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February 2014

It's a Shark Tank out there...will your property pitch get the home sold?

Here's a short radio interview with Jules Peiri, founder and CEO of The Grommet and business pitch expert:  

 

In a nutshell: Jules Peiri has heard more pitches than any of us.  She knows what makes a good one.

She visits Harvard twice a month to hear pitches from MBAs.  According to her, 90% of them make the same mistake: Not getting the basic point across quickly or clearly enough

Guess what?  
Most real estate agents are making this same mistake!

Her advice in a nutshell: Find a simple analogy that communicates the essence of your business and, "Use it right up front and repeat it many times."

Selling a home is very much like pitching a business idea.  
The key is to effectively communicate:

  • What you're offering
  • How it is unique and better
  • How it benefits your targeted audience (and you need to know your targeted audience!)

While real estate professionals may not  be "'pitching" the home to venture capitalists or reality TV show panels, an agent's marketing materials are essentially a pitch.  

Your HEADLINE is often the first and best opportunity to get your point across quickly.  Whatever you do, DO NOT waste it on the address.  

The only exception to this would be an address that itself tells a compelling story, like "1600 Pennsylvania Ave." or "15 Central Park West."  

 Use your headline to provide as much information to your targeted prospects as you can.  For example, how about an amazing home that is "too much" for the neighborhood?

  SexyiestHomeInAustin

 "Central Austin: Sexiest home in town. Priced Accordingly" tells a potential buyer a lot more about the property than, "1105 W. 31st St." doesn't it? It also begins to position the property effectively too.  Let's look at what's communicated with this headline:

  • "Central Austin" - The location/neighborhood. Obviously key criteria for a prospect.  It is not as specific as the address, but it doesn't have to be to be meaningful.  Remember, the full address can be provided anywhere in the piece. Don't waste the headline opportunity on it!  
  • "Sexiest home in town." - This is a real attention getter, and a strong claim to be making. With a headline like this, you know that there will be nothing average or typical about this property.  The property is likely to be an over-the-top, "show" home.  This statement WILL alienate some folks--those who are not likely to be real buyers of a home like this--and that's actually part of the reason for using it.  They are not prospects.  You don't want to waste their time or yours.  You want to reach the targeted prospects whose lifestyles match the property and will respond positively to this language.
  • "Priced Accordingly" - It's the sexiest and it has a price to match.  This tells us that this is an expensive home, probably more expensive than most or all of the other homes in the neighborhood.  If you like sexy and expensive, this will have your attention for sure.  If you don't like sexy and expensive, move along,  you are not going to buy this house anyway, regardless of price.   

8 words.  Look at how much has been communicated.  With this simple headline, we have a real sense of the home's "personality" and the personality of the likely buyer!  

Remember Pieri's advice? 
Find a simple analogy that communicates the essence of your business and, "Use it right up front and repeat it many times." 

This headline does exactly that.


Small Changes, Big Impact

12 Easy Decorating Tips

House Beautiful offers some quick staging ideas on their website. They call these ideas quick decorating ideas you can do in a day.  While you are most likely working with a professional stager to bring your luxury homes to maximum marketability, these easy staging ideas may spark some good ideas to share with your stager, or use yourself on less expensive listings (or at home!).  Take a look on the House Beautiful website and be inspired. 


Downton Abbey? Not Quite.

New-York-TimesWhile the words "butler" and "household staff" might evoke visions of the post-Edwardian world of Downton Abbey, the reality of today's household staffs is really quite different.  

Increasingly, "The New Domestics " are corporate warrior types and graduate degreed specialists, quietly relocated to the private residences of the world's billionaires and UHNWIs.  

"On the West Coast, the 50-something chief of staff for a young billionaire has a master’s in divinity from an Ivy League university and more than a decade of experience working for an East Coast billionaire... He describes his job, which pays in the mid-six figures, as “managing the managers,” the scope of which includes the oversight of the private staff in the family office, along with estate managers, housekeepers and nannies — more than 40 in all, all of whom enjoy a lush benefits package, including a 401(k) plan that is competitive with any you would find in the corporate world."
- from The New York Times, "The New Domestics."

Check out the full article in last week's New York Times for a peek into this often hidden world.

 As a professional whose clients are the affluent, think about how they prefer to structure their lives, manage their time and resources, and what level of skill and expertise they expect from their staff and their vendors.

Do you and your staff measure up?


Real Estate Portals - What Does the Future Hold?

 

(Video: "Power Portal Partnerships" from Inman Real Estate Connect)

Zillow, Truila, and Realtor.com are the top 3 real estate "portals" on the web, currently accounting for about a third of all visits.  Looking ahead, these three big players are likely to be major forces in shaping the experiences that real estate consumers have online.  From the agent and brokerage perspective, they are key channels for reaching real estate consumers online.  Collectively, their offerings to real estate professionals will be important forces in molding business and online marketing practices.  

While this isn't luxury specific, the video above is an interesting peek into the thinking and personalities behind these major players, and offers some insights as to the likely direction of things to come.  

A few of the themes and ideas put forth:

  • User experience (consumer and agent)
  • Integration (connecting systems and data to make life easier and leverage value)
  • Power of  online video 
  • Embracing technology/change with small steps (don't wait for systemic change)
  • Richer content (floorplans, neighborhood and lifestyle info, video, etc.)
  • Innovation via user interface ("glanceable UI" - wonky code words for simplicity, gestures, visual information)
  • Reaching SELLERS via the portal
  • Refining lead generation with data-based insights

Worth a quick watch if you're thinking about online strategy for your business or keeping your eye on industry/technology trends.


World’s Ultra Wealthy Hold a Fifth of Their Wealth In Real Estate Assets

If you are interested in the Ultra-High-Net-Worth Individuals and haven't yet seen the latest WealthX/UBS "Billionaire's Census 2013," this press release and video is a must see:

 

London/Singapore, 15 January, 2014 – Private wealth is increasingly shaping the world’s real estate markets and the use of private equity in major property deals worth at least US$10 million has nearly trebled since 2009.

Real estate now accounts for around a fifth of the invested wealth of the nearly 200,000 ultra high net worth individuals (UHNWIs) in the world, according to new analysis from international real estate advisor, Savills, in association with Wealth-X, the world’s leading UHNW intelligence provider.

In Around The World In Dollars And Cents published today, Savills estimates that the total value of the world’s real estate is now around US$180 trillion, some 72 per cent of which is owner occupied residential property. Of the US$70 trillion that is ‘investable’ and therefore traded regularly – including US$20 trillion of commercial property – over half is being bought by private individuals, companies and organisations. Investing institutions, listed companies and publicly owned entities are becoming relatively less important to world real estate as a result.

Around 3 per cent, or US$5.3 trillion, of the world’s total real estate value is owned by UHNWIs. This wealthiest 0.003 per cent of the world’s population has real estate holdings which are worth an average of US$26.5 million each.

“Global real estate is mostly residential and held by occupiers, but private owners are becoming more important in the world of traded investable property,” says Yolande Barnes, head of Savills world research. “Since the ‘North Atlantic debt crisis’ of 2008, sovereign wealth funds, wealth management companies, private banks and family offices have stepped into the property deals that corporate bankers have deserted.

She added that: “In the world’s leading cities, the willingness of private wealth to take the place of debt finance or to take a higher-risk development position is now making the difference between deals done or schemes mothballed.” Savills estimates that around 35 per cent (or 6,200) of global big ticket (>US$10m) deals in 2012 were only possible because of private funding.

Mykolas D. Rambus, CEO of Wealth-X, confirms the growing importance of private wealth: “We forecast that the UHNW population will grow by 22 per cent by 2018, its combined wealth – currently US$27.8 trillion – is expected to total over US$36 trillion by 2018. This presents huge opportunities for those involved in global real estate investment to create the right product in the right locations.”

Table

The firm has also analysed the way private money moves around the real estate world and found that the majority (92%) of investments are within the ‘home’ global region. North America stands out as uniquely domestic, with 99 per cent of all UHNWI investment coming from US citizens themselves.

Meanwhile, mature and emerging nations have seen much more cross-border inward investment. Just under half (44%) of UHNWI investors in Africa and two-thirds (66%) in Latin America are from outside the home region.

European real estate markets are the largest and most international, having attracted the most global inward investment, relative to size, with London the standout global destination for private inward real estate investment from virtually every corner of the globe.

“In recent years there has been a tendency for UHNWIs to focus on ‘safe haven’, trophy properties for capital growth and wealth preservation”, says Barnes. “In future, we anticipate that some will begin to seek more productive, long-term income-producing positions.

“UHNWIs will be competing more directly with institutional investors in future but, being more opportunistic and less constrained by formal criteria, are more likely to become pathfinders and pioneers than corporate investors are.”

For further information, please contact:
Yolande Barnes, Savills World Research +44 (0)20 7409 8899 / +44 (0)7967 555501
Sue Laming, Savills press office: +44 (0)20 7016 3802 / +44 (0)7946 635866
Fauzi Ahmad, Wealth-X +65-86536514

About Savills
Savills is a leading global real estate service provider listed on the London Stock Exchange. The company, established in 1855, has a rich heritage with unrivalled growth. It is a company that leads rather than follows and now has over 500 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East.

About Wealth-X
Wealth-X is the definitive source of intelligence on the ultra wealthy with the world’s largest collection of curated research on ultra high net worth (UHNW) individuals, defined as those with net assets of US$30 million and above. Headquartered in Singapore, it has 12 offices on five continents. (www.wealthx.com)

Press Release Source: 
http://www.wealthx.com/articles/2014/world%E2%80%99s-ultra-wealthy-hold-a-fifth-of-their-wealth-in-real-estate-assets/


The Luxury Segment Continues to Outperform

"The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.  

Marie_Antoinette

So says The New York Times in yesterday's Business Day article: "The Middle Class Is Steadily Eroding. Just Ask the Business World."

In a nutshell: Income inequality is deepening. Affluent consumers are spending more and driving the economic engine. From restaurants to retail, appliances to casinos, the "high-end" is where the action is and it is largely driving what growth there is in the economy.

"The current recovery has been driven almost entirely by the upper crust...about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income."

Throughout the downturn, the luxury segment was the "good news" story in real estate and in most markets, it continues to be the dominant segment driving the post-recession recovery.

While growing income inequality is most surely an unwelcome reality for this country, savvy agents are positioning themselves to capitalize on these trends and effectively serve the most active and profitable segments of the market, which in many places, continues to be luxury.