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Are you concerned about a decrease in transactions due to the National Association of Realtors (NAR) Council litigation settlements and resulting policy changes? Many agents are. There are two ways to make more money: sell more homes or sell higher-priced homes. Nearly every selling program focuses on selling more homes, but few teach how to sell more expensive homes.
After 33 years in the real estate industry, I’ve learned what works and doesn’t work for wealthy buyers and sellers. There is a misconception that luxury buyers or sellers are more sophisticated than the average customer.
They are often very good at one thing, which makes them successful, whether as lawyers, doctors or business owners, but they often know less about real estate.
Plus, since most affluent buyers are cash, you don’t have to worry about financing or dealing with an appraiser who values the property for less than asking price.
Have you ever wondered why some agents in your market sell more expensive homes? Are you intimidated by the thought of working with more affluent clients, buying or selling $1 million, $2 million or $5 million+ homes? Here are some strategies to increase your average sales price: Get higher-priced listings and buyers and increase commissions.
1. Define luxury in your market
What is luxury in your market? Many real estate agents think of luxury homes as multi-million dollar homes. Yes, but it’s better defined as the 10% most expensive homes on the market. For some markets, that might be $500,000; for others, it might be $20 million.
2. Make sure you look the part
Clothes, cars, marketing materials. You need to be consistent so that whenever you go out, you look high-end but not overdressed for your area.
For example, in Malibu you would never wear a sport coat or tie.
Things to consider in Malibu are:
- Do your business cards and logo match your luxury brand?
- Are your marketing and promotions aligned with the customers you want to attract?
- Does your A-frame open house or real estate sign need an update or rebrand?
Visit high-end open houses. Analyze the listing agent’s marketing materials, appearance, and how they present the home. Do your outfits match the images on your website?
3. Consider your title
everything. Most likely, your title is bUye is abeautiful, dirtyCorrelation or some variation, especially when you’re in a team. If you’re on a team, ask your team leader if you can start using the Sales Partner title. High net worth individuals will feel more comfortable dealing with a sales partner, even if the sales partner may be younger or less experienced.
4. Understand luxury market data. Attend a luxury seminar or negotiation course
This is one of the most important lessons: Luxury customers need your expertise more than you think.
Understand your luxury market, including average price, median price, days on market and cost per foot. Always use annual data rather than monthly data because there are fewer transactions, especially at higher price points, and using less data may skew your numbers.
Each area is very localized, so knowing whether more funding is needed to the north or south of a particular community is critical.
Many wealthy buyers and sellers have business managers, accountants, attorneys, and brokers whose main job is to protect their clients (and prove their worth), so they expect you to be well-versed in real estate data and trends.
Research your central city and any neighboring cities where you work:
- What are the most expensive homes selling for in 2021, 2022, 2023, 2024?
- What are the top 10% of homes sold in 2021, 2022, 2023, 2024?
- Look for any trends or unusual changes in prices or sales quantities.
Take an advanced negotiation course such as the RENE (Real Estate Negotiation Expert) course from Harvard Business School, the Calas Negotiation Seminar, or the National Association of Realtors, or the Luxury Real Estate Seminar or Real Estate Designation (Luxury Home Marketing Expert).
The unsold inventory index is the best way to measure the market. It will tell you whether you are in a seller’s market or a buyer’s market. To calculate it, you divide your existing inventory by the number of homes sold last month.
More than five months is considered a buyer’s market, and less than five months is considered a seller’s market. We have seen as little as 1 month and as much as 20 months. This is a great tool because it’s not uncommon to see a seller’s market at the entry price point (minimum 10-20%) and a buyer’s market in the luxury market in the same area.
In some markets, high-end homes tend to be sold off-market (due to sellers’ privacy concerns and not wanting an open house or sign out front), so it’s critical to check public records or work with your title representative to obtain this information.
Keep a list of off-market home sales to better understand the luxury market. This will also impress lawyers and business managers of luxury clients.
5. Know what your USP (Unique Selling Point) is
What’s your secret? Something you do better than anyone else on the market. This takes time to figure out and is even harder to articulate when working with buyers.
There are a few points to consider:
- Do you have a driver to pick up your out-of-town buyers from the airport?
- Do you have an extensive database of off-market homes?
- Are there any foods or drinks you notice they like to have on hand when you bring them home?
- Are there any schools that can arrange visits for them?
If they have children, arrange for them to meet other families with children of a similar age. If it rains, please bring an umbrella. If time is of the essence, put your sandwiches and drinks in the refrigerator. Preview all homes to avoid surprises. Get CubiCasa floor plans of the homes so you can show them the layout of each home.
6. Use the media
This is the area with the highest utilization but the highest return on investment. Start writing articles about the most expensive homes in your area in local newspapers and online. You don’t have to be the one selling it.
Start writing a blog about the top three homes each month, how much they sold for, including where they sold, how long they stayed on the market, and any key facts. Ultimately, you will be considered an expert in luxury goods.
Research and create a spreadsheet of real estate writers from local newspapers, favorite real estate podcasts or radio shows. Schedule a coffee or Zoom date with them to discuss what articles or topics they want. Consider creative and timely articles that will be of interest to your readers.
Start writing a few articles. Take dictation, use ChatGPT to plan, or hire someone to help you write them.
Here are some tips. When the media calls, answer as soon as possible. Treat the media like a hotline. Their terms are usually short. The first person they reach out to gets an interview.
Cultivate media relations. Be a contrarian thinker. They love unique perspectives, like why spring isn’t the best time to sell your home. Use data wherever possible.
7. Meet luxury buyers and sellers
Sponsor or attend luxury events. Join high-end social groups, clubs and charity committees. Start a charitable giving program. Consider getting involved in polo, equestrian, car shows, whiskey clubs, food groups, boating, wine, cigars, golf, or any place where wealthy people might gather. You have to be truly interested in luxury events for it to be authentic.
Check your door-to-door flyers. Are they seller-focused or more focused on you and your company? For high-end sellers, focus on topics like putting the home into a living trust, obtaining a HELOC (home equity line of credit), or helping them renegotiate with the county assessor to lower their property taxes.
Join a high-end networking group (made up of lawyers and financial people), preferably with a minimum (high) income level.
Consider paying for coffee for 30 people in line at your local Starbucks or a popular coffee shop in an affluent area you want to break into. Then, sit down at a table with real estate information on the table that identifies you, and ask the manager to let people know you purchased their coffee. This is a relatively cheap way to meet people.
Try contacting the hotel concierge and befriending them, or if there are any guarded communities around you, befriend the guards. Bring them movie tickets and coffee gift certificates in exchange for them handing out your cards.
8. Strategies to Increase Average Selling Price
Aim to increase average sales price by 20% and then develop a strategy to achieve that goal.
Use a luxury marketing company like Leverage RE to market your high-end home. They advertise every week wall street journal, washington postRob Report, financial timesJuwai.com, Barron’s and Juwai.com (China’s largest MLS). They are the best investment for marketing high-end properties.
9. Be confident and believe in yourself
Do you have the ability (confidence) to sell high-end properties or represent celebrities or high-net-worth individuals? You have to have confidence in yourself because successful people need confident people.
I don’t mean that as arrogant or arrogant, but know your numbers and become an expert on relevant sales, understand off-market properties and ultimately do what is in your client’s best interest. This might tell them not to comment on properties that are overpriced, difficult to resell, or have other issues.
Anthony Margulies is this Founder of Amalfi Estate. Connect with him on Instagram and LinkedIn.
