Talking Up Business

Hispanic Homeowners

Language is key, but cultural understanding is more important in Hispanic real estate transactions.

By Dave Simanoff

dsimanoff@tampatrib.com

Tampa When Arturo Giammugnani set out to buy his first house in 1994, he couldnt find anyone willing or able to explain the process in the language he understood best.

It was hard to find somebody to sit with me and explain what it was that I was signing, said the Argentinian-born businessmen who moved from Connecticut to Tampa in 1990. Nobody wants to be signing documents that they dont understand, he said.

Giammugnani saw a business opportunity in his frustration, and in 1995 he founded Latino Home Loans with $10,000 in start-up capital. The company, working out of an unassuming house on Waters Avenue, employs eight people and handles about 350 closings annually. It also has launched a sister company, Latino Realty.

Since its start, the firm has helped Hispanic families in the area get more than a quarter of a billion dollars in loans. More than 44 percent of the mortgages are placed with first-time home buyers, the company said.

I never expected the tremendous growth in this community, Giammugnani said.

A boom in Hispanics homeownership in the Tampa Bay area and nationwide during the past decade has fueled the success of firms such as Latino Home Loans that understand and cater to Spanish-speaking customers. It also has drawn the attention of other firms sensing an opportunity to stake a claim in growing market.

The homeownership rate for Hispanics the percentage of Hispanics that own their homes, compared with the local number of Hispanic households lags behind the national average but is growing at a faster pace, government figures show.

Nationwide, 48.2 percent of Hispanics owned their home in 2002, compared with 67.9 percent for the country as a whole, the U.S. Census Bureau reports. However, the homeownership rate for Hispanics has leapt 18 percent since 1994, while the national rate has risen 9 percent.

Experts predict that minority first time home buyers will make up more than half of all housing sales in the next 10 years. The rise in Hispanic homeownership and the prospect of growth hasnt been lost on conventional real estate companies.

Many companies are finding that it takes more than a Spanish-English dictionary to attract and keep Hispanic customers.

There are cultural things that need to be addressed its not just a matter of figuring out what the market needs, said Ricardo Flores, a strategic director with consulting giant Cheskin in San Francisco. Flores, a researcher and consultant, works with companies trying to reach Latino consumers.

For example, Hispanic home buyers tend to build much stronger ties to their real estate agents than other groups, he said.

Once they get to trust the Realtor, the realtor becomes part of the family. That person becomes an authority, a leader in their minds, Flores said. A Hispanic customer is not going to go to a Realtor and say I want to get a loan with X or Y bank, he said. Theyre going to expect the Realtor to tell them where to go.

Companies may need to change the way they do business in order to win Hispanic customers, Flores said. Sometimes, many times, you have to do a complete re haul of what your companys doing, he said.

At Market Street Mortgage in Clearwater, company leaders changed their approach to hiring to add more minority loan officers. We had a hard time recruiting Hispanics and Africans that were already in the mortgage-banking business that were trained, said Chief Executive Officer Randall C. Johnson. In order to increase the diversity in our sales force, what weve been able to do is recruit Hispanic and African-American and Asian individuals with sales training, but from other industries.

New employees go through a six-week training program. After the training program, We are able to have qualified people from those communities go back and help people and qualify for mortgages, he said. Johnson said its important that Market Street Mortgage have loan officers that speak Spanish and understand Hispanic cultures. Socially and economically, this was an easy decision to make.

Bank of America reaches out to Hispanic home buyers with Spanish-speaking staff, billboards and bank displays written in Spanish, and a separate telephone hot line. I think weve recognized the significance of the Hispanic community, both in terms of its size and its tremendous opportunity, said Stephen Warren, the banks vice president for commercial real estate in Tampa. We really emphasize that we want these relationships and that were very serious about our commitment.

It is unclear how many local residential real estate companies have popped up to cater to Hispanic home buyers because no organization tracks such data, but the number of Hispanic-owned businesses here is to rise, government figures show. The census most recent economic statistics, completed in 1997, revealed that 9 percent of all businesses in Hillsborough, Pasco, and Pinellas counties were owned by Hispanics, up from 6 percent in 1992. Among minority-owned businesses, 3 out of every 5 were owned by Hispanics in 1997.

Nationally, about 7.5 percent of all real estate firms are owned by Hispanics, the census bureau reported in 1997. New economic census figures are schedule to be released next year and in 2005.

A Matter of Trusts

Debbie Macias, co-founder of Title-Tech Networks Inc., said many Hispanic home buyers seek out companies that dont just speak Spanish, but where they feel a strong bond of trust. It goes beyond just having people speak Spanish, she said. Latinos like to feel that you are talking to them.

Macias, born in Miami to Cuban parents, started Title Tech 3.5 years ago in Miami with her husband, Ozzie. The couple moved their family and their business to Tampa in December 2000. The company, at 3105 W. Waters Ave., has six employees; about 80 percent of its customers are Hispanic. Macias said her goal is to make customers as comfortable as possible with the closing process, even if it means explaining every document. She tells customers to call if they have any questions or concerns after the closing, or if they get a letter from a bank that they cant read. This is not about the numbers, she said.

Many Hispanics seek out Spanish-speaking real estate experts because thats the language theyre most comfortable using, not because they dont speak English. They are looking for a comfort level in a very complex process, said Karin Klaassen, a community education coordinator at Consumer Credit Counseling Services of Central Florida and the Florida Gulf Coast Inc.

Klaassen, who speak four language including Spanish, teaches a seven-hour course on homeownership for Hispanics through the counseling service. She said she understands why people would want to speak a familiar language when buying a house. I admit to my students that I speak Spanish pretty well but if I had to go down to Argentina or Venezuela and buy a home, and not in my native tongue, it would be difficult for me, she said. You can understand stand all of the nuances and specifics, and you can think a lot faster, in your native language.

Giammugnani, the Latino Home Loans founder, puts it this way: Just because someone has an accent doesnt mean hes illiterate. Giammugnani is happy to see big companies such as Bank of America reaching out to Hispanic customers.

Corporate America is realizing that the power that Hispanics have is far beyond what they had thought, he said. Im not really concerned (about competition). In fact, Im glad because Hispanics have more choices, and thats good for the whole market.