By Elizabeth SanFilippo
Turning the Love of Real Estate from a Hobby into a Business
Kristine Farra of Gold Coast Real Estate loves shopping for condos the way some women love shopping for shoes. But Farra may be the only Chicago agent who started as a part-time dentist before making the move in 2000 to sell luxury properties full-time.
With contacts already established in the real estate industry, thanks to her architect brother-in-law, friends and meeting people from checking out properties for fun, the career move was relatively seamless. After all, she’d studied the market out of sheer enjoyment since she moved to Chicago in 1989. Today, she continues to study the market, because, as she believes, in order to be successful in real estate, “Know your client. Know your market. And utilize all available market resources, including maintaining a strong web presence.”
Her first clients included friends and colleagues, and her network grew from marketing and referrals. From the beginning, she’s been a luxury agent; her first sale was a $1 million new construction condominium. She attributes her first sale – and others – to working with architects and interior designers early on to create a “long-term vision of the space.” That involves setting up the home with decor, a creative aspect of the job that Farra loves.
That’s not to say the luxury business is without challenges. While a $20 million sale is her highest-priced listing ever sold, the highest listing she represents is a $25 million Burr Ridge mansion. But that listing is currently on hold due to flooding while under control of the lender, who is currently in the process of calculating cost estimates and depreciating the price.
“Know your client. Know your market. And utilize all available market resources, including maintaining a strong web presence.”
— Kristine Farra
A flood in a mansion is a very specific challenge, however, there are other challenges to keep in mind with the luxury market in general. “While luxury buyers are less affected by financing challenges,” she says, “there remains a fine balance between ‘wish list’ versus value. All properties, including luxury residential, continue to be extremely price-sensitive. Knowledge of market conditions is key with any misstep in pricing and exposure only delaying market time.”
She also admits that, while accustomed to a smaller pool of buyers since the downturn, the luxury market is stable. As proof, she cites the National Association of Realtors’ finding that luxury residential properties under contract actually increased by 3.9 percent in February 2011.
With that in mind, Farra remains quite busy. She’s currently selling everything, from a $211,000 property to a first-time homebuyer to a $20 million home, which is presently under contract.
Like many real estate agents, Farra typically spends her days coordinating showings, touching base with other agents, marketing, planning, real estate shopping, and, of course, networking with friends, agents and clients. And Farra recommends to any agent, whether moving from a different profession, like dentistry, or looking to realign their real estate business, “the personal connection is key to establishing a long-term relationship with our clientele and obtaining lasting success,” she says. “Clients are working with us based on receptiveness to their needs. Their timeframe. Their expectations. They are looking for guidance and direction regarding realistic market expectations.”
Building a Luxury Real Estate Business Through Referrals
At 22 years old, Genna Hill, now of @properties, sold her first property for $200,000. Hill recently represented that client again, but this time, she sold him a million-dollar home.
It’s because of Hill’s background with return clients, such as her first, that Hill has no qualms serving a client looking to spend or sell less. “Lower price points shouldn’t disqualify buyers,” Hill said. Case in point: Hill just sold a $200,000 property to a business owner who is about to take his company national. He’s already said, “I know I’m going to buy up very shortly,” and he’ll be hiring her for the transaction.
Hill plays it smart in other ways, too. She’s defined herself as a resource in the area, and not just through her new book, “2011 Chicago Northside Realty Guide.” Colleagues also call to ask her questions about financing options, which are different for luxury buyers. As Hill says, “They know I keep my ear to the ground in our industry.”
While most of Hill’s business comes through referrals, that isn’t to say she’s not marketing. Her belief in the power of advertising, something she does every day, is no surprise, considering her first luxury sale was with a client who bought in Bucktown in 2001; that client learned about her through a postcard direct mail campaign. Since then, “that owner referred me to other luxury people and developers,” Hill says.
“They know I keep my ear to the ground in our industry.”
— Genna Hill
Working in luxury, Hill admits, can be demanding, but she loves the business. Hill believes the demands of luxury clientele are often not unreasonable; they just want quality. Granted, she’s come across her share of unreasonable demands, but Hill has her boundaries. For example, if a potential client makes it clear they’re buying multiple million-dollar homes and should be treated as such, Hill doesn’t work with them.
Overall, Hill finds luxury buyers less demanding than first-time homebuyers, who don’t have the full education on buying a home. After all, luxury buyers have been there, done that with buying/selling before and understand the process. And if a client tries negotiating her commission? “I just say no. There’s so much more power in saying no.”
With 15 contracts with developments valued at $1 million, Hill can afford to say no. Last year, she won an award for selling $42 million worth of volume. While she attributes that volume to having a lot of clients, many of them purchased homes in the $1.5 to $2 million range. She also sold her highest priced home ever, a transaction valued at $3.3 million, to a repeat client who bought their first home for only $150,000.
It’s no surprise that Hill still currently represents three buyers looking at houses listed for $200,000. After all, one day those buyers plan on buying up – and Hill will be there when they do.