Working with a client under pressure can result in its own set of unusual requirements and challenges. What do you need to know to navigate the exclusive market?
- When selling a house, whether it be famous or infamous, don’t leave money on the table, be sure to get everyone to sign and remember discretion is key.
Two of the biggest news days in the Trump-Russia investigation have turned on the activities and words of unlikely figures: the real estate agents of Paul Manafort and Michael Flynn.
In Manafort’s case, Alexandria-based agent Wayne Holland was called before a federal grand jury, presumably in relation to the condo he helped Manafort purchase in Northern Virginia, which was subsequently raided by the FBI.
In Flynn’s case, part of the motivation for cutting a deal with Mueller’s probe was reportedly his frustration at having to list his Alexandria home in order to fund his legal bills.
When the house failed to show up on the D.C.-area MLS, everyone wondered who had scored the listing for the desirable Old Town property and who would be the lucky (or unlucky) buyer.
You may think you know what it takes to be a real estate agent to the rich and famous — or infamous, as the case may be — especially if you’re a fan of Million Dollar Listing and its ilk.
But working with a client under pressure can result in its own set of unusual requirements and challenges. What do you need to know to navigate this exclusive market?
1. Don’t leave money on the table
According to elite brokers, one of the biggest issues agents may face is the impact that a scandal can have on the sale of a property — and on the resulting sales price.
Sotheby’s International Realty’s Nikki Field, who reps world-class luxury buildings like 212 Fifth Avenue, a condominium conversion by Madison Equities, offers the example of Ponzi schemer Bernie Madoff’s Upper East Side penthouse as an instance of scandal trumping comps.
“The Madoff co-op was very well-known. He was photographed and filmed standing right outside, and everyone knew the address. That desirable home didn’t sell for three years and then for only half of the value,” she said.
According to Field, “When they finally found their buyer, it was because to this individual, the stigma meant little compared to the deal.” Sellers and brokers may have to hold their nose and understand that they will pay a premium to get rid of a property associated with a scandal.
In the case of a co-op, of course, “the board had to approve the under-value sale, which they were happy to do to get rid of the publicity, the scandal, and get it sold,” Field added.
2. Make sure everyone signs on the dotted line
Think pre-qualifying your buyer is important on a standard home sale? Try selling a property in which a celebrity or other notable figure lives.
Vickey Barron of Corcoran Group, who leads sales and marketing for luxury NYC buildings including Soho Properties’ 45 Park Place, said that different brokers use different criteria to pre-qualify those who come in to view a celebrity home in person.
“For many agents, a personal relationship with the buyer broker is the most important criteria. Knowing that this is someone you trust who has a personal and professional relationship with the buyer is one of the most important ways of vetting,” she said.
There are, however, other things that may need to happen before someone is allowed to tour a celebrity or scandal-driven listing. Many buyer brokers pre-qualify by requesting extensive data and financial records from their clients.
In addition, sellers may require non-disclosure agreements and other documentation to ensure that what happens in their home stays there.
Field regards the preparation of the home for showing as one of the keys to ensuring secrecy.
“We try to keep the seller’s identity quiet by stripping the apartment of all personal items — photos, mail, awards — anything that could identify them to potential buyers,” she said.
She added that while some celebrity clients think the house is worth more because they own it, this is rarely true “unless it is a frantically rabid fan who will overpay” for the privilege of living where their favorite figure has.
3. Be discrete
The most important aspect of working with famous clients is “keeping them invisible,” in the words of Barron. This is why marketing is done almost exclusively through personal outreach to known and trusted brokers in the market.
According to Field, the wealthy today think of publicity much like your grandmother did.
“Most do not want anyone knowing they are selling, for a variety of reasons. To many, it’s gauche to talk about the money they have and the money they spend. This is a new era of quiet wealth,” she said.
Some clients have a lot of secrets to keep. Field says some are hiding their financial information from the government, shareholders, business partners and even their nearest and dearest.
“Some are buying multiple homes for multiple families. They don’t want the current wife knowing what they spent on the ex-wife’s house,” she said.
The upside for brokers in this super-elite group? Referrals here mean everything. When celebrity clients know you will keep their secrets, they tell their friends.
Discretion, according to Field, is “the vital element of today’s high-profile real estate sales.”