Of course, what qualifies as “luxury” varies by market. In the U.S., for example, the average price for a luxury home is $2.5 million in Los Angeles, $3.6 million in NYC, $1.5 million in Fort Worth, Texas, $2.3 million in Miami and $1.1 million in Cincinnati, according to the 2018 edition of "Luxury Defined: An Insight into the Luxury Residential Property Market," published by Christie’s International Real Estate. But in general, luxury connotes quality, refinement and exclusivity.
Real estate agents who specialize in luxury real estate deal with ultra high net worth individuals. And there’s more to working with these folks than simply showing expensive homes. Here, we take a look at what it takes to become a real estate agent for the ultra-rich.
It’s in the Details
“I think the biggest trait that successful real estate agents share – and this is also the same for luxury agents – is to pay attention to the small details,” says Vivien Snyder, a residential broker associate and Certified Luxury Home Marketing Specialist (CLHMS) with Beverly-Hanks & Associates Realtors (see Understanding The National Association Of Realtors) in Asheville, N.C. “Luxury homes are usually large and can't fit into a ‘price per square foot’ category, so you need to be aware of the features in the construction and finishes from the structural components as well as the finer appointments,” she says.
“Think of the last time you bought a car. The luxury cars have full-color marketing books that talk about the engines, safety and features. Well, consumers want to know even more details about a future home purchase. You need to understand the unique features of a home.”
Even more than other customers, ultra-rich clients can be demanding. One of the better ways to meet their demands is to be detail-oriented and prepared. “A client can always be more demanding if they are confused about something,” says Snyder. “Be specific, timely with your information, and be the expert whom they can trust. Be organized and concise.”
Anticipating questions before they are asked, and really listening to determine what questions and concerns may be (even if people don’t ask outright), is essential to keeping clients well-informed and happy. “So, listen for the questions and prepare your answers,” says Snyder.
Do real estate agents themselves have to be wealthy and well-connected to find – and work with – ultra-rich clients? “Absolutely not,” says Snyder. “But they do need to be experts in the market. They need to be able to talk intelligently on comps and to have been able to have seen the homes that are for sale, as well as the inventory that has sold.”
Besides filling in clients about the real estate market, agents should be ready to share detailed information about the neighborhood. “Agents also need to be experts in the area, including information about non real estate – clubs, art and recreational opportunities in the community; tax base; restaurants; golf and so forth,” says Snyder. “A lot of the clients are going to have home offices, so they also need to know about things like internet services and flight information from local airports.”
Sphere of Influence
A popular way for any real estate agent to build contacts and generate leads is through a real estate sphere of influence (SOI) strategy that focuses on generating leads through the people the agent already knows, such as family, friends, neighbors, classmates, business associates and social contacts.
Developing a sphere of influence becomes very important to agents working with the ultra-rich. Because most people will buy, sell or rent property at some point in their lives, every person an agent meets could become a client – not necessarily right now, but perhaps at some point in the future. Making an effort to learn about each person in your sphere of influence – and getting into regular contact with them – can make a big difference. “So often, the right buyer may not be actively looking for homes, but will make a quick decision if the right property comes along,” says Snyder.
Networking with other agents and professionals is also good practice. “You need to have a network of agents both in and out of the market,” says Snyder, to help you connect buyers with sellers. Building a qualified team who can quickly address any property-specific questions and concerns can be indispensable. “Rely on a network of professionals to assist you, including inspectors, contractors and engineers,” says Snyder.
Real estate agents use a variety of tools to market properties to potential buyers. In many cases, the marketing techniques are similar whether they are for standard or luxury properties. “In general, you have the same tools: professional photography, floor plans, details of the home, surveys, history of the property, videos and so forth,” says Snyder.
One difference is print advertising. “We do use more magazine advertising in the luxury market than other price points,” says Snyder. “That is generally because luxury homes have longer lead times and tend to have longer days on the market.”
Breaking into the highly competitive luxury real estate niche can be intimidating. Snyder says it’s important to be yourself and remember that you don’t have to be wealthy and well-connected to be successful in the luxury niche. “A person is not judged by the amount of money that they have in their checkbook,” says Snyder. “Some of the most genuine, giving and warmest people that I have had the pleasure of working with – and later became friends with – were luxury clients.”
Boning up is one of the best ways to avoid intimidation: Know every detail about the property, know the comps in the area, know the community and know your client. “Don't be intimidated; be prepared,” says Snyder. “Get to know what is important to that client: Is their pet their favorite child? Are schools important? What are their hobbies and things that are happening in their lives that are important to them?”
The Bottom Line
Building a career in the luxury real estate market can be emotionally and financially rewarding. If you're just learning the field, watch how your agency's most productive agents work with well-to-do clients Another route to mastering the luxury market is being hired on to the sales team of a highly successful luxury-market agent. You may end up staying with the team or moving on, but you will have learned from top people in the industry.
Successful agents to the ultra-rich focus on the details, become experts on each property and the surrounding communities, learn about each potential client and listen for – and quickly respond to – each client’s questions and concerns.