Want to sell a house in a Chinese neighbourhood of Toronto? If the house address ends with the number four, you may be out of luck. But if the address ends with the number eight, you may be able to sell for higher than the asking price.
This is according to a 2010 Superstition in the Housing Market thesis study done in the Vancouver School of Economics at the University of British Columbia. The study concentrated on the Greater Vancouver Area housing market. But its findings apply to any neighbourhood in Canada that's predominantly Chinese. It found that "in neighbourhoods with a higher than average percentage of Chinese residents," homes with addresses ending with the number four sell for 2.2 per cent less than houses with addresses ending in other numbers. Meanwhile, house addresses ending with the number eight sell for 2.5 per cent more.
Lucky Number 8 by Jay Springett
3,000 years of home-buying tradition
Why is your address number — which may seem meaningless to many Canadians — so important in Chinese neighbourhoods?
"Culture is a big, big consideration for Chinese people," says Tracy An, a Sotheby's real estate agent who moved to Toronto from China 12 years ago. She is fluent in both English and Mandarin.
There's more to it than address numbers. Many Chinese homebuyers also put a lot of emphasis on issues such as which direction the front yard faces. An recently had a Chinese client who turned down "the perfect house" because the front door faced a major intersection.
These are cultural factors many people would call superstitions. They're rooted in the ancient Chinese practice of Feng Shui. It teaches that issues such as building design and furniture arrangement can affect a person's health, prosperity and luck. Not all Chinese people practice Feng Shui in their daily lives. But An says these issues still play a major role in her real estate transactions with Chinese clients.
Chinese Lucky Cat by Samantha Marx
"Even if it's the perfect house for them, they won't consider it because they know they're probably going to have problems when selling," An says. In other words, even if Chinese buyers aren't immediately concerned about matters of Feng Shui, they're aware the next buyer might be.
An notes, however, that this only applies specifically to Chinese communities. "If the community is mixed, it might not be a problem," she says.
There are a few other things besides Feng Shui you should be aware of when dealing with Chinese clients. For starters, the way we buy and sell properties in Canada is not the same as how people do it in China.
"The culture for doing business is different here and in China," says An. "In China...at least a few years ago, you didn't have to be licensed to trade real estate," An explains.
That means Chinese people have different expectations when it comes to buying and selling properties. The main business complication An deals with regularly when she's working with Chinese clients, is the buyer's commission.
"Quite a large portion of Chinese people want some kind of incentive from their agent," she says. "For example, if the buyer's agent gets a 2.5 per cent commission, the buyer wants one per cent back to their pocket."
This expectation stems partly from the way real estate transactions work in China. Says An, "In China the commission is paid by both sides. Sometimes it's paid by the seller, sometimes it's paid by the buyer. It depends how you negotiate."
To avoid running into problems, An says, you should be clear about commission up front. Some Chinese clients may be expecting a cut, even if they don't say anything about it. "If you don't explain this sort of thing to your client, you may get in trouble," she stresses.
You should also be prepared for this: Some clients may not want to work with you if you're not willing to share your commission. "I do lose clients because I say 'no'," An says. But for her, the issue is clear. "Why shouldn't I get paid what I deserve?," she asks.
For a realtor who hasn't spent time in China and doesn't speak Chinese, the prospect of selling real estate in a mainly Chinese neighbourhood may seem intimidating. But An says, even realtors without any Chinese background can do well in Chinese neighbourhoods. If they're acting as a seller's agent, anyway.
When listing their properties, many Chinese people like to rely on local agents with experience in the listing area. This is because they'll most likely have better marketing skills, An explains. Even if sellers have trouble communicating in English, in many cases they'll prefer listing with a local agent. An says this is because these clients know their listing will be handled well, "and they'll get the maximum amount of money for their property."
Toronto Chinatown by The City of Toronto
You can get by without knowing Chinese, or having a Chinese background, if you're the seller's agent. But it's different when you're the buyer's agent. An says being able to speak or understand Chinese "definitely will help you a lot." Having a Chinese background is even more important for representing Chinese buyers. "Even though Chinese people have good English skills, we still like to deal with other Chinese people," An says.
Knowing the cultural nuances simply makes your life — and decisions you make — as a real estate agent, easier. "If the house is facing the intersection, or has a number four, I'm not going to show it to my client," An says.
Title photo by: Montagious