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Key takeaways:
- Hispanics aren’t a monolithic group—some may speak English but prefer contracts written in Spanish, for example—so don’t market to them in a boilerplate way.
- Seek out partners, such as inspectors, attorneys, and mortgage brokers, who understand the nuances of working with Hispanic clients.
- Education on home equity and credit is key for this group, so help make them aware of available programs and housing counseling.
As the son of Mexican immigrants, Armando Chacon, broker and managing partner at Century 21 S.G.R. in Chicago, remembers growing up in a modest apartment. His father was a butcher, and his mother stayed at home. Chacon also recalls the day his parents bought their first house—which gave their family a sense of security and pride for the first time. His parents went on to buy another building, where they opened a grocery store.
“For my family and others, homeownership has allowed us to build wealth that we can pass along to our kids,” Chacon says. “I’m grateful to experience generational progress thanks to homeownership.”
Today, Hispanics make up almost 19% of the U.S. population—62.1 million people—and they are becoming an increasingly important economic force. The number of Hispanic homeowners rose by more than 700,000 to nearly 9 million in 2020, and that figure is forecast to grow rapidly. So, what can you do to ensure you’re ready to serve this growing demographic?
Prepare Your Brokerage
The Urban Institute projects that over the next 20 years, 70% of new homeowners will be Latino, forming 4.8 million households. The National Association of Hispanic Real Estate Professionals’ 2020 State of Hispanic Homeownership Report shows the Latino homeownership rate increased for the sixth consecutive year. Despite being disproportionately affected by the COVID-19 pandemic, Hispanics were the only demographic in the U.S. that increased its rate of homeownership each of the past six years.
Brokers and agents need to be ready to work with this growing consumer base. Erika Villegas, broker-owner of RE/MAX in the Village and 2022 Chicago Association of REALTORS® director, recently purchased a second home in South Haven, Mich., but was surprised that there wasn’t one Spanish-speaking agent in the area. “It blows my mind because there is a large Spanish-speaking population there,” she says.
The lack of Hispanic real estate professionals is an issue in larger metro areas, too. Last year, Villegas acquired a real estate office in Aurora, Ill., which has one of the largest Hispanic populations in the state. But the office had only one Hispanic associate broker. So, brokers and team leaders would be wise to focus on recruiting bilingual and trilingual agents. “If you’re looking for ways to grow in [the Hispanic] market, someone who speaks Spanish is going to do well,” Villegas says.
In addition to finding Spanish-speaking agents, real estate pros should have the right partners in place, such as inspectors, attorneys, mortgage brokers, and others who can help their Hispanic clients. Mabél Guzmán, a broker at Coldwell Banker Realty in Chicago and past president of the Chicago Association of REALTORS®, participated in the CAR webinar, “Race in Real Estate: The Latin American Experience.” She says that from a brokerage standpoint, it’s important to market to Latinos in your area. But keep in mind, she adds, it’s not a monolithic group. For example, some may speak English but prefer their contracts to be written in Spanish.
Advertising in Spanish and English and connecting with real estate companies in Mexico and other Latin American countries is another way to tap into the Hispanic market. Being thoughtful about the conversations you have with Hispanic clients is also crucial, Villegas says. You never want your clients to feel uncomfortable.
Hispanic Buyers Face Market Challenges Today
As an immigrant who came to the U.S. early in his life, Luis Paredes, an agent with Century 21 Simpson & Associates in Lexington, Ky., understands the situation Hispanic families face. “I was in their shoes. I know the survival state of mind that most Hispanic families get stuck in. To be able to go from paying rent to paying a mortgage is huge,” he says. “Most families don’t know they can pay way less for a mortgage then rent, and they’ll be able to call it ‘mine’ after they finish paying it off. That’s the American dream immigrants come for.”
Education on home equity and credit is key. Many Hispanic would-be buyers have no credit because they try to avoid debt or have trouble saving enough for a down payment. “Having a fairly significant down payment is a plus but not always necessary. There are lending programs that we need to make the Hispanic community aware of,” Chacon says. Real estate pros should make themselves aware of what’s available and point clients toward knowledgeable mortgage brokers.
Paredes says his company has come up with a way to help address these issues by giving seminars at their neighborhood library to educate families about the process of buying a home and building credit. They also invite a mortgage broker to help answer questions regarding the lending process.
Maira Fernandez, broker-owner and president of Century 21 Realty Group in Guttenburg, N.J., says one of the biggest challenges her clients are facing is the continued lack of available inventory. Villegas agrees that inventory is also an issue in the Chicago metro area, and because many of her clients are FHA buyers, their offers often get pushed to the bottom of the pile. “When a seller is looking at four or five or 20 offers, cash is always at the top,” she says. Many of her buyers have to submit eight or nine offers before one is accepted, and she often finds herself explaining to colleagues and attorneys that FHA offers aren’t much different from conventional offers.
Discrimination is also still an issue. Last summer, Villegas had an agent on the other side of the table ask if her Hispanic buyers, who were moving to a high-end area, knew the neighborhood and where their money was coming from. “Sometimes it’s heartbreaking, but you have to push on and correct people. It happens more than you might like to think,” Villegas says.
Career Barriers as a Hispanic Real Estate Pro
Ruth “Drussy” Hernandez, vice president of brokerage services at Coldwell Banker Realty in Chicago who was a panelist during CAR’s webinar, says her knowledge and experience has been challenged in certain environments because she’s a minority. Despite years in the industry, she continues having to prove herself to her colleagues. Fernandez echoes Hernandez’s sentiment, saying that a common professional barrier for Hispanic women is that “we have to prove that we can do the job.”
Guzmán says people have told her she doesn’t “seem Latina.” “What does that mean? Because I don’t have an accent?” she laments. Guzmán also says she overprepares in order to show her value.
Ironically, Chacon acknowledges, Hispanics make up a low percentage of his business because his area has a small Latino population. Because of that, his name presents an obstacle to winning over customers, he says. “I felt I had to work harder than everyone else. I was simply relentless and was able to have year-over-year growth in my business—and I’m doing it in an affluent area.”
The Significance of Homeownership in Hispanic Cultures
Villegas says Latino families take great pride in homeownership and work hard to achieve that goal. “My grandmother came to this country in the ’70s and didn’t buy her home until the ’90s. She worked tirelessly, raised nine children, and cooked food every day of the week on top of her full-time job in a factory to save for a down payment,” Villegas says. Her grandmother would get up at 3 a.m. to make tamales, which she sold as a food vendor. Both of her grandparents would also cater local events and weddings as a side business.
“For many Hispanics, making a personal sacrifice is necessary if they want to buy a house,” says Fernandez.
It’s also common for many Hispanic families to share the same roof, helping the entire household financially to buy their dream home.
“When you become a preferred partner or an advocate for Hispanic homeownership, you’re not just helping one family but the entire population,” Villegas says. “They’re hardworking people with the same dreams as every other family in America. We just have some challenges we must deal with. We’ve overcome a lot of them over the years, but we need people to see us for who we are.”