Real estate agents work in a variety of capacities. Some are generalists, while others focus their efforts on one particular niche. One of the most elite of those niches is the luxury property market. This market is often characterized by quality, refinement, and exclusivity. And although the definition may vary by market, one thing luxury properties have in common is the price tag. The average price for a luxury home in the United States ranges from $2.5 million in Los Angeles to $3.6 million in New York City, according to the 2018 edition of Luxury Defined: An Insight into the Luxury Residential Property Market, published by Christie’s International Real Estate.
Real estate agents who specialize in luxury real estate often deal with ultra-high-net-worth individuals (UHNWIs). These are people who have assets of $30 million or more. They're among the world's wealthiest individuals—a group that's fairly small, but one that continues to grow. But 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 broker or agent for the ultra-rich.
- Luxury real estate agents often deal with ultra-high-net-worth individuals—people who have assets of $30 million or more.
- In order to be a successful agent for these individuals, it's important to know the details of your properties and be an expert in the market.
- Build contacts by developing a sphere of influence and networking.
It’s All in the Details
One of the most important things that agents who deal with luxury real estate—or any realtor for that matter—can do for their clients is to pay attention to all the details. This includes key features of a property, location, amenities, and anything else that will help it sell. People who want luxury properties tend to want most of the same things everyone else does—a good neighborhood, access to shopping and community services—as well as some extra frills.
“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,” according to Vivien Snyder, a residential broker associate and certified luxury home marketing specialist with Beverly-Hanks & Associates Realtors. “Think of the last time you bought a car. (They) have full-color marketing books that talk about 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.”
Ultra-rich clients can be demanding—perhaps even more than other customers. One of the better ways that luxury real estate agents can 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 an essential way to keep your clients well-informed and happy.
Become an All-Around Expert
Do real estate agents themselves have to be wealthy and well-connected to find and work with ultra-rich clients? The answer to this question is simple. No.
"They do need to be experts in the market. They need to be able to talk intelligently on comparables," Snyder says. In order to be experts, these agents need to be familiar with the properties. This means seeing the homes that are for sale as well as any other inventory that has been 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,” she says. “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.”
Part of being an expert is knowing how to price properties and when to time the market—skills you'll be able to develop over time.
Develop a Sphere of Influence
One method many real estate agents, brokers, and realtors use to build contacts and generate leads is through a real estate sphere of influence strategy. This method focuses on generating leads through the people the agent already knows—family, friends, neighbors, classmates, business associates, and social connections.
Developing a sphere of influence becomes very important to agents working with the ultra-rich. Because most people 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 maintaining regular contact with them can make a big difference. People may not be searching for homes, but often make quick decisions when the right property comes along, according to Snyder.
Networking with other agents and professionals is also a good practice 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.
Become a Marketing Maven
Real estate agents use a variety of tools to market properties to potential buyers. In many cases, the marketing techniques are similar 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.
Print advertising is where luxury real estate stands out from any other part of the market. This is often used to advertise luxury properties more than any other price point in the market. You've probably flipped through at least one publication with a lot of high gloss photos of the stunning interiors and well-manicured landscaping of some of the world's most expensive homes. Snyder says this is because luxury homes tend to have longer lead times and stay on the market much longer than other forms of real
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,” she says. “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.