Luxury Insights

5 Tips for Selecting the Right Luxury Real Estate Agent

You've made the decision to buy or sell a luxury home, and now it's time to select the real estate professional who can best assist you. Not all good agents operate effectively in the upper-tier market. It is a market segment that requires special competencies. Here are some general guidelines for choosing an agent to help you in the upper-tier residential marketplace:

1. Look for market knowledge and real estate skills.
   Not only should your agent know the city or area you are interested in, he or she should be knowledgeable about the price range you've targeted. A luxury home expert should be able to discuss the amount of inventory available, the average number of days a property is on the market before going under contract, the number of sales in the last 90 days, and the list to sales price ratio, all by price range.  The more knowledgeable the agent is about the upper-tier market, the more valuable he or she can be as a resource for you. When you schedule your first meeting with a prospective agent, let the agent know you want an overview of the market conditions based on price range. A solid track record of success is also a clear indicator of market savvy. Don't choose an agent based on country club membership, the kind of car he or she drives, or similar criteria. Do choose your agent based on the answer to the question, "Does this agent have the skills and resources necessary to help me accomplish my real estate goals?"
2. Notice special luxury affiliations and designations and ask what they mean.
   To zero in on professionals who specialize in the fine homes and estates market, look at an agent's memberships and designations.   Some agents are members of organizations specific to the luxury market such as The Institute for Luxury Home Marketing, which awards an international designation (Certified Luxury Home Marketing Specialist or "CLHMS") to agents who meet education requirements and have a track record of success.  Some real estate companies offer special recognition to their associates who work successfully in the luxury market.  Some firms have special luxury marketing programs available to their agents.  All these memberships, affiliations and credentials add credibility.
3. If you are selling, ask that the listing presentation include a specific marketing plan for your property.
   Don't assume that the best marketing plan is always the most expensive. Listen to why the agent has included each element of the plan. Be sure that your home will be promoted Online as well as in more traditional ways. If the home is very expensive or the buyer is likely to come from outside the area, a luxury home magazine may be an important part of the plan. Recognize that the marketing plan in a fast-moving sellers' market will differ from the plan to be implemented in a slower buyers' market. Your agent should outline his or her proposed plan and explain it. Look at the quality of the marketing pieces the agent has used in the past as part of your evaluation process. Some agents will have access to special luxury home marketing systems with special marketing pieces that add value to their toolkit.
4. If you are selling, don't let an agent "buy" your business.
   Choosing an agent based on the highest suggested list price is counterproductive if the house is overpriced. The agent doesn't set the price-the marketplace does. If your home goes on the market as an overpriced listing, agents and their prospects will quickly move on to other properties that offer more value relative to cost. Will they come back if the price goes down? In many cases, no.
5. Rapport and clear communication are important.
   Buying and selling can be stressful. Choosing an agent with whom you communicate clearly will help simplify the process. Be sure he or she understands your needs and expectations and that you understand the process and the agent's expectations of you. In short, specialized knowledge + quality tools + clear communication = an agent who can deliver the results you want in the luxury home arena.

Quick ideas for building international business

If you're interested in beginning to target the international homebuyer, here are some quick tips to start the process. 

1. Do your homework – define your targets.
Research who is coming to your market.  Start by identifying foreign companies in your area.  Check tourism records to see where foreign visitors are coming from. This is often an indication of the countries represented by foreign buyers.  Meet the staff at the Economic Development Authority and Chamber of Commerce and learn about their foreign initiatives

2. Research the countries you decide to target.
Identify their real estate business practices. Research their homes and lifestyles. Learn about their culture.

3. Plug into local groups which have an international orientation.
Connect with foreign embassies, foreign chambers, and local trade mission groups.

4.  Find and use the many NAR resources available.
Take the Certified International Property Specialist (CIPS) Training.
Learn what ICREA offers (go to www.Realtor.org).
Put relevant listings on World Properties.com (it’s free through Realtor.com's enhanced listings).
View the International market PowerPoint presentations on Realtor.org

5.  Go to International Real Estate Expos.
Find a list of events in the membership section of The Institute's Website.

6. Go on foreign trade missions.

7. Join The International Real Estate Federation (www.FIABCI-USA.com).  As an Institute member, you'll save the application fee of $250!  You will still have to pay FIABCI dues.

8. Network, network, network with other luxury agents in the US and abroad.

9. Develop relationships with international resort property developers.

      

IAR Interviews Laurie at the International Real Estate Expo

At the recent International Real Estate Expo in Chicago, Stephanie from the Illinois Association of Realtors sat down to talk to Laurie about working in the luxury market, and what it takes to be successful. 

More on Mendelsohn

Here's a link to more information on the latest Ipsos Mendelsohn Affluent Survey, including a summary brochure, Powerpoint charts & graphs of study findings, and more... 

Note that Ipsos Mendelsohn President Bob Shullman will be discussing the findings next month at our Leaders in Luxury event in South Beach.  If you haven't received an invitation and would like to attend, please let us know.

New research says wealthy are high tech

The 19% of American adult heads of households who earn $100,000 or more are heavy users of technology.  The statistics below highlight their computer and Internet use and clearly demonstrate that as wealth goes up, so does Internet use.  Where will you find the affluent?  Online.  Agents who work in the luxury market must be promoting themselves and their properties Online and communicating via e-mail. 

• 98% of those earning at least $100,000  have a computer at home
• 90% communicate via email
• 88% buy goods and services Online
• 58% use their cell phone to go Online
• 30% read blogs
• 9% write a blog
• On average, they spend more time Online than they spend watching television
• They spend 23.4 hours every week Online
• Those who earn $250,000 or more spend even  more time Online -- 27.4 hours weekly! 

These affluent consumers are using the Internet to research the real estate market, screen listings, and look at agent qualifications.  Is the technology in your toolbox adequate for capturing affluent prospects and delivering the service they expect?

This data from The Mendelsohn Affluent Survey (September 2008) takes on even more importance in the context of new research from the California Association of Realtors who reported this week in their 2008 "Survey of California Home Buyers,"  that 78 percent of all home buyers used the Internet "as an important part of (their) home buying and selection process," compared to 72 percent in 2007. Internet use is an increasingly important tool in the homebuying and selling process, a tool you must use effectively.

Copywriting tips for selling your listings

In a soft market, the quality of your property marketing is key to your success.
There are tried and true advertising rules which are based on real results.  Most real estate professionals have never heard these rules (many ad agency types haven’t either).  Implement these rules well and your luxury properties will be the ones that sell in today’s challenging marketplace.  Forget what you think you know about advertising and try what really works.

Rule #1.  Good long copy outsells good short copy every time.  Can this be true?  Absolutely.  But the corollary is that if your copy is bad or mediocre (most real estate copy), then keep it short and put the reader out of his misery.  Two examples of long ads that worked:   A 6,450-word advertisement for Merrill Lynch generated 10,000 responses.  An 8000-word ad for Mercedes increased US sales from 10,000 cars a year to 40,000 sales annually.  The right story with the right benefits will sell.  People will read long copy if it is meaningful to them.  If you have a product which everyone recognizes and understands the benefits of, you may be able to get away with short copy.  But, do you have a single listing about which the consumer is totally informed?  No.  This means telling the complete story of each listing is necessary.

Rule #2.   Use the Principle of Sacrifice. Know who you it is you are trying to sell, ignore anyone else.  Stan Barron of Stan Barron Properties in Austin (TX) calls this rule “The Principle of Sacrifice.”   He says that you should sacrifice anyone who isn’t a real prospect for a particular property (as defined by the property’s characteristics) and reach out only to someone who is.  For instance, if a home has no backyard or is on a busy street, you have to find the short list of prospects for whom these features are reasons to buy.  Attracting a prospect who wants a big backyard or a quiet cul de sac won’t do you any good.  However, the headline “Backyard removed for your convenience” may attract the buyer who wants to avoid spending time or money on yard maintenance.  A luxury home on a busy street might benefit from a headline which says, “This home and its location leave no doubt about your success.”   After all, when everybody in town drives by this home daily, the owner will have plenty of visibility!

Rule #3.   Your headline must be a grabber!   The headline has to grab attention and make the targeted reader want to know more.  Five times (5X) more people will read your headline than will read the body copy.  Never waste your headline by making it the property address.  The goal of the headline is to grab attention and make the reader want to read the subhead, both must be compelling.  The goal of the subhead  is to make you want to keep reading.  In other words, you have to make your headline and subhead pull the reader through your copy. 

Rule #4.   Every home has a story, tell it.  If your copy could be used with any number of homes, scrap it and try again.   Your copy should be specific to your listing.

Rule #5.  Format matters.   Here are just three things to keep in mind which will help ensure your ads are read.  Never, never, never use all capital letters.  ALL CAPITALS ARE VERY HARD TO READ AND YOUR READER WILL OFTEN GIVE UP AND MOVE ON TO READ SOMETHING THAT IS LESS WORK. Make sure your copy is at least 10-point type. When type is too small, readers don’t bother.  Avoid white letters on a black background  -- this is called reverse type -- unless the type is large and clearly readable.  In publications, ads which look like articles are read five times more often than ads which look like ads.   

Rule #6.  Use as many good photos as possible without sacrificing copy.  More good photos will result in faster sales.  According to research done by the National Association of Realtors, using six photos instead of one, sells a home 43% faster.  When possible, use an explanatory cutline under each photo. Be sure the photographs illustrate the most important benefits of the property and help you tell the home’s story.

Rule #7.  Ignore the “naysayers.”  Share these rules with your friends and associates and they’ll say, “Oh, that can’t be true.”  Ignore them.  Decades of advertising research and sales results say they are wrong.   Instead, tell the unique story of each property – what is it that makes this property different?   Recognize that a “negative” may be the very reason someone chooses this home.   Try to grab the reader with your headline and subhead.  Don’t be afraid of long copy, but use a format that makes it easy to read.  Support your copy with multiple professional photographs. 

Do all this well and watch your listings sell.   These rules work!