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Chairman’s Message: Raising The Stakes — Breaking into the Luxury Market

Quincy Virgilio: MLSListings Inc 2015 Chairman

Quincy Virgilio: MLSListings Inc 2016 Chairman

With the popularity of reality TV shows like “Million Dollar Listing” and the general affluence in Silicon Valley, we’re seeing a surge in high net worth properties. While the definition of “luxury” varies by market, it is typically defined as a combination of price and high end amenities such as a separate home theater, a robust wine cellar, a multi-story garage, signification architectural touches — anything that signifies quality, sophistication, and exclusivity.  The high commissions can be a strong lure for agents and brokers wanting to move into this specialized demographic. Do you know what it takes to attract, serve, and keep this type of client?

Understanding the Market and Marketing
According to a panel of luxury market real estate professionals at the recent Real Estate Connect conference in New York City, luxury market buyers are typically very knowledgeable about the market and are often aware of available properties even before they are listed, which puts added pressure on the broker or agent to stay on top of upcoming listings. In fact, these buyers are coming to their agent with specific properties they want to see, not asking for a list of what’s available.

Marketing in the luxury market also has different nuances to traditional strategies. For example, in the higher end price ranges, open houses are often eschewed for events that are more exclusive. A listing agent may opt to host a small gathering of hand-selected real estate professionals, or a private event, such as a wine tasting, to showcase a luxury property to agents and their clients. This eliminates the problem of the curious, non-buying neighbors, or “looky-lous,” from traipsing through the seller’s home.

Online marketing is also critical when operating in this niche space, and the tools are getting much more sophisticated. Drones are being used in the Bay Area to shoot video of expansive, high-end properties because they can give a much better view of the property, as well as the surrounding areas. These videos are being uploaded to social media channels like Twitter and YouTube, as well as agent sites, and they are generating a lot of interest from the serious buyer of these types of properties. It’s particularly invaluable to prospective buyers who are living in other markets or other countries.

Working with High New Worth Clients

Like every other client, the well-heeled buyer or seller deserves the very best service but they have much higher expectations. It pays to understand the nuances of how they prefer to work with their real estate professional:

  • Respect their privacy. You may be tempted to mention to colleagues or friends that you are working with a well-known or wealthy client, but these individuals almost always prefer to keep their transactions confidential.
  • Respect their time. These clients are always busy and place a premium on their time, so make the transaction process easy and convenient, communicating via email where possible and using tools like virtual 3-D tours and electronic signatures for documents to provide greater efficiency.
  • Listen carefully. Make sure you fully understand their needs, and pay attention to cues in order to engage with them in a way they prefer; if they are all-business in their demeanor, don’t waste time making small talk or jokes – get to the point and deliver information succinctly and professionally.
  • Be prepared. Make sure you have seen the properties you intend to show them to ensure they meet the exacting specifications of the client. Have information at the ready during the showing.
  • Pay attention. When you show a property, pay attention to what they are doing in the house, what they are noticing, and how they are feeling about the property, and speak to that.
  • Treat them special. These clients are accustomed to luxury lifestyles so consider using chauffeured cars for touring properties and provide food and drinks during the ride or at a particular property you are showing them.

Cultivating High Net Worth Clients

If you want to break into the luxury market, you need to start by moving in the same circles as the individuals you want to represent. A good place to start is by networking with financial planners, attorneys, wealth managers, and others who serve this population and are viewed as trusted referral sources by high net worth individuals. You need to be adept at socializing and developing relationships with not only these influencers, but also the end client. It’s important to think globally as well, because your pool of buyers and sellers are often coming from markets like China and Russia. Marketing and building relationships in international markets is critical in looking at your business “circle.” The broader you can expand your network of connections, the greater likelihood that you will build a reputation as a luxury market expert.

Often, this niche business grows by word-of-mouth referrals from satisfied clients, as well as through repeat business from the client who buys and sells multiple properties, and rarely from traditional marketing methods.

Cultivating relationships with these key resources and educating them on why you are well suited to serve their clients’ real estate needs is a good way to get your foot in the door of this exclusive market. Once you have successfully managed a transaction for a high-end client, you will have the opportunity to broach the subject of referrals to their friends or family.

The luxury market and the high net worth individuals who buy and sell in it require a particular approach and attitude by real estate professionals. It’s a concierge type of business where you must cater to the needs of this client and go above-and-beyond to satisfy them. They can be demanding and sometimes have unrealistic expectations, but the rewards can be significant in the types of relationships you build and the revenue boost that these transactions can provide.

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