The luxury housing market may attract agents who see the opportunity to sell beautiful homes and work with a sophisticated clientele while earning high-dollar commissions. But breaking into this specialty market takes hard work and research, along with the ability to tailor your strategy for each listing. Carrie McCormick of @properties says the needs of the clients buying such homes are not drastically different from those of buyers at lower price points.
“You are selling a lifestyle,” she says. “You have to have more creativity in presentation of value and negotiating a price. Know which features are most important to specific buyers. Know your clients and what drives them.”
Anne Stromayer of Baird & Warner believes that some agents hesitate to enter the luxury market because they’re intimidated by the wealth of the clientele or may have preconceptions that luxury buyers are more demanding or difficult to work with. While the clientele may demand and expect excellence, they also want to be treated in a down-to-earth manner.
“I think a lot of the agents think that when you work in a luxury market, they’re difficult people to work with or they’re very demanding or not nice,” Stromayer says. “They couldn’t be more nice. They expect exceptional service, but I think they want to be treated as if they’re just a normal, regular person. They have the same concerns and the same issues, questions about schools and kids and areas and amenities. There’s no need to be afraid of them.”
McCormick, who has been selling in the Chicago market for 19 years, finds value in following several approaches to finding the homes. Leveraging targeted ads on social media, networking through contacts and hosting events at her listings have all helped her succeed. She also partners with designers and tradespeople who have the skills to help her clients create the space they want.
“Luxury buyers are looking beyond premium finishes and focusing on homes that fit their lifestyle,” McCormick says. “Being able to sell the vision of the luxury lifestyle is a hard-earned and an irreplaceable skill.”
Mark Icuss of CONLON/Christie’s International Real Estate entered the luxury market gradually after starting out as an agent in 1999. “Over time, I began interacting with higher-net-worth people,” Icuss says. “As I gained more experience, it allowed me to confidently operate in the luxury side of the market.”
Icuss decided to specialize in luxury sales after realizing that most successful people value expertise and are willing to pay for it. “You have to be a expert in your market and a full-time professional,” Icuss says. “Successful people expect the best and won’t settle for anything less. A fancy Instagram page and gimmicky sales tactics will be seen through very quickly.”
Stromayer was working for a firm with a robust relocation sales side when she first started in the luxury market. “As the opportunities came up for people who were willing to tackle luxury markets in our North Shore areas, I actually jumped on that and thought, why not?” she says. “It seemed like it was going to be interesting. It would be different. Why not get the experience, make more money and try?”
Stromayer’s first sale was such a success that she decided to make luxury homes a specialty. “Everything was very smooth,” she says. “It was a home that was very well-built and had everything they wanted, so that helped. And they were nice. That’s what made it easy and fun and enjoyable. It all worked out.”
Traits for success
The luxury market might be far less intimidating than some agents believe. That doesn’t mean it’s for everyone. “Luxury properties require a much higher level of sophistication from both the agent and the marketing approach,” Icuss says.
Stromayer agrees that agents need a touch of refinement or finesse, whether it’s in the way they speak, how they dress or what they drive. She also recommends patience.
“Things don’t happen quickly,” Stromayer says. “Decisions take longer. The process might take longer. People have money and may know what they want, but maybe they don’t know what they want. You have to spend time with them and you have to be patient. You just have to stick with them.”
McCormick stresses the importance of tenacity. Purchasing a luxury home is a major financial commitment. Agents have to be willing to commit to putting in the time it takes to find the right property and to offer any input that can help clients envision themselves in a particular home.
Agents should also be conscious of the amount of time a luxury buyer can commit to the search and be prepared to weed out poor fits themselves.
“Know the market inside and out,” McCormick advises. “High-end buyers don’t have time to search the web for homes and rank them in order. They rely on the expertise of an experienced agent to understand what they want and bring them to the best homes that fit their needs.”
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Selling new construction
Icuss has worked extensively in new construction and feels that patience is key in dealing with new homes. Agents have to be willing and able to serve clients with their expertise and offer advice on matters such as floor plans, finishes, locations, costs and construction techniques. The pricing margins are razor thin on new construction, and agents have very little room to make mistakes. They have to be confident that they’ve set the right price to attract buyers without losing money.
“Site visits, architecture, contractor and designer meetings are all weekly occurrences,” he says. “You also have to be willing to put in a ton of work up front. It’s not uncommon to work on a project for 16-plus months prior to closing. My partner and I have been working on our Hayden West Loop project for close to three years, and it won’t be done until later this year.”
For Stromayer, the key to successfully selling new construction luxury homes is facilitating relationships between her clients and builders.
“If you can set up meetings where the client is there and the builder is there and you have that personal connection, the builder can get a sense of the personality of the buyer and really figure out what the buyer wants and needs,” Stromayer says. “There’s more of a rapport. You don’t have that with existing houses where the house is already finished. It is what it is, and you either like it or you don’t.”
With a clientele ready to demand excellence, agents specializing in luxury housing have to be prepared to employ the right marketing strategy to reach discerning buyers.
Both buyers and sellers must overcome misconceptions about the market to seal a deal. According to Icuss, buyers are often too willing to trust information found on online portals such as Zillow. Conversely, sellers may place too much emphasis on comps and expect their property to sell at the same levels as others in the same market, regardless of any similarities between them or lack thereof. They often believe that buyers will overpay.
“The thing that matters most is correct pricing,” Icuss says. “There is never a market for overpriced housing.”
McCormick’s approach goes back to selling the concept of luxury housing as much as the property itself. She uses tools such as sleek videos, crisp photography and staging to help tell the story of a home, but buyers may view its amenities as secondary.
“Buyers are not drawn to a home solely for the home itself,” she says. “The location and the home’s surroundings determine the lifestyle they are able to live there.”
More information and detail is often involved in marketing luxury homes, according to Stromayer. Marketing strategies are adapted on a case-by-case basis, depending on factors like the state of the luxury market and each home’s unique attributes. Marketing budgets for luxury homes are significantly bigger than for other properties, as more photos and videos are used to draw the right buyer.
“It’s a lot more fine-tuning, I think, when you’re dealing with the luxury market,” Stromayer says. “There are details you don’t want to miss and you want to make sure you get those out there.”