Selling High End Real Estate

« « Every Homeowner Should Know the Timeline for Foreclosure | New York Real Estate Market » »

Thursday, October 16th, 2008 Subscribe To Our Feed

The high-end real estate market is apparently the only part of the industry that is untouched by the recent slowdown in the market, and the housing slump that has a grip on many parts of the country.

Real estate that priced into the millions is usually impervious to market fluctuations for many reasons. Those that can afford these properties are not usually affected by the same economic conditions as others, and of course these properties are in high demand, while making up such a small part of the real estate offerings every year.

The business of high-end real estate is booming. Research shows that it’s grown by at least 33% every year since 2001.

With so few options from which to choose, and the increase in demand, you might think that such high-end properties simply sell themselves, but this isn’t always the case. When selling high-end real estate, whether commercial or residential, there are some specifics that one should keep in mind.

Making – and Keeping – Contacts

Many real estate agents who work with high-end properties and customers keep a database of potential buyers and sellers, and work on assembling and maintaining it over years. Simply putting a sign in a lawn of a Beverly Hills mansion or the window of a Manhattan penthouse isn’t going to draw in the buyers. Contact must be made with potential buyers; agents need to be proactive about making that contact.

And of course, those contacts should be kept over the years. No name or address gets thrown out, no phone number deleted. Just because a potential buyer isn’t in the market today doesn’t mean they won’t be looking next year; a property that you’ve had your eye on to list may go on the market at any time.

Presentation

High-end buyers are used to slick marketing campaigns that look and feel good – and expensive. One real estate broker specializing in multi-million dollar homes reports that it’s not unusual for her to spend $20,000 on marketing on property, including over $300 an hour for a photographer.

Buyers of high-end properties are always looking for that “wow” factor, and expect to see it right away. Simply stating that a home or property has such-and-such marble or a fountain isn’t enough; these things need to be presented in a way that’s obvious from the first glance.

Many of the multi-million dollar homes are called “trophies,” and are expected to have the same glitz and glamour as any other trophies one might keep. After all, no one really reads the inscription on an Oscar statue, they simply recognize it by sight. Trophy homes are no different – they must appeal to the eye first and foremost.

Whatever sets your high-end real estate apart from the rest – fountains, gardens, Japanese ponds, tennis courts, pools, anything – make sure that it’s visually obvious from the very first moment.

Top of the line takes time.

Patience is key when selling high-end real estate. After all, most millionaires aren’t worried about quickly putting a roof over their heads. Chances are they already have a home, and yes, they want to move up or trade up, but they’re able to wait for just the right home, just the right location, just the right set of amenities.

Additionally, the best homes available don’t become available regularly the way middle income homes do. For example, one realtor had kept an eye on an apartment owned by the Rockefellers for many years, until it finally became available after a death in the Rockefeller family.

It’s unfortunate to think of things that way, but often the multi-million dollar homes are ones that are passed on from generation to generation. It often takes a life-changing event for it to go on the market. Wanting to represent homes that are only top of the line requires an inordinate amount of patience and waiting.

Additionally, selling these properties once they’re available also takes time and patience. Many millionaires and those able to afford these homes didn’t get that way by being impetuous, and so are willing to always wait and consider every option they have. And again, they’re not usually in a rush to buy a home to move their family in.

High-end buyers often see homes and property as an investment, and so often need to weigh many, many factors before they buy. Surrounding property values, shifts in industry, all of these things are looked at very carefully by the high-end purchaser. Middle-road purchasers typically need to live near where they work and usually only factor in the home’s size, neighborhood, and affordability. And again, people in this situation may need to move rather quickly.

For multi-million dollar homes, purchases are only the beginning. The costs for renovations, security, staff, and the maintenance of the lawns, gardens, pool, gyms, and any other amenities can also run into the millions – not to mention the tax bill they get also. Their decision of whether or not to buy is going to hinge on a lot more than simply the mortgage payment or nearby school system.

It can be done!

The beauty of dealing in high-end real estate is that many transactions are cash deals, so once you do get a buyer interested in a property, there’s usually no wait for pre-approvals, applications, and the like. Those that are interested in properties are very serious about their purchases, so it’s unlikely that a deal with fall through because the buyer backs out or because of some other issue on their end.

Additionally, the commission on high-end real estate transactions can make it a very lucrative field. Five percent commission, not an unusual amount in high-end real estate, on a $10 million dollar home is $500,000 – one deal every year can support a very nice lifestyle.

So if you’re considering high-end real estate as a personal career choice or are looking to sell your own multi-million dollar home or property, keep these thoughts in mind when it comes to your potential buyers and sellers, and you’re sure to have success.

Like this post? Publish It On Your Own Blog

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.