This summer we’re looking at the state of the luxury agent and broker in today’s increasingly complex real estate market. In October, we’ll gather in Beverly Hills at Luxury Connect to share best practices, network and create a blueprint for the luxury agent/broker of tomorrow. Don’t miss it.
Knowing the cultural buying codes for various countries is an absolute must for every real estate agent who serves the ultra-luxury market.
Part 1 of this series introduced Clotaire Rapaille’s and Jurgen Klaric’s work on luxury anchors; Rapaille’s book, The Culture Code, identifies key anchors for Americans.
Here are some other codes based on buyers’ culture:
America: Big is better when you’re afraid
According to Rapaille, American society is fear-based, which is why it’s extremely important for us to feel safe, secure and dominant — and being bigger and more powerful plays a huge role in creating those feelings.
Americans like “big,” especially when it comes to our refrigerators, cars and garages. We super size almost everything — even our vehicles. Driving a big SUV, for instance, makes people feel safe and dominant, especially when they’re able to look down at the many smaller vehicles surrounding them.
Americans are also obsessed with avoiding illness. Rapaille explained a key cultural difference between the French and Americans:
Americans found a French commercial, where a woman sniffed and poked the cheese to determine if it was ready to eat, to be disgusting. Instead, Americans want their cheese “dead.” They pasteurize it, wrap it up in plastic, and put it in the morgue (i.e. their refrigerator) where it may sit for weeks.
Because the French buy their food fresh daily, having a large refrigerator is unnecessary. In contrast, Americans prefer to shop weekly and, consequently, require more space.
Hispanics: The American dream
According to Klaric, what matters most to Hispanic buyers is having both immediate and extended family nearby. In fact, if you look at the “ideal” Hispanic family, it’s a two-parent family where mom stays home and cares for the kids. The family engages in activities together and can count on other family members to pitch in when needed.
Klaric’s research showed that this is an important part of the “code” for Hispanic luxury buyers. Many opt to be in a less desirable area provided it’s close to their community.
If you represent Hispanic luxury buyers, emphasize the community and show them how they can become integrated into the community’s social life. Unlike Americans, who will commute long distances to have a large house in the suburbs, Hispanic buyers are willing to compromise on property features to be closer to their loved ones and to be active in their local community.
Europeans: Location and quality matter
European buyers have always played a pivotal role in the U.S. luxury market. They are willing to pay a premium price for premium properties, and according to Klaric, many of them will not haggle over prices, provided they feel the property has the status, location and quality they seek.
Europeans also tend to be very private about what they do. In America, we ask, “What do you do for a living?” Europeans find this question to be rude.
There are also country and class differences when it comes to what Europeans consider luxurious.
For example, in England, riding and hunting matter more than having numerous amenities. Because of this, members of the aristocracy live in castles or estates that lack updated heating and plumbing. In contrast, it’s the upper-middle class who own the modern properties.
Italians are especially interested in owning beautiful art. Aesthetics are more important than size. If you go to Rome, you’ll see plenty of men wearing Armani suits riding Vespas or even driving buses. Most Americans would opt for a car rather than the pricey clothes.
A consistent pattern among European luxury buyers is that they will use the internet to research properties prior to coming to the states to see the property. If the property meets their expectations, they might fly over, put cash down and be prepared to close within days.
Russians: The most expensive and luxurious
Russian presence in the ultra-high-end market is less pronounced than it was several years ago. Nevertheless, the Russian buying code hasn’t changed.
Whether it’s in New York or London, the goal of ultra-wealthy Russian buyers is to purchase the most expensive and the most luxurious homes in the country.
Frank McKinney, America’s “top luxury spec builder,” describes how he handles Russian buyers who come to the U.S. to view his $20 to $30 million homes:
The chauffeured driven Bentley limousine must be waiting at the airport. A representative from Cartier must be available so that the buyers’ ‘traveling companions’ can do some shopping while they’re here. The house must be turnkey, right down to the gold-plated toothbrushes. The buyers must feel assured that they are purchasing the crème-de-la-crème of all properties.
India and Asia: Education first
Many of today’s new billionaires are in their 20s and 30s and came to the U.S. from the Far East. Buyers from India want the best possible schools for their children. They may purchase a large property to accommodate a large extended family. They tend to dress simply and not display their wealth.
In contrast, one of my former clients from Hong Kong explained the Chinese approach to purchasing luxury property.
Our homes must reflect harmony, but they are also a way to display our wealth and success. A man’s level of success is judged by the home he provides for his family as well as the jewelry and clothes that he provides for his wife.
Education is held in high esteem throughout the Far East. Consequently, schools and the prestige of the area are critical.
Whether your luxury clients are American or from outside the U.S., understanding the culture codes of today’s luxury client is a cornerstone of building a successful luxury real estate business.
To read part 1 of this series, click here.
Thinking of bringing your team to Luxury Connect? There are special onsite perks and discounts when you buy those tickets together too. Just contact us to find out more.
Bernice Ross, President and CEO of BrokerageUP (brokerageup.com) and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.