“Success in real estate is about building strong relationships and creating value for everyone involved.” ~ Robert Kiyosaki.
There is no doubt that Robert Kiyosaki, the American tycoon and businessman, was right. Success in the real estate world, all the more so when it comes to investments and development overseas, rests first and foremost on strong, reliable and stable interpersonal relationships.
Real estate development abroad is fundamentally different from local real estate development. In the Israeli market we operate “from home,” with a familiar language, clear laws and standards known in advance, whereas in development abroad we encounter bureaucratic and regulatory difficulties and sometimes even language difficulties. In addition, there is a fundamental difficulty, which is cultural gaps. Success in international real estate requires building strong relationships and creating value for all the parties involved. Understanding the differences between Israeli clients and clients “from the big world” and adapting communication and service strategies accordingly is critical to success in this field. This understanding may be the difference between success and failure.
Differences Between Israeli and International Clients
- Culture and communication style: While Israeli clients may be direct and even assertive in negotiations, international clients may be more reserved and polite. Understanding these cultural nuances is essential for building good relationships and conducting successful negotiations. Learn the culture of your local clients and be sensitive to cultural differences.
- Expectations and transparency: Israeli clients are used to a high level of transparency and ongoing updates. By contrast, international clients may expect a higher level of formality and periodic updates.
While the local client will make payments on time and come from time to time to see the site, if at all, the Israeli client will ask to receive updates on a monthly, and sometimes weekly, basis on progress. A developer we worked with on a project he built in Eastern Europe installed cameras on the site to supervise construction remotely, and at the same time gave the cameras' access code to the Israeli buyers as well. He told me about a buyer who called him one day to warn him that the work was not progressing at the desired pace because he could see a tractor standing on the site that had not moved for several days.
- Trust relationships: Building trust is critical in any business relationship, but it is especially important when working with international clients. International clients tend to be more cautious and to look for proof of the developer's reputation and ability. In many countries, banks will also not rush to provide financing for the project of a developer for whom this is the first project in the country, and local buyers will wait to see the structural frame or the model apartment before they sign a purchase agreement. Invest time in building trust with your clients.
- Language differences: Language barriers can pose a significant challenge when working with international clients. It is advisable to consider hiring a team that speaks the language of the country where you are building. Sometimes the incorrect use of a word and/or expression can sink a deal, especially when you are not versed in all the nuances of the local language and slang, so be careful to communicate clearly and concisely and avoid using slang or local expressions.
Real estate is people, and that is not just a slogan. Beyond the team, which every developer needs to be the most professional that can be hired in the country where you operate, who know how to locate, identify and solve problems on the ground, what matters is the conduct toward clients. For me the most important thing is full transparency, honesty and a high level of professionalism during the negotiations for signing purchase agreements and during ongoing management. This should not change when difficulties and challenges arise. On the contrary, raising difficulties as early as possible and with high transparency will be appreciated much more than concealment or waiting until the last moment, especially the less good and more surprising and painful the solution is. When a problem arises, it is important to update and give full disclosure to the buyers as early as possible. To present to them transparently the solutions and alternatives, to increase their certainty and let them know they have someone to rely on, and that the developer is active and making efforts to fix the situation.
Remember that building relationships takes time.
“The most important thing in communication is hearing what isn't said.” Peter Drucker
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית