Working with a luxury buyer presents a very different experience than working with any other demographic. Those who are looking to purchase a high-end property are discerning and highly-informed — and expect their agent to be as well. As a result, the questions they ask are less about learning about a market’s livability and more about what the market can offer them for recreation and investment.
Success with luxury buyers depends on understanding this mindset firsthand by immersing yourself in their lifestyle, says Josi Van Horn, Broker Associate with Beacon Sotheby’s International Realty in Michigan. Doing so can give you an insider perspective that helps you understand the emotion, drive, and desire behind a buyer’s decision in an authentic way.
Once familiar with their frame of mind, you’ll be ready to address the common concerns of your high-net-worth clients.
“What makes this specific property the most desirable?”
Luxury buyers are often purchasing a home outside of their primary place of residence; for the ins and outs of the local market, they’ll turn to their agent. Be prepared to understand the features that are unique to your region. For Van Horn, whose market spans the shoreline of Lake Michigan, homes can vary greatly in desirability based on their position on the bluffs created by the local sand dunes. “The most desirable property is a no-bluff or no-stairs property,” she says. “People always want to talk about the difference between low-bluff and high-bluff.”
Often, your “bluff” equivalent is something only locals will know, which reinforces the importance of immersing yourself in the community. Van Horn grew up in her market, but she expanded her horizons by taking sailing lessons so that she could better speak to the nautical conditions of the region from experience. “It was the one thing on the water that I hadn’t tried,” she says. “Some of my clientele were talking about sailing. I decided to try it out so that when they’re speaking to me, I can be knowledgeable. I can say, ‘I sailed out of this harbor one time and it was really easy’.”
“What can the property earn?”
Unlike a general home buyer who is seeking a main home, luxury buyers generally own — or have owned — multiple properties. “They want to know the resale value, or the potential to rent the home out as an income property,” Van Horn says of her luxury clients, adding that the answer is dependent in her market on whether their property will be solely a vacation home or function more as a rental.
“If you don’t know what the rental market looks like, then make sure you are doing your research, even if it’s just pulling up VRBO and seeing what other homes in the market are renting for,” she adds. “Always make sure that you’re striving to learn and be on top of what’s happening in your marketplace.”
The lesson? While luxury buyers can connect emotionally to a home, they also view it from an investment perspective.
“How convenient is this location for travel?”
Another difference between luxury buyers and other clients is what they need to be close to. While the traditional buyer may want to be near schools or relatives, luxury buyers are often more concerned with the home’s proximity to the town center or the ability to walk or bike in for a coffee.
While you can expect to answer questions about local restaurants and shopping, travel is top-of-mind for the busy luxury buyer. Being able to identify the feeder markets near your listings can prepare you for questions before they come up in conversation, especially when it comes to specifics on commutes. “How far is South Haven from Indianapolis? From Chicago? It all comes back to the old adage: location, location, location,” says Van Horn. “Sometimes clients will have family members flying in and out of town to come and stay with them — it’s not necessarily something that you would get with a typical first-time home buyer.”
When in doubt, Van Horn suggests that agents reach out to their peers who work in similar markets to gain valuable feedback and advice. “This has been a really great tool for me,” she says of the Sotheby’s International Realty network. “It’s always good to have a sounding panel or someone you can go to with a frustration or a question. Just speaking with them can generate new ideas for how I can best connect with my buyers and sellers.”
To best answer the questions of the luxury buyer, it boils down to thinking like a local and networking like a global brand.
About Sotheby’s International Realty
Sotheby’s International Realty was founded in 1976 as a real estate service for discerning clients of Sotheby’s auction house. Today, the company’s global footprint spans 990 offices located in 72 countries and territories worldwide, including 43 company-owned brokerage offices in key metropolitan and resort markets. In February 2004, Realogy entered into a long-term strategic alliance with Sotheby’s, the operator of the auction house. The agreement provided for the licensing of the Sotheby’s International Realty name and the development of a franchise system. The franchise system is comprised of an affiliate network, where each office is independently owned and operated. Sotheby’s International Realty supports its affiliates and agents with a host of operational, marketing, recruiting, educational and business development resources. Affiliates and agents also benefit from an association with the venerable Sotheby’s auction house, established in 1744. For more information, visit www.sothebysrealty.com.
The affiliate network is operated by Sotheby’s International Realty Affiliates LLC, and the company owned brokerages are operated by Sotheby’s International Realty, Inc. Both entities are subsidiaries of Realogy Holdings Corp. (NYSE: RLGY) a global leader in real estate franchising and provider of real estate brokerage, relocation and settlement services. Sotheby’s International Realty Affiliates LLC and Sotheby’s International Realty Inc., both fully support the principles of the Fair Housing Act and the Equal Opportunity Act.