Ready to Break Into the Luxury Market?
07/31/2019
It is common for agents to be excited about the thought of increasing their sales price by selling very beautiful high-end and luxury homes. If you decide that luxury is something you want to break into, you need to start by identifying the slice of the market that makes sense for you to focus on. Invest the time now to ensure that your future investment of time and money will be well spent.
Become a Market Expert
Each market has their luxury price point and the price of a luxury home in Beverly Hills, California is drastically different than the price of a luxury home in Salt Lake City, Utah. You need to study the pocket markets and price points you are interested in to determine the following:- The percentage of turnover
- Average price range
- Average days on market
- The percentage of overall sales in your area which occur in that price point
- Who your major competitors will be
- What you will do to set yourself apart from the competition
- The best ways for you to break in and get invited to the table
- Where the buyers for this market come from
- Where the sellers move to, so you can be well prepared to help them with that next step
A Common Question: Should you give up your bread and butter business?
For most agents the answer is no. Keep working your normal price points that turn well and keep profit pouring in. Many agents budget 80% of their time and money for their bread and butter business, and 20% for their new luxury venture. Often agents have the strategy to just snag a few higher end listings per year to boost their sales volume. However, there are indeed some agents that come into the business and set their sights for luxury and are determined to make it the only niche they work. New agents entering the luxury market will often join a large successful team that is dominant in the local luxury market and use the power of the team’s brand to establish credibility and fast track their success in the market. The new agents who tend to go it alone will usually have deep ties in the community and gain success by leveraging their family, alumni, club memberships, and any and all other social connections to use as a springboard into the market.Knowledge is Critical
In addition to knowing the statistics and the trends, you should also know the architecture and other important details about the homes, the area, and the lifestyle. Remember, people buying luxury homes are not buying shelter – they are buying lifestyle and prestige and the image that goes along with it.Networking and Connections
In the luxury market, a lot of business is created through social connections. Top luxury agents often have a concierge approach to servicing their clients and work them graciously but aggressively for referrals. They are often involved in country clubs, charities, and the arts, and can be seen out and about town and hanging around with those whose income matches the homes that the agent sells.Prospecting
One of the best methods for those who are not fortunate enough to have built-in social connections, is to work expired listings. Working expired listings in the luxury price point can be a very practical way in for the following reasons:- Most luxury sellers overprice when they first list the home, so the second or third agent may find the sellers in a place where they are more motivated to price it right.
- Most agents are intimidated by the luxury price point and will not contact the expireds in the higher price points, and even agents who do service the high-end may not be aggressive enough to prospect the expireds. This leaves the door wide open for you.