It sounds obvious, the typical advertising used to sell an average- priced home will not work when marketing a million dollar home. Many real-estate agents mistakenly believe that all they need to do is spend a little more money to promote a “luxury” listing. They’ll keep the actual advertising more or less the same, simply buy more ads, or buy larger ads – It’s not that simple!
This isn’t an issue of math where you simply adjust the marketing budget to fit the listing price. Yes, a real-estate agent will need to invest more money promoting your luxury home. That’s a given. Some real-estate agents fail to invest enough and, or make the wrong kind of marketing investments.
It’s not as easy as taking the marketing expense on a “normal” listing and adding a few zeros. In order to sell your luxury home for top dollar in a reasonable amount of time, don’t settle for the same old marketing techniques. You will need a completely different strategy.
Effective marketing of luxury homes requires a completely different approach. It demands an entirely new way of thinking. In real estate as in life, it’s always in your best interest to make a great first impression. Marketing and pricing is critical from the start! When a listing sits on the market for more than a few months, it begins to develop a reputation…. and not a good one.
When buyers and their agents find a listing that’s been on the market for a long time, they usually throw out lowball offers. And I can’t blame them – it’s a fair assumption that if another buyer hasn’t been willing to buy it at the current price, why should they? This creates a vicious cycle.
It’s even worse for sellers of luxury listings, because instead of resorting to a price cut of $5,000 or $10,000, they often need to trim the listing price by $50,000 or even $100,000. In fact, on high-end homes that have sat on the market for too long, I’ve seen price reductions much greater than $100,000! The higher the original price, the greater the reduction needs to be to stay competitive.
Affluent buyers that can afford high-end homes think differently. They buy for completely different reasons than a typical homebuyer. Most homebuyers are concerned with details like utility bills and monthly mortgage payments. The luxury buyer does not care as much about these things, if at all. Intangibles might become more important to a buyer as they move up the listing price ladder. In other words, luxury homes are more about art than science. On a typical $100,000 starter home, “the numbers” drive the entire process. The buyer closely monitors the potential monthly mortgage amount, the utilities, the interest rate, closing cost, etc. They are very much concerned with the “science” of the deal. They are restricted by the numbers….their budget is the main driver of the process. This is not true of luxury buyers.
Now, of course, affluent homebuyers still pay attention to the numbers. They won’t allow themselves to get “ripped off” and overpay for a home. That’s how they got to be successful in the first place – they are wise-stewards of money. Instead of being limited by a strict budget, affluent buyers generally make their buying decisions based on a completely different set of factors. Everyone makes decisions emotionally, but affluent buyers can usually afford to ignore logic. And when I use the term “logic,” I mean it in a strictly financial sense.
Affluent buyers looking at million dollar homes think in terms of $25,000 to $50,000 increments the same way an “average” buyer thinks of $5,000 increments. For example, a first time homebuyer might splurge an extra $5,000 to buy a home at the top of their budget if they really fall in love with it. An affluent buyer doesn’t even flinch at an amount like $5,000. To them “splurging” would mean buying something $50,000 over their arbitrary “budget.” Or even $100,000 over.
This is why “regular” marketing strategies don’t work with affluent buyers. You can’t entice them with hypothetical $10,000 off discounts. They simply don’t care about small amounts of money. Affluent buyers are much more concerned about finding the perfect home than a home with the perfect price.
To be blunt, luxury real estate has little to do with price. If an affluent buyer really, truly, wants a particular luxury home, they will pay almost anything for it. They want the perfect home, not the perfect price.
Affluent buyers are ruthlessly efficient in their businesses and careers so they don’t have to be when it comes to buying a home. They won’t “overpay,” but they will pay more. Buyers of luxury homes have a more nuanced understanding of “value.” Currently, in our market area (Missouri), I would classify a luxury home as anything above $400,000 depending on the area. Affluent buyers think of value not in terms of the cheapest price but in return on their investment. And when it comes to buying luxury homes, the “return” they are looking for is not financial. It is emotional. They want to feel good about their home. They want to be proud of it. Not that all buyers don’t experience these desires – they don’t always factor them into their home buying decisions. In a literal sense, they generally can’t afford to purchase “everything” they desire in a home.
From a purely marketing perspective, selling high-end homes is not about finding buyers. It’s about finding a buyer, finding the buyer. Now that I’ve talked about who might be in-the-market for a luxury home, I’d like to discuss how I would develop a custom plan to market your luxury home listing.
The client is key to designing and developing an individual customized-marking strategy! Here are a few specific strategies that I discuss as part of the marketing plan with my luxury-listing clients.
Use High-end photography.
It’s a must. At lower price points, real-estate agents can get away with taking their own pictures. The cameras on cellphones now are better than the digital cameras of just a few years ago. I see some real estate agents taking property photos on their phones these days. This is unacceptable on a luxury listing. Insist on a professional photographer to take the pictures or someone who has experience in professional photography. Rethink working with a real-estate agent who doesn’t realize the importance of photography in real estate. Make sure the photographer uses a wide-angle lens and is up-to-date with the technology needed in today’s photography.
Highlight your property.
Instead of writing a simple property description, it should tell a story about the benefits. This is absolutely crucial when it comes to marketing luxury listings. Benefits sell a luxury listing, not features! Features are the desirable characteristics of a property. Benefits take it one step further and describe why the characteristics are desirable in the first place. Specifically, they describe how the buyer’s life will improve once they purchase the home.
Create targeted buzz.
Get some word-of-mouth going about your listing! This can be done in a multitude of ways. Invite potential buyers to see your luxury listing. Of course, I can’t list all my marketing strategies, here are a few that have been part of my past clients’ marketing plans.
Plan Social/Charitable Events.
Instead of hoping buyers show up to a 2-hour open house on a Sunday, turn a luxury listing “open house” into a premiere social/charitable event that gets people talking! I recently held a “Charity Cocktail Party” at my listing located in a gated community. I held the event on a Saturday evening and many companies donated items. We raised over $2,000 that night for The Missouri Military Memorial Foundation. It was a great event with live music, and food. We had about 75 people in attendance.
Social/Charitable events like this added as part of your marketing plan would include inviting as many people to attend as possible, not just the relatively few affluent buyers that are currently shopping for a new home. The event should be planned as a special and fun evening, NOT an open house. The more people who attend your “event,” the better. Word-of-mouth is the goal! The event would not be promoted to the general public… Special invitations only… because it will be a Special Event for those who attend!
Depending on your marketing plan, you might not be interested in a “large” group event. This can be tweaked to fit your needs. The idea is to “invite” people to view your luxury listing.
Use Creative Direct Mail.
Again, the purpose of sending out direct mail is NOT to find a buyer. Very rarely, if ever, will someone get a promotional letter in their mailbox…and decide to buy a million dollar home. Instead, the purpose of the mailer for your luxury listing will be to drum up interest in the listing. Create some buzz! I’ll tell a story about what a great opportunity it is to own the property and why your luxury home is unique, etc.! I will not focus on boring things like price, number of bedrooms and so on. The goal is to create an exciting mailer that peaks the people in the targeted-markets’ interest… even if they aren’t currently looking for a new home. That is one reason why I created my new magazine, “Tracy Ellis, A Guide To Buying and Selling Luxury Real Estate.” You want them to tell their friends at coffee about that “interesting letter” they received in the mail or even about an amazing home that was featured in my magazine. Remember, when it comes to marketing a high-end luxury listing, our focus will not be on finding buyers… it’s on finding THE buyer. There is someone out there that is a perfect match. My job as a real-estate agent is to do whatever it takes to generate positive buzz and word of mouth in the community so affluent buyers know about your luxury listing…even if they aren’t looking to buy a new home! All it takes is one person to mention it to a friend who IS looking.
Promote with On-line Marketing.
These days it seems like EVERYONE is online. Especially on Social Media! Most real-estate agents upload their listings to the MLS, and maybe aggregate them on a few of the online directories. I take it one step further with my new RC helicopter for aerial photos and video. Potential buyers can see an amazing aerial video of your home and everything looks even better from the air. It will include a professionally written description of the property, and a way for interested buyers to contact me to find out more information. There is a certain amount of prestige with the aerial images and video. Prestige is very important when it comes to high-end homes. I also use Facebook and other social media to promote my listings. I don’t just post a link to the listing, I have a unique way of marketing my homes on social media. I also actively promote the listing with paid advertisements that my target market will see in their “newsfeed.” Facebook has a very robust advertising platform that some real-estate agents completely ignore! It allows you to target very specific demographics of people. I can’t think of a good reason why you would not use social media to promote your luxury listings. I also use Instagram, Pinterest, Linkedin, Twitter and SoundCloud.
Communicate with Media Marketing.
It’s very important to make sure all media marketing is user-friendly and up-to-date. Technology is changing quickly and web sites must be mobile friendly. I have several of my own web sites along with my page on FM NEWS TALK 97.1 with a direct link to tracyellis.com. I also promote my listings on my weekly radio show and offer tips to consumers for buying and selling real estate.