- Luxury homebuyers are valuable clients because they tend to buy more than one home.
- You can appeal to luxury buyer and seller sensibilities by investing your own time or money into working with them.
- The wealthy appreciate confidentiality when it comes to real estate transactions.
Josh Altman — the Beverly Hills Douglas Elliman agent known for his appearances on “Million Dollar Listing Los Angeles” — has a favorite Starbucks that he frequents in Los Angeles.
Not because it is near his office or he likes the coffee, but because it’s where all the movers-and-shakers go.
“You can choose to be lucky,” said the agent who has sold more than $1.5 billion in residential real estate and currently has over $300,000,000 in listings.
He remembers one day, just as his coffee was ready, a well-known celebrity joined the queue, so he threw out his beverage and joined the line again. He began chatting with the celeb — who, it turned out, was looking for a house but was having no luck. He described what he was looking for, and Altman had just seen a place he thought would appeal.
“I said, ‘If you come with me to hang out at this house, I will pay you $1,000,'” said Altman, speaking at today’s Luxury Connect 2015 conference.
The movie star had earned $50 million the previous year, so what was $1,000 to him? But Altman threw it in to show the star he was earnest.
It worked. The celeb dutifully came along with him, loved the house — and bought it for $12 million.
The message from the sold-out Luxury Connect 2015, held at the Beverly Hills hotel? Luxury homebuyers are not like any others, but when you develop relationships with them, it can be extremely rewarding.
They are highly discerning, they are decisive, and they have teams or entourages who take over running the purchase from quite early on. But, as Altman discovered, they still buy their coffee at their local Starbucks.
Selling dream homes
Rayni Romito Williams of Williams & Williams touched on the importance of not talking clients into buying something they don’t really love. This can end badly for agents in litigious L.A.
Happily, in her experience, when luxury buyers go up in price for their dream home, they really go up in price.
A client from New York came to Williams with a $6 million budget for a home in L.A. and a set list of requirements. He didn’t like anything she showed him at that budget, so she took him to see a house at close to $15 million, and it was love at first sight.
“He is still in the house, and it would probably sell for $35 million now,” she said. So he has no complaints.
She has learned that a client is never upset if they buy their dream home.
‘How can I help you get things done?’
And as sellers, those in the upper echelons can be quite influential in a transaction. Rupert Murdoch said to his agent, Dolly Lenz of Dolly Lenz Real Estate, “How can I help you get things done?” she told the Luxury Connect audience.
“He is the most wonderful client,” said the agent, who regularly does buying and selling for the Murdoch family.
And it’s a well-known fact the rich are getting richer, added Lenz. Asset inflation is going up beyond real estate, she said.
“If your stock market portfolio was worth $100 million, now it’s worth $200 million, that’s driving things,” she said.
People feel wealthier, so they are happy to pay a bit more for a property they want, she added.
The behavior of the high-net-worth individual can be quirky. Secretive is not the word. Some of them should work for the CIA.
Seattle agent Tere Foster, Premier Executive Director for the luxury program at Windermere, was approached by an attorney in San Francisco about a house in Seattle. It turned out the buyer was an existing client of hers, but he didn’t want her to know. Word got out, of course.
“This is how under-the-radar it is in Seattle,” she said.
Before you even look at a property, in many cases, all parties have to sign a confidentiality agreement, she added.
When you sell a high-net-worth individual a home, the transaction might not be the end of the relationship because they are buying more across the country. The beauty of serving a wealthy clientele is they tend to collect houses.
“We are in the markets that our clients are in,” said Dottie Herman, President and Chief Executive Officer of Douglas Elliman, New York’s largest residential brokerage. “We are in the markets our clients have their second and third homes in, in places like Aspen, Florida and recently, L.A.”
High-end houses simply have more, according to design experts Sue Firestone, chair of SFA Design, and Brett Baer of Meredith Baer Home. And the homes of the wealthy are increasingly replicating hotels they stay in, complete with gyms, spas (or “procedure rooms”) and ballrooms.
“As designers, we are becoming more like stylists; clients are much more worldly and well-traveled,” said Firestone. She has seen more requests for private museums in people’s homes.
“They want a hotel experience, but also a local experience,” added Baer.
There is another trend, which is good news for Realtors: “They will buy the house next door and use it as a guest house,” said Firestone.
Outdoor showers that remind people of their honeymoon in Bali are another current trend — in L.A., at least. The wealthy are also interested in how healthy their home is, favoring features such as water recycling and solar systems.
Staging for success
If you are staging a luxury home, think “more” again. Ever had to rent a Porsche or a Lamborghini to put in your client’s garage for an open home? This is par for the course in Beverly Hills, according to Rayni Williams. Business partner and husband, Brandon Williams, went to a department store to pick up a setting of Roberto Cavalli china to help sell a home recently.
But some of the fundamentals stay the same.
Penta-millionaires, ($5 million plus) in a recent survey said what they wanted most in their agent was customer service, responsiveness and a solid brand, according to Coldwell Banker Regional Vice President Beth Styne.
Not so different after all.