Grow Your Business Through Diversity

October 15, 2020

The consumer market continues to grow in its diversity, and it is critical title and settlement companies establish real connections with multicultural audiences—including staff—to be relevant today and in the future.

Multicultural essentially means representing different cultures or cultural elements. A person may identify as being a part of several different cultures or races. Diversity is important in today’s business environment. A third of the U.S. population (328 million) is comprised of minorities:

  • 6 million Hispanic
  • 44 million African American
  • 18 million Asian American Pacific Islander

“It’s important to understand a large portion of the country is minorities and you have to talk about that as it pertains to opportunity,” said Teresa Palacios Smith, chief diversity, equity and inclusion officer for HomeServices of America. “This includes hiring recruits, promoting management and making sure that you are servicing your clients to their varying needs.”

U.S. minorities represent a combined buying power of $5.2 trillion—which is more than the gross domestic product of Australia. The homeownership rates of minority groups continue to lag the overall rate of 65.1 percent as of fourth quarter 2019, according to the National Association of Realtors. The ownership rate for non-Hispanic White Americans has been consistently above 71 percent from 2016 to 2019. In the same period, the homeownership rate for Black Americans has been 30 percentage points less—above 41 percent. For Hispanic Americans, the homeownership rate has held above 45 percent, and for Asian Americans, it has been above 53 percent over the same time period.

“If you look at these numbers, you can see you could really gain an opportunity of business by concentrating on these different segments,” Palacios Smith said.

Additionally, two out of every five millennials and two out of every four Generation Z are minorities. Half of all babies born are multicultural, according to U.S. Census Bureau.

Palacios Smith said diverse organizations are more success at recruiting and retaining talent. She added that people of color want to join companies where they see diversity. In addition, turnover levels tend to be lower when diversity is high.

“When a company has management that’s diverse, the loyalty increases,” Palacios Smith said.

A recent study by the Boston Consulting Group found that "increasing the diversity of leadership teams leads to more and better innovation and improved financial performance." It looked at 1,700 different companies across eight different countries, with varying industries and company sizes. They have found that increasing diversity has a direct effect on the bottom line. Companies that have more diverse management teams have 19 percent higher revenue due to innovation.

Understand Market Needs

Companies need to understand the numbers in their market and decipher the opportunities. The buying power among the African American community has increased nearly 40 percent over the past decade. There are 44 million underserved. “There’s a lot of opportunity to create trust and homeownership in this area,” Palacios Smith said. The largest growth opportunity, according to Palacios Smith, is the Hispanic/Latinx community, with $2.6 trillion in buying bower. “This group is willing and able top purchase homes,” she added.

Depending on the market, there also may be specific groups to focus your efforts:

  • LGBTQ Community: $917 billion in purchasing power; This group of estimated 10.1 million people are influencers and loyal to brands.
  • Military Community: There are 26.4 million active duty veterans; 19 percent of all homebuyers and 21 percent of all homesellers are veterans and active duty military service members
  • Women: This group makes 85 percent of all consumer purchases and make 91 percent of home purchasing decisions. According to NAR, women accounted for 11% of the homes purchased in 2019. 17% of first-time home buyers and 18% of repeat home buyers were single women. A quarter of all investors are women.

Research and Data

So, where do you go to find this data? There are many resources, Palacios Smith said, such as city-data.com, data.gov, Neighborhood Scout. In addition, she recommends talking to people in the neighborhoods. Prior to COVID-19, Palacios Smith had success striking up conversations with her Uber drivers.   

Understand Culture and Needs

  • African American: A question Palacios Smith often receives is how what’s the proper way to refer to this demographic. Is it Black or African American? Experts say it is a matter of preference. The National Association of Real Estate Brokers (NAREB) said their preference is to provide inclusive language that represents the entire scope of the community, so they use the term Black. States with the largest population of African Americans are Texas, Georgia, Florida, New York and California. Top cities include Jackson, Miss.; Detroit, Mich.; Birmingham, Ala.; Miami Garden, Fla.; and Memphis, Tenn. According to Palacios Smith, cultural nuances for this group include households led by women, strong family and spiritual orientation, financial support to other family members, involved in local charities and long-term renters. To connect, it's vital to understand historical events, importance of Black Lives Matter, local sports and arts. What can title companies do to gain the trust of this group? Partner with local churches and help create homeownership seminars, support credit counseling services, celebrate historical events and causes, create educational podcasts, communicate benefits of title, attend black college events and career fairs, promote diverse talent, create internship programs.
  • Asian American: Palacios Smith said there are so many languages spoken in this demographic, so it’s important to understand their background. According to the U.S. Census, two thirds of Asian Americans live in five states (California, New York, Texas, New Jersey, Hawaii and Illinois). Meanwhile, the Midwest is the second fastest growing Asian American region in the country. How do you work with this community and what are the important cultural values? Palacios Smith said the Chinese New Year is very important, as well as humility, saving face, investments, feng shui (arranging the pieces in living spaces in order to create balance with the natural world) and numerology. In this community, decisions take longer, owning a home is important and like to negotiate before and after. To build trust, over communicating and embracing community and culture are important. Title companies looking to penetrate this market should understand the cultural importance, market on social media platforms such as WeChat, attend college fairs and sponsor university events, co-host homebuyer education and investment courses, align with cultural experts, do not be boastful, celebrate cultural events, participate in Asian Real Estate Association, partner with financial institutions and translate documents into language.
  • Hispanic Latinx: This community will account for 30 percent of the U.S. population by 2050 and 56 percent of new homebuyers by 2030. Hispanic refers to language. Palacios Smith said it’s a term denoted to those whose ancestry comes from the country of Spain or Spanish-speaking countries. Latino or LATIN-X (gender neutral) refers to geography. Specifically, to persons or communities of Latin American origin. People from the Caribbean, Central and South America. Including Brazilians, who speak Portuguese. The best thing to do is ask. Most likely, Palacios Smith said, you will likely hear “I am American/Mexican/Colombian/New-Yorican.” Top states for this community include California, Texas, Florida, New York and Illinois. More than half of U.S. Hispanics live in 14 major metropolitans, with L.A.-Long Beach-Anaheim topping the chart. According to the Hispanic Wealth Project, 25 percent Latinos are more likely to own an investment property outside of their primary residence than non-Hispanic White households. Also, 40 percent of Latinos who do not currently own a home, plan to buy within the next five years. Family is at the center of Latino financial decision making. Religion remains strong in this group, as are sports, but soccer rules. In the Latinx community there is a distrust of financial institutions. Owning a home is a symbol of pride. Title companies wanting to gain the attention of this group should consider using social media such as Instagram and Whats-App to promote programs, attend college fairs for recruitment, host homebuyer education courses at churches and create cultural relevant marketing.

“Now is the time to create opportunities to grow diversity in your company,” Palacios Smith said. “The hallmark of successful people is that they are always stretching themselves to learn new things and to find ways they can improve their lives and business.”


Contact ALTA at 202-296-3671 or [email protected].