October is Luxury Month on Inman. Inman Handbooks offer deep dives on luxury marketing and agent branding, luxury staging, referrals, and more. We’re thinking about what luxury means now, examining how the pandemic is reshaping the needs of luxury buyers, and talking to top luxury agents, all month long.
Pulse is a recurring column where we ask for readers’ takes on varying topics in a weekly survey and report back with our findings.
Whether you’re a freshly minted agent or a seasoned professional, transitioning to a new career can be intimidating. However, it’s even more intimidating when said field is the highly coveted luxury real estate market.
Last week, we asked our readers to share their top tips on making it in the high-end sector. Where should agents start, and how should they cut their teeth in the luxury space? What are some of the skills they should focus on, and how can they build a robust database of clients?
In perusing your answers, one thing appeared to stand out — the value of trust. From suggestions on building a trustworthy brand to fostering honest and positive connections with clients, here are all the helpful pieces of advice you shared with us:
- [Know] the terminology and language of high-end finishes.
- Have friends and family who own luxury property and know the market.
- My No. 1 tip to breaking into luxury real estate is to be around that environment. Not just the environment itself, but the people as well. Networking is key in any industry, but especially in real estate. The more people you surround yourself with, the more you will be exposed to. Find a mentor or someone you aspire to be, and work with them.
Take notes of what they do, how they dress and how they interact with their clientele, and mimic it in your own special way — to create this luxury market of your own. The more networking and social events you attend and the more luxury open houses you stop by, the more you get accustomed to this environment and mindset. Feeling and looking confident is crucial, too. No one will hire an agent who’s not confident in this field. Show up, and be ready to give your absolute best.
A home is a huge purchase and investment — so, treat it as one. If you work with a team of agents, offer to host open houses or showings. This is a great way to meet clients, give your card out and make your own connections. You’ll have a better understanding of the homes, the market and what the clientele really wants and needs.
Remember that the clients always come first! This is what every agent needs to focus on — the client and the client’s needs. Whether you’re dealing with the luxury market or not, having a better understanding of exactly what your clients’ wants and needs are will help dramatically.
There should be no grey areas, and the more questions you ask your client, the more you will learn about them. It’s just simple conversation. Picking up the phone to check in and just say hi without talking business is also a nice gesture I do. People respect this. For instance, during the early onset of COVID-19, I checked in with many of my clients to make sure that they were OK and to find out if they needed anything. I can assure you — your clients will remember this.
Agents need to be confident in their field, and so, studying the market and knowing as much as you can will not only help you, but your client will trust you more when you speak in these terms. No matter what industry you’re in, communication is always key, but this really needs to be stressed in real estate.
I make sure I follow up by phone or email with my clients every step of the way. It’s important that they trust me and that their mind is at ease during the process.
The last piece of advice is to have a healthy mindset going into this. We all start somewhere, but going in with a positive mind and knowing you will do your best will really help during the process. Know that you can do this and that you’re worthy of your success and dreams.
- There are three simple steps to tap into the luxury sector. The first step is to differentiate yourself in this value-added industry. If you are just maintaining the status quo, why would anyone go out of their way to hire you? Whether it’s staging, landscaping, decluttering/organizing or social media, set yourself apart from other agents by offering specific knowledge, expertise or services. Don’t be ordinary — be extraordinary!
The second step is to own your tradecraft. This means knowing the ins and outs of every luxury listing in the area you plan to focus. Know why this house sold for this amount and why that house is still sitting on the market. If you exude knowledge, you will create confidence within the minds of prospective clients.
The third step? Don’t be a secret agent. So, now you’ve set yourself apart with a value proposition, and you’ve become the neighborhood expert. The final step is putting yourself out there. Think of it in terms of dating. You’ve gone to the gym for months to get in shape. You’ve been to the salon to get a new hairstyle and bought the latest trend in clothing. However, you’re not going to get a date unless you get out there and let the world see the new you!
For real estate, this means holding open houses in your target neighborhood, spending time at a local coffee shop chatting up the barista or at a local bar talking to the bartender about what you do. Often, locals like these can be your biggest advocate if you stay top-of-mind.
- Sign up for your local luxury meetings. Attend, and tour. Be willing to help out a luxury agent in your office, and watch how they operate. Join other luxury networking companies (for example, Luxuryrealestate.com), and go to the conferences.
- Luxury is a unique market — every inch of it! Start with one luxury neighborhood, and get to know it inside and out. Properties, homeowners, building codes, all of it. Get it front of the neighborhood and stay in front — not as an agent, but as a person.
Find a listing you can sit open (doesn’t work in every neighborhood), sit it every day and get to know everyone. Also, luxury buyers and sellers do not like know-it-alls. They like agents who can show them why, where, when and how! Be the neighborhood resource, the go-to person. Always be nice to neighbors, and stop to lend a hand. They will remember it!
- Understand that for many luxury buyers and sellers, these transactions are far less emotional and far more of a business transaction. Do not try to BS your way through with these clients. They can usually smell it from a mile away. Research, research, research — the market, the client, the builder, the area, the individual amenities, the competition, everything. Invest in the best photography, video, marketing materials, staging and more.
- Read “The Millionaire Next Door,” and quit judging people by how they dress.
- In order to sell luxury — you have to be luxury! You must be totally comfortable with wealthy sellers and not at all intimidated by the luxurious lifestyle. My experience is that sellers feel comfortable with brokers who know the people they know, who dress well, who have traveled where they’ve traveled, are on the same charitable committees and belong to the same clubs. Basically, understand their furnishings and art (even though these items are not for sale).
- The high-end seller feels comfortable with someone who understands them!
- Define “luxury” in your market. Make sure you look the part. Your clothes, car and everything else need to match the clientele you want to work with. Does your business card and logo match your brand? If you’re on a team or have a team, what about changing their title from buyer’s agent to sales partner?
Know your luxury market — average price, median days on market, cost. Take a luxury real estate seminar, advanced negotiation class or get a luxury real estate designation (Luxury Home Marketing Specialist). Write articles in the local paper or online about the most expensive home that sold in your area.
Sponsor or attend luxury events, polo, golf tournaments and car shows. Join a high-end networking group (composed of attorneys and financiers) with minimum income levels or a gourmet wine club. Go visit higher-end open houses. Analyze the listing agents’ marketing materials, their appearance and how they show the home.
Are your marketing and promotional pieces consistent with the clients you’re trying to attract? Join charity boards or start a philanthropic giving program. Have a goal to increase your average sales price by 20 percent, and then strategize what you need to do to achieve it. If you need to broaden your geographical area, envision what would need to happen. Do you need to open a satellite office or partner with another agent in that market?
- Understanding motivation. In luxury, people move for only one of two reasons — to or from.
- Nugget No. 1: Luxury is a lifestyle. You can dabble in luxury via your sphere, but truly breaking into luxury requires you to work and play in the same spaces those with wealth spend their time.
Nugget No. 2: Know the different categories of wealth. UHNWI are ultra high-net-worth individuals with investable assets of $30 million or more. HNWI are high-net-worth individuals with investable assets, excluding residences, collectables and consumables of over $1 million. HENRYs are high earners but not rich yet and are generally born between 1981 and 1996. These are the 73 million “kids” who are the up and comers, ultra spenders and easiest to identify.
Nugget No. 3: Luxury is in the details. Anticipate needs, and obsess about every detail — paper weight of letterhead, texture of business cards and the quality of your email signature. Every detail matters and gets noticed.
Nugget No. 4: Guys, know your watches — Chopard, Blancpain, Patek Philippe, etc.
Nugget No. 5: Ladies, know your shoes and handbags. Chanel, Hermes, Cartier, etc.
Nugget No. 6: Luxury is moving away from the opulent (think the plaza in NYC) to the understated, grounded and Zen. Look at the brand feel of the ultra-luxury Aman Resorts as an example of where luxury is now.
Nugget No. 7: Luxury is a global game. Build your network with other luxury agents. Jennifer Berman was instrumental in launching Inman’s Luxury Connect, and it’s still there place to be for the luxury real estate professionals each year.
Nugget No. 8: Be in the know. A newbie with deep market knowledge will trump the lazy experienced agent every time. You have to dedicate a portion of every week to R&D. You actually have to see the homes. Know the neighborhoods. Know who lives there and what they do. Know what companies they own. Luxury real estate is a shark tank, and the stakes are high. Knowledge is power.
Nugget No. 9: Build relationships around things you like to do. If you like golf, then get good at it, and build relationships there. You can apply the same to tennis, boating, cars, shopping, fine dining or drinks at the best bars in town.
- Gain your clients’ trust by being authentic. Luxury buyers and sellers want trustworthy agents who are dependable, knowledgeable and confident.
- Clients do business with agents they know, like and trust — and that is not different in the luxury industry. Agents who want to break into luxury need to see this as a long-term investment in the market segment and plan their strategy accordingly. Relationships need to be cultivated over time, and agents need to be very clear on the value they provide to the luxury consumer. Distinctive service and marketing plans are crucial.
Show the client how you will customize your service for them. Agents will need to position themselves as experts in this niche, and that should be across all channels, from your website to testimonials to your social profiles. It can also be powerful to partner with a brand with a distinct luxury presence.
- The luxury market is all about relationships. So it’s not so much that you can “break into” this segment of the market, but rather you’d need to pivot your actions in order to align with this market. Luxury clients see through gimmicks and slick marketing, and don’t want their listing to look like everything else that’s out there. A luxury client is impressed by solid analytics, proof of concept, ROI, structure and originality. So, make sure your business methodologies surround these facets of success as you work to build relationships within the luxury space.
- High-end video! Nothing shows off what you can do and how you present a home like high-end videos.
- Amazing client service overall, and mirroring their behavior and responding in kind. In a lot of real estate threads, I will see comments (memes actually) about people receiving faxes or being asked to send faxes. “What year is it?” being the general gist. Those comments probably held true in 2014, when the largest deal of my career (thus far, as I’m ever optimistic) started when the client asked me to send the initial offer to him for signature via fax. I did, and that got the ball rolling to an eight-figure sale that closed about two months later.
No one-trick pony here, I turned around and sold the house across the street in 2016. That was also an eight-figure beachfront sale. And the second deal started by sitting down in a café located at Nordstrom for the buyer to sign in person, which was her preference.
- It’s not a niche to just slide into by faking it until you make it. Our evolution into the world of luxury real estate was actually organic. As our real estate practice matured over the past three decades, so did the success of our clients. We evolved together into luxury real estate price points.
This niche also requires us to have the ability to put together a marketing budget for each of our homesellers. So one will need financial resources to properly be of service. Authenticity and making sure you’re focused on listening constantly to what the client’s needs are is critical. Well, that’s the truth for how we serve all of our clients.
What did we miss? Please share your thoughts in the comments section below.
Editor’s note: These responses were given anonymously and, therefore, are not attributed to anyone specifically. Responses were also edited for grammar and clarity. Inman doesn’t endorse any specific method and regulations may vary from state to state.