Tips from the pros: How to sell luxury real estate

Think you can’t compete with the area’s well-established and entrenched, number-one luxury real estate agent? Think again, oh aspiring high-end home sales superstar.

If you have the bucks, the marketing chops and a bit of tenacity, you, too, can be flogging luxury real estate and earning the big commissions they bring.

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Consider finding a luxury real estate mentor 

The luxury home listing and marketing process is so different from any other real estate niche that you simply cannot “fake it until you make it.”

You need to enter the niche with solid knowledge of how to price luxury property, the insight as to how to market unique properties and a robust marketing budget.

There’s only one way that I can think of to get all three of those requirements at once and that’s by working, at least for a time, under a luxury home specialist.

Even a seasoned agent should treat a change in niche as a brand-new business, so don’t discount this idea because you’ve been in the industry since the Jurassic period

We’ve talked a lot about hiring an assistant, but going about finding a mentor is an entirely different matter.

Realty Billings owner/broker Amber Uhren agrees. “By shadowing a mentor, they’ll not only learn this first-hand, but they’ll be able to see how a master deals with various situations.”

If you don’t have a “master” luxury listing specialist in your office, or he or she is stingy with time and knowledge, consider switching to the office in town where this paragon of high-end sales is located.

Then, be a sponge – soak up every nuance of the agent’s business, look over his or her shoulder as she comes up with market value for luxury listings (and ask questions), tag along on listing presentations and contract negotiations.

And do ask if you can view their business plan. Yes, you will need one of those.

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Pricing the luxury home

Quick – what’s the difference between these two homes?

 

The problem – at least when it comes to determining a list price and a marketing plan — is that there isn’t one difference, but many, and they are vast.

The average agent is more familiar with pricing the home on the left, and that’s because there are tons of comparables. How many comps do you think you’ll find in the area surrounding home number two?

So, how will you come up with market value for the high-end home? Even a ball-park figure?

The first rule of pricing luxury property is: “Know everything there is to know about every home in the neighborhood,” according to luxury home specialist David Kean of Douglas Elliman Real Estate in Beverly Hills.

I interviewed Kean a few years ago and he said that he makes a point of touring every new luxury listing that comes on the market.

That way, when he gets a listing and he’s trying to price the home, “I’m not just looking at comps on paper. I have actually been through each house and I know the layout, I know if there’s a telephone pole blocking the view,” he concludes.

And, most important, he knows and makes note of each home’s amenities. Because, despite the fact that these homes aren’t identical, each home’s amenities factor into the formula for determining the market value of luxury property.

In the end, though, when comparing a home that features a $17-million hand-carved bathroom and a nanny’s quarters to one with two home theaters and a two-lane bowling alley, will you know how to value each amenity?

If you’ve been mentored by an expert, you will.

Finally, Laurie Moore-Moore, founder of the Institute for Luxury Home Marketing, and author of “Rich Buyer, Rich Seller” (a guide for luxury real estate agents), suggests that before you crunch one number for your CMA, find out what the client thinks the home is worth.

“As I begin my comparable research, is there a particular property sale you would like me to pay special attention to,” could be the question that saves your bacon when you sit down with the homeowner over your listing presentation.

 

Why?

“Chances are they have heard about a neighborhood sale which they are using as a benchmark for the value of their home,” she begins.

“The property they have in mind often sold for much less than the final sales price they heard through the neighborhood grapevine. What’s more, the home may not be a reasonable comparable,” Moore-Moore continues.

“If you don’t ask this question, you may go back to your office and do the best CMA in the history of the world, ignoring the property your seller has in mind because it is not a good comparable sale. However, your seller will look at your perfect CMA and think that you missed the most important comparable,” [in his estimation], she concludes

By the way, you can learn a lot about luxury home marketing on the ILHM website, especially on the Luxury Insights blog.

Real estate marketing requires knowing the audience

Marketing to the affluent homebuyer takes a lot more than a mere mention of a chef’s or gourmet kitchen. Understand the brands that ring their chimes, such as Crestron, Miele, Philippe, Downsview and Wolf.

Highlighting a home’s branded features speaks to the homebuyer who identifies with the lifestyle. And, if you aren’t familiar with that lifestyle, warns Boca Raton’s Senada Adzem, “Florida Power Broker to the Super Rich,” marketing their homes will be almost impossible. She suggests that the budding high-end property lister should immerse him or herself in the peer group.

The best way to do this? We asked Senada and, it all comes back to finding a mentor. “They need to offer to work for someone who is already working in the luxury industry,” she replied.

Just as not all tract-home buyers are the same, most luxury home buyers are different. In fact, you might consider them an entirely different breed, that come in a number of different … for lack of a better word …  “species.”

• Working with young affluent buyers is quite different from working with wealthy retirees.
• International and domestic buyers are entirely different, from culture to, possibly, language and distinct sets of desires in a new home.
• The first-time high-end property buyer will present different needs and wants than the seasoned buyer.
• Some luxury buyers come with an entourage of decision makers, from lawyers to accountants, while others may be flying solo.

A few characteristics, however, seem universal. For instance, while they may or may not be prey for paparazzi, most luxury real estate homebuyers commonly crave privacy.

Knowing all the possible audiences for luxury home marketing is one thing. Knowing which to target for a particular listing is something that takes experience.

Then, there’s the money thing

Let’s assume you have the marketing prowess to market a high-end home in the appropriate venues, with laser-focused materials. Whether this includes drone footage, a snappy Hollywood-esque short marketing film, extravagant soirees or color ads in luxury lifestyle publications, you’ll need money.

And, what if the homeowners have moved out? Do you have the budget to hire an interior decorator and stager?

No more snapping listing photos with your iPhone, no more hoping that a lockbox and sign will bring in a buyer.Luxury real estate marketing requires a luxury-sized marketing budget.

And, it’s not just your clients’ marketing needs you’ll need to finance. Your business’ marketing will cost a bundle as well, at least if you hope to attract affluent clients.

From your internet presence (an appealing website, stuffed with QUALITY real estate content and focused social media exposure) to nurturing a large and varied network of contacts (cocktails with lawyers, dinner with public relations folks, treating a reporter to lunch and entertaining fellow luxury home agents), the old “it-takes-money-to-make-money” adage means more than ever.

Breaking into the luxury real estate market niche takes time, money and someone to help walk you through it. Start with a mentor and the rest will fall into place.

Marketing luxury homes requires a professional online presence – see how LeadSites can help.

Need creative ways to market your listings? We’ve got 200 tips to help you dominate your market.

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