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Agent of the Month: Ben Chen, Berkshire Hathaway HomeServices KoenigRubloff Realty Group
Since its establishment in 1930, Berkshire Hathaway HomeServices KoenigRubloff Realty Group has risen to become the leader in Chicago real estate.
As an affiliate of the Berkshire Hathaway HomeServices network, one of the most dominant and respected real estate brands in the world, KoenigRubloff Realty Group is renowned for their luxury marketing programmes, and consistently provides quality service to generations of homebuyers and sellers in Chicago.
We connected recently with Ben Chen, a Broker Associate at Berkshire Hathaway HomeServices KoenigRubloff Realty Group, to find out what lies behind his success with Chinese buyers. Hailing from Taiwan, Ben has been in the US since 1991. Based in Chicago for 22 years, Ben specialises in downtown Chicago real estate, with a focus on high-end luxury residential areas.
Here's what Ben had to share about Chinese interest in Chicago, as well as his latest Chinese buyer success story: a Mrs. Ye who snapped up a $970,000 high rise apartment in downtown Chicago for her daughter.
Chicago's appeal to Chinese
#1 Hidden gem appeal
Chicago was the 10th most-enquired US city by Chinese buyers on Juwai.com in 2017. However, the city is still considered as a diamond in the rough by Chinese, especially when compared to other top US cities, such as Los Angeles, according to Ben.
He explained that Chinese buyers who are eager to learn about Chicago are usually those who either have kids studying there, or relatives living there. Once they have explored and discovered the hidden gem that is Chicago, many Chinese tend to realise a desire to invest there.
“I think a lot of Chinese are still not that familiar with Chicago. Typically, most Chinese buyers would go either to the East Coast or the West Coast, where property in major cities there are already very pricey,” said Ben.
“But when they check out the city, they realise that Chicago is like an unknown hidden treasure, and they go, ‘I want to be the first to invest here – I don’t want to follow everybody else and pay for overpriced property elsewhere,’" he points out.
“I think that’s part of Chicago’s appeal to Chinese buyers.”
#2 Education
“Chinese buyers tend to follow the schools, not the city,” said Ben, and no truer words have ever been spoken.
Education is one of the top motivations driving Chinese to invest in overseas property, and this makes Chicago a compelling alternative to consider, seeing it is home to a wide selection of universities.
The University of Chicago is ranked #9 globally on the Times Higher Education World University Rankings 2018, while the Northwestern University and the University of Illinois at Urbana-Champaign are ranked #20 and #43, respectively.1
Such is the case with Mrs. Ye, whose daughter is currently studying in Iowa, which is about a 3-hour drive away from Chicago. The Ye’s, who fly in yearly from China to visit their daughter, were already relatively familiar with Chicago. Faced with the possibility that their daughter may likely study graduate school in Chicago, it made perfect sense for them to purchase a home there to in preparation for their daughter's future studies.
#3 Great return on investment (ROI)
Chinese buyers are savvy investors, and Ben often tells his Chinese clients that Chicago is a good place for investment.
“Buying property in Chicago is much less expensive compared to Miami and Boston, and yet the rental income in Chicago is almost the same as those cities,” shared Ben.
“And since rent is high here, you get good yields, and as an investor, you get more money into your pockets.”
Likewise, he further explained that because rent is high in Chicago, many Chinese simply believe it’s better to just buy a home there instead of paying rent for one.
Tips for better success when working with Chinese buyers
#1 Location, location, location
It’s all about the location, says Ben, who reveals as the first and most popular question that he often gets when he first meets with his Chinese clients.
“Overall, they usually would like to understand the location. For most Chinese, if they have kids, then they would want to ask for the school district,” shared Ben.
“If they are younger professionals, they would want to know more about downtown Chicago, such as where the restaurants and bars are, how convenient is the location.”
#2 Lay out hidden costs
Ben divulged that additional taxes and costs are the next most surprising thing for most mainland buyers in the US. This is because Chinese buyers currently pay a one-time property tax when purchasing property in China, hence there are no routine or annual property taxes to pay, he explained.
"They’re usually slightly shocked to find out that although the purchase pricing in the US is inexpensive, they would still have to pay an annual property tax, and if they purchased a high rise, then they would have to pay monthly assessment to the management office, which usually covers everything, like for your 24/7 doorman,” he disclosed.
Nevertheless, he clarified that once he laid out all the expenses as well as the potential rental income, most of his Chinese buyers were fine and accepted these hidden costs.
"Overall guidance on taxes and additional costs and fees is essential when working with Chinese real estate investors," emphasised Ben.
#3 Share lifestyle experience
According to Ben, who showed over 20 homes to the Ye family over the span of two days, Mrs. Ye was fascinated with the American lifestyle that she saw all around her.
“She told me, ‘Wow, this is how Americans live! All their homes look like a model home that is so beautiful,’” said Ben as he recalled her delight with homes in the US.
“When they come to the US and see how Americans live...all the décor, all the space, and houses that are so tidy. To them, Americans really know how to live.”
#4 Stress on safety
Safety is one major factor that heavily influences a sale, Ben stressed. Case in point: the Ye family. From the 20 homes that they had viewed, the Ye's had narrowed their choices to two final properties, and it was a toss-up between a high rise and a townhouse.
After analysing the neighbourhood and consulting with Ben, the high rise eventually won out, as they believed it was the right pick for their daughter.
#5 Figure out financials
Having seen a slight increase in issues faced by Chinese homebuyers in terms of wiring money out, Ben emphasised that Chinese buyers need to be enlightened on their financial options in the US.
“The US bank is not going to lend you any money unless you have an income in the States,” said Ben. "There may be some exceptions, such as if you bank with HSBC in China, then they MAY be able to get you a loan in the US but it would be at a very high rate," he said.
So, one of the most vital aspects for agents to figure out is the financial situation of their Chinese buyer.
#6 Go the extra mile in terms of service
Besides showing properties to the Ye family, Ben suggested agents to consider putting extra effort in helping Chinese buyers adapt and assimilate into their new home and neighbourhood.
This could range from bringing them around to get a better feel the neighbourhood, sharing information about nearby schools, or even something as simple as recommending them where to eat or shop within the area.
"I actually showed them where to purchase furniture, where to go grocery shopping...they really appreciated that," he said.
#7 Build trust and confidence
Above all, Ben stressed that gaining the trust and confidence from Chinese buyers are most important.
“You really have to win their trust. When I first spoke to Mrs. Ye, she told me that she was initially only thinking to perhaps buy a condo for her daughter, but they weren’t 100% sure,” he shared.
“She connected with a few other real estate agents in the US, but it was only after she spoke to me that she felt she could really trust me and my professionalism with this transaction, and that she felt that I really knew the market very well.”
Ben also highlighted the need to be honest and upfront, explaining that Mrs. Ye decided that she could trust him because he didn’t push her to make an urgent decision, and was very fair about the pros and cons of each home.
He quoted Mrs. Ye, who said: “We weren’t quite sure if we wanted to buy [a property] yet, but until we met you and you went through the whole buying process in a very detailed way, and so we felt that we could trust you and your recommendations.”
“I think it was really the honesty that won this deal,” said Ben.
With such trust from the Ye family, it's no surprise that the whole transaction process – from referral to site visit to closure – was successfully concluded within just three months of Ben receiving the initial lead from Juwai.
Working with Juwai
Although Ben is fairly new to Juwai, he was pleased with the opportunity presented through the Juwai partnership with Berkshire Hathaway HomeServices.
“I moved to KoenigRubloff two years ago, and I enjoy working there. This cooperation with Juwai – I would have never had that opportunity when I was with a smaller boutique company.”
