(This is Part 1 of a four-part series. See Part 2.)
While many agents sell estates, very few do business with those who are Fortune 100 executives, major movie stars, or self-made billionaires. Understanding what works in the ultra-high-end markets can help you be more effective no matter what price range of homes you sell.
My husband, Byron Van Arsdale, recently conducted a sales training for a high-end development team that sells $2 million to $5 million custom second homes. To prepare, Byron interviewed several agents who represent multi-million-dollar-earning second-home buyers and sellers. Several important points emerged that are instructive for all agents, no matter what price range they represent.
1.) Knowledge of the inventory is not enough
Most agents have a solid knowledge of what is currently for sale. Knowledge, however, is not enough when you are dealing with the ultra high-end. The first step in becoming an agent who represents the ultra-rich is to have a complete mastery of the inventory. This includes not only the inventory that you sell, but inventory that may compete with your properties in locations in other states as well. For example, if a buyer is considering building a multimillion-dollar home at a major ski resort, the agents need much more than just a grasp of their local inventory. For example, why should a buyer purchase in Deer Valley, Utah, rather than Aspen or Vail, Colo., Park City, Utah, or Lake Tahoe, Calif.? What advantages does your location offer as compared to purchasing in a different area? How are the price points different? How do the lifestyles differ? What facilities does the local airport provide for private jets? How crowded is the mountain during the winter and how busy are the golf courses during the summer? These issues go far beyond just knowing the comparable sales in a single area. Consequently, you must be a master of both the inventory as well as the lifestyle in your market area. You must be able to explain in detail the benefits of purchasing in your area as well as any disadvantages. For example, are there traffic issues that are not apparent on weekends? Do the streets flood in heavy rains? No matter what price range you represent, become a fountain of relevant information about not only the comparable sales, but also the area and the lifestyle.
2.) Privacy, Security and Trust
The multimillion-dollar second-home client is often obsessed with security. When a billionaire sells or buys a home, he or she has legitimate concerns about safety. Kidnapping is a nightmare most fear. Movie stars and other prominent celebrities not only have to cope with paparazzi trying to snap a cover shot for the tabloids, but they also have to worry about mentally disturbed stalkers as well. In addition to their personal safety, many have millions of dollars of art, jewels and other valuables in their homes. When they list their property, they don’t want a virtual tour. They don’t want people in their bedroom. They especially do not want pictures of their art or drawings of their floor plans posted to a public Web site. Rather than seeking maximum exposure to the market, they only want their property marketed privately through a trusted friend or through their private network in order to protect their privacy and safety. Because of this, they need an agent they can trust. The agents who represent these clients are usually very protective of their privacy.
I was always amused when agents would schedule an appointment to show one of my listings and I asked to register their client. Often the agent would say, “I have a celebrity client.” The “celebrity” usually had a minor role on a soap opera or was doing commercials. On the other hand, agents who did represent the truly rich and famous almost never disclosed their client’s name without considerable pressure. In fact, most gave the business manager’s name rather than that of the actual buyer.
The lesson here is that earning clients’ trust begins with honoring both their wishes and their privacy. Regardless of who your clients are, it’s important to treat them as human beings with real concerns and needs — not as some image that their public relations manager concocted. Furthermore, no matter what price range you represent, every single client deserves celebrity-quality service. You never know when that $100,000 condominium buyer has family that owns a huge estate.
Want to learn more about how to apply the best practices of the luxury market to your business? See next week’s article: “No More Referrals.”