Today I have learned a valuable lesson in luxury real estate. First when you think luxury, you probably think expensive cars, lots of money, big mansions and super expensive fashion clothes. Now that we got that down, let me show you what I learned about selling expensive mansions!
Depending on the area you live, you will probably come across homes that are considered luxury, or hight end. Before you say that you area does not have such homes, let me say that high-end is defined as 2 times the area average home price, and luxury is 3 times the area average. So if an area has homes selling for approx. $300k, a luxury hom will be $900k and above. (I got this rule of thumb from a real estate agent in Chicago.)
Here is the other things I learned that might suprise some of you:
1. You do not have to be wealthy to sale real estate!
TV shows and top producers in real estate tend to make you think that you have to drive a Mercedes or a luxury car to be able to sale luxury homes. Or that you have to live in a mansion in order to sale other mansions. I don't know about you, but when I have another professional help me I look at what he can do for me, not how much money he has in his bank account. Yes, his finacial success might show that he is doing something right, but that is not necessarily what you need. What every seller of luxury real estate needs is a great marketer and a great negotiator. At the end of the day he or she needs to expose your home to as many potential buyers as possible, and when the right buyer is found, to negotiate for you from start to finish.
2. An agent does not have to be a top producer or a expert in your area!
I assume that this might surprise you even more. But let's think about it. A top producer means that he sales a lot of homes, but ask yourself what kind of homes are those? Most of the time a lot of homes, means a lot of average price homes. Is a luxury home average price? Definitely not, it's actually 3 times the average home price in your area. Most sellers also assume that real estate is a local profession, that you need someone from the neigborhood to sale your home. Here I could debate again, that you do not need someone that is living in the area or expert in the area. It certainly helps, but at the end of the day you need someone that is familiar with the area, but that can market your home to buyer at your level. So instead of looking for expert in the area, look for someone that is a great marketer that has a good network of buyers for your price level. At the end of the day it does not matter how much an agent knows the area, but how many buyers he can bring to your home (qualified buyers).
3. The agent has to have years of experience to sale luxury real estate! NOT!!!
I hope I did not lose you by now. I will not be shocked if you start saying: "This is BS." Here is why years of experience might or might not help. In the industry most agents start as buyer agents, where they run around with buyers trying to find homes. This is very time consuming. As months or years pass, they move on to representing home sellers and list some of the homes. This is better as they leverage the time of other real estate agents. They just wait for other agents to bring buyers thru the door. With several other years passing by, the agents start to move on to higher price homes. So after let's say 5 to 10 years in business, our agent start to look in the high-end, luxury market. At this point, do you think he or she has the right experience and skillset to sale your home? NOT at all. Because his or her network is of average price home buyers and sellers, and his expertise. Now, if you have an agent that after a few months or let's say 2 years of selling real estate, starts to learn, network and cater to luxury buyers and sellers, and one day he call you regarding your home for sale, who would you pick? I already know my pick, and it is the one that can market the home, negotiate and put together a great deal for the client.
Alex Sirb is a residential real estate agent in Northern California/Sacramento area, focusing on high-end and luxury properties.
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