It takes knowledge, strategy and finesse Selling a million dollar-home in an expensive development or on acreage of its own is not the same as selling a fixer upper or a median or average-priced home. It takes a totally different strategy. In real estate, as in life, it’s always best to make a great first impression. Marketing and pricing of your home (in any price range) is critical from the start. If your house 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. The higher the original price, the greater the reduction needs to be to stay competitive.
Affluent buyers buy for completely different reasons than typical homebuyers. The higher you move up the home price ladder, the more important intangibles become. In other words, luxury homes are more about art than science. On a typical $100,000 home, the numbers drive the entire process. The buyer closely monitors the potential monthly mortgage amount, the utilities, the interest rate and closing costs. 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.
Of course, affluent homebuyers still pay attention to the numbers. They won’t allow themselves to get “ripped off.” But instead of being limited by a strict budget, affluent buyers generally make their buying decisions based on a completely different set of factors. They think in terms of $25,000 to $50,000 increments the same way an “average” buyer thinks of $5,000 increments.
You can’t entice them with $10,000-off discounts. They are much more concerned about finding the perfect home than they are a home with the perfect price. Luxury real estate has little to do with price. If an affluent buyer really wants a particular luxury home, they will pay almost anything for it. Affluent buyers won’t “overpay,” but they will pay more. Buyers of luxury homes (anything above $400,000) have a more nuanced understanding of “value.” Affluent buyers think of value not in terms of the cheapest price, but in return on investment. And when it comes to buying luxury homes, the “return” they are looking for is not necessarily financial. It is emotional. They want to feel good about their home. They want to be proud of it. Not that the average American doesn’t experience these desires. They just don’t always factor them into the home-buying decisions (or maybe can’t afford to). Selling high-end homes is not about finding buyers. Here are a few tips on how to find THE buyer:
High-end photography is a must. You must hire a professional photographer who uses a wide-angle lens. Yes, it could cost a lot of money. But if you are working with an agent that doesn’t invest a few hundred bucks into professional photos on a listing that may generate a potential commission of $25,000, you should probably find a new agent.
In the property description, make sure your agent does NOT just describe the features of the home, but tells a story about the benefits of owning it, why the characteristics are desirable, and how the buyer’s life will improve once they purchase the home.
Create targeted buzz so everyone is talking about your house. What should a real estate agent do to make that happen?
1.Hopefully, he or she doesn’t just “hang out” for two hours on a Sunday, hoping potential buyers show up. Turn a luxury-home open house into a premiere social event that gets people talking, like a “Charity Cocktail Party” with live music and food that also raises funds for a worthy cause. The more people that attend your “open house,” the better. Word-of-mouth is the goal.
2.Creative direct mail drums up interest. It creates buzz, and can tell a story about why the owners are selling, what a great opportunity it is, or why the home is unique. Don’t focus on boring things like price, number of bedrooms and so on. The goal is to create an exciting mailer that piques people’s interest, even if they aren’t currently looking for a new home. You want them to tell their friends at coffee about that “interesting letter” they received in the mail.
3. Online marketing with beautiful photos, even aerial photos and video posted of your home, reaches people far and wide. Include a professionally written description of the property, and a way for interested buyers to contact your agent to find out more information. There is a certain amount of prestige with the aerial images and video, and prestige is very important when it comes to high-end homes.
4. International marketing is very important on a luxury listing. In the luxury price range, buyers don’t always come from the local market. It’s important to have a realtor that has a great network of realtors around the United States and abroad.
If you’re listing your home with a realtor, make sure he or she has a web site that is current and up to date. Most buyers start looking online months before they reach out to an agent.
1126 Wings Rd
St. Albans, MO 63073
Tracy Ellis is a real estate agent with RE/MAX EDGE, with offices in Chesterfield and Weldon Spring, Missouri. She hosts the Tracy Ellis Show at 10 a.m., Sunday mornings on 97.1 FM News Talk, and is the publisher of the Tracy Ellis, A Guide to Luxury Real Estate magazine. For more information, visit www.TracyEllis.com, or call (636) 299-3702.