Even with the enormous disruption that the pandemic has caused to international travel, luxury real estate is an increasingly global business, with some of the biggest seven-figure sales in New York and Los Angeles frequently coming from buyers who were used to traveling between continents and spending only brief periods of time in any one city.
In his new book “Global Luxury Real Estate: The Secrets To Selling Properties to the Ultra Rich,” Coldwell Banker France & Monaco CEO Laurent Demeure discusses why becoming an agent to the wealthy one percent really means mastering a global market. Often loyal to their preferred agents, luxury buyers will expect them to know markets in major cities like New York, Paris, Tokyo and London simultaneously.
“Even given the situation with COVID-19, most of my clients are buying real estate all over the globe,” Demeure told Inman. “They’re in the U.S., they’re in Europe, they’re in Asia. With the internet, people can work from everywhere and our situation is global. We started locally but luxury real estate is now a truly global business.”
Inman asked Demeure for his tips on working across borders — both now, when travel is severely limited due to the pandemic, and in the pent-up demand that is sure to come in the recovery period.
Inman: Why is it important for agents working in luxury real estate to have an international outlook?
Demeure: Real estate is becoming more and more global. Even given the situation with COVID-19, most of my clients are buying real estate all over the globe. In the 1960s, being a successful entrepreneur [in France] meant that you had your apartment in Paris, a second home in the countryside and a summer home on the seaside. It was all in the same country. Nowadays, wealthy people have properties in different countries and travel the world. They’re in the U.S., they’re in Europe, they’re in Asia. With the internet, people can work from everywhere. Our situation is global. We started locally but luxury real estate is now a truly global business.
But the pandemic has made all of that much more difficult, even for people with multiple passports and very large funds. You’re confident that it will rebound?
Yes. It’s much more difficult now but I have some clients who are waiting for me to go to the U.S. because they want to buy in the U.S. They want to buy in the U.S. because the dollar is weak at the moment and if you have been planning to buy properties [in euros] you have a 20 to 25 percent discount. It is a very good bargain at the moment for them because we can borrow money in Europe at 0.7 percent and many are waiting for authorization to travel so that they can buy properties at those lower rates.
Sometimes we try to sell online but that works better when there is very, very little inventory and when you know the market very well. I just tried, for example, to buy some apartments for a client in Boston [sight-unseen] but it is difficult to form a true opinion on a place online. If a client has a real need to buy, for example if he is coming to Manhattan in a few weeks and needs a place to live in Manhattan, he will buy online. If it’s an investment and they’re not in a rush, most will prefer to wait and travel.
Give us some of your tips for working in multiple markets and with clients from other countries.
My first piece of advice is to be mindful of cultural differences. Never forget that. The vast majority of agents believe that everybody knows the system in their country. But when you buy outside your country, it’s much more challenging. The system is different. Mortgages are different, the buying process is different. In Manhattan, you need to know the difference between a co-op and a condo. In London, you need to know the differences between freehold and leasehold. For most of the apartments in the city, you do not own the land because it is owned by the Queen. In Paris there are specific areas that have very strict disclosure laws about things like noise and overhead flights. A good agent needs to stay informed of all that.
Another major point is to never assume that your wealthy client does not have a spending limit. It is quite the opposite since many affluent clients are very cognizant of the market, know exactly how much they want to spend and want very good value for their money. Many think that because they are a luxury agent and work in luxury, they can sell their clients anything. But you need to bring value and actually have some closings before you can say that.
How can agents move beyond their local market and have a truly global outlook on luxury?
Education and information is key. When you talk to clients from different countries, they expect you to know their country. We have to talk about Moscow, we have to talk about London, we have to talk about Miami and so on. Every day in the morning, I start by reading the news in different countries. French news, British news, Russian news and sometimes Italian news, just to have a vision of everywhere and understand the different concerns and issues. For example, there was a big fire in St. Petersburg, Russia, last week and that can impact the market because some of our clients come from there. You have to know that. If you don’t know the situation in your clients’ country, you are not sure whether they can work, travel or buy at the moment. My advice to agents is to keep learning every day. You have to learn languages, you have to listen to the news in different countries.
Most agents stay local and don’t think outside their community but the rest of the world is outside their community, in fact.