage loan. I was able to find a couple of mortgage programs that fit their needs. These real estate agents also had rich clients who lived in Tokyo and bought rental homes, which I also financed for them. I am not Asian, but was able to understand their culture and needs when it came to their housing requirements.

However, speaking the language and being able to communicate in writing is just an added plus when you develop your diverse mortgage staff.

Advertise on ethnic radio, TV stations, and newspapers. Not many mortgage companies advertise with these media. The costs to advertise using them are extremely inexpensive because you are marketing to a limited audience. You may even ask to be interviewed, have an article you wrote published in the local newspaper, or host a mortgage talk show once a month.

Produce a video. Develop an informational video about how to buy a home and how to qualify for a mortgage. Speak the language. Don’t use technical mortgage terms. Your radio, TV, and newspaper ads can include an offer to mail prospects a free videotape that can be passed on to friends and family. (As an added benefit, the videotape can be given to real estate agents who serve ethnic homebuyers.)

Develop a mini-mortgage application. Have someone write the application in different languages. This is a non-threatening form that provides you with preliminary information to determine the best mortgage program for your ethnic clients. After all, the questions could be in a different language, but the answers are usually local employer information, names of banks and account numbers, and yes or no answers.

The mini-application could be distributed at meetings and cultural performances. It can also be sent to real estate agents or inserted into the videotape jacket.

Hold seminars. Homebuying seminars should be an integral part of your ethnic marketing efforts. Be sure to have a translator present at your meeting if you don’t speak the language. Show your videotape, distribute your mini-applications, and offer to provide those attending with a free copy of their credit report.

Use your voice mail or company answering machine. When someone calls your office, you may want to record messages in several languages so potential clients feel comfortable working with you from the start. For example, they could have the option to “press extension number two” if they speak Spanish.

These ideas are meant to get you thinking about how you can use the same consumer-direct techniques, but adapt them to different niche markets. By starting to develop your plans for the diverse homebuying market, you are investing in the future of your business.

by Karen Deis