Breaking into the luxury home market
It’s the holy grail for many Realtors: working with ultra-affluent clients who are buying and selling luxury homes. Whether you’re selling luxury real estate regularly or hope to break into the market soon, we’ll give you the tips you need to be successful.
What constitutes luxury real estate?
No specific dollar amount denotes a “luxury home;” that figure is mostly dependent on geographic location and current real estate market trends. For instance, the average price of a luxury home is $2.5 million in Los Angeles, but $1.5 million in Fort Worth, Texas. In general, a home listed at more than $1 million is considered part of the luxury real estate market.
Luxury real estate caters to the ultra-high net worth investor – a buyer or seller who wants something spectacular and unique.
How do I break into the luxury real estate market?
Many Realtors want to know how they can get a piece of the luxury real estate pie. The process of connecting with an affluent client is the same as any other client – only magnified. There are far fewer wealthy clients than there are real estate agents, so competition is fierce. That’s why you need to know how to close the deal once you get that coveted ultra-wealthy client. If you’re still struggling to break into the luxury real estate market, check out this expert advice from a successful Realtor.
Most high-earning real estate agents have worked their way to the top. Don’t expect to gain wealthy clients in your first year as a Realtor. Experience takes time. Start by learning the ins and outs of your market area and building your network. In time, your experience will translate to credibility, which will earn you the clients you desire.
High-end clients are typically well-educated, savvy business people who want to deal with a dedicated and knowledgeable real estate agent. Therefore, make sure you do your research and can answer detailed questions about the local real estate market and comparable properties, and that you lay out all the options for your client. Once you demonstrate your ability to find a home for the wealthiest clients, word will get around – and word of mouth is always the best advertising.
Understand the needs of your buyers
Ultra-wealthy buyers may be less concerned with the sticker price, but more concerned with the lifestyle and amenities a property offers. Make it your goal to understand your clients thoroughly. For instance, what kind of lifestyle do they wish to live? Do they want a secluded lot, or do they prefer to be in the center of the action? How about access to a country club? Do your clients want a pool, tennis court, theater room, butler’s kitchen, or mother-in-law apartment, for instance? What about space for kids, grandkids, parents, or other guests?
Once you understand how your clients live – and therefore what matters to them most – you’ll be much more likely to find the ideal property for your clients.
Pay close attention to the details
Whether you’re representing the buyer or the seller, it’s important to know every property inside and out. If you want the high-figure sale, you need to put in the high-figure effort. As the selling agent, you should know every inch of the property: construction, upgrades, finishes, materials, security features, and unique aspects of the home.
If you’re the buyer’s agent, do your research on every home you show to your clients. Know the comparable sales for the neighborhood, the unique features of the house, and how the property would fit your buyers’ needs.
Market in the right places
Luxury real estate requires a different approach to marketing. First, every detail – from staging to photography to virtual tours – must be exceptionally professional and beautiful. Then, it’s time to think outside the box. Consider advertising in magazines geared toward the ultra-wealthy. Advertise on local television. Contact other real estate agents who work with wealthy buyers. Also, be sure your website is up-to-date, professional, and features the luxury home prominently. If you need help getting your website in tip-top shape, we offer multiple tools to make your site efficient and visually stunning.
Set realistic expectations
The luxury real estate market requires one thing above all else: patience. A multi-million dollar property isn’t going to sell overnight. Set this expectation with your clients, but more importantly, set it with yourself. There’s a limited market for luxury homes, and finding the right buyer can take months. Keep advertising, keep working hard to connect with potential buyers’ agents, and eventually, you’ll close the deal.
Breaking into luxury real estate can be a merciless process. Making a sale as a Realtor to the ultra-wealthy can be even harder. But with one or two successful closings behind you, your business will begin to blossom.
Angel Bogart says
I’m really glad that you explained that luxury homes are more dependent on location and real estate market trends than the actual price, which usually starts at $1 million. Mom has long been considering investing in luxury real estate but has been quite unsure whether to go for modern, one-of-a-kind properties or fully-furnished heritage homes. She’d be glad that you explained how being in Beverly Hills or Sacramento spell how much of how the value of properties are assessed and appraised, with the more chic neighborhoods fetching higher prices even for smaller and simpler bungalows.
Becca Stewart says
Thanks for the feedback, Angel! We’re glad you found the information useful.
Penelope Smith says
Selling a luxury home does seem like a difficult thing to do. I really liked what you said about marketing in the right place. That does seem like a very smart thing to do if you are trying to sell to the ultra-wealthy.
Becca Stewart says
Thanks for the feedback, Penelope! It’s definitely a specialized niche that takes some work.
Adrian Jones says
I like how you mention that taking the buyer’s lifestyle into consideration is something to look out for especially when buying these kinds of properties. I’ve been looking for a place for my parents to retire to for some time now, so I’ve been hoping to find a place that has access to various amenities like a swimming pool and an extra kitchen for the house help to prepare their meals in. While the price for them isn’t a concern, I just want to make sure that I’m finding the right house for my parents to retire to!
Becca Stewart says
Thanks for the comment, Adrian! We hope you find the perfect home for your parents soon.
Priyanka Patel says
What a wonderful article on how to get into luxurious homes, as it is I was planning to get a new home for my family maybe this information can help me get the home of my dreams. thank you for such a nice article
Randy Chorvack says
I like how you said that a luxurious property won’t be sold overnight and to expect this. I’m trying to sell my home right now and it’s been up only for a few days. I’m glad you mentioned that it’ll take a little while to sell because it can get discouraging when it’s been up for a while and nobody has made an offer.
Great Points! I definitely didn’t regret it when I brought my home in Reno with the help of thuyrealestate.com It was honestly a steal and such a perfect house.
Casey Lovano says
Thank you for your feedback and congrats on scoring your dream home in Reno!
Peter Evering says
Dealing with luxury homes is a big game and only credible people with good reputation managed to make such deals successful. The portfolio of real estate agent matters a lot for this. Your directions are pretty helpful for existing and new agents to understand the customers and convince them with your ideas.
Becca Stewart says
Thanks for the feedback, Peter! We hope you found this information helpful. We agree: the portfolio of real estate agents does matter! That’s why we created Winning Agent, to help real estate professionals increase their reach and build successful businesses.
Derek McDoogle says
It’s interesting how you said that it is important to think out of the box when you are looking to buy a luxury home. My friend told me that he has saved money to buy the house of his dreams. I will share this article with him so that he can be aware of what to look for on a 6+ digit’s home.