It is common for agents to be excited about the thought of increasing their sales price by selling very beautiful high-end and luxury homes. If you decide that luxury is something you want to break into, you need to start by identifying the slice of the market that makes sense for you to focus on. Invest the time now to ensure that your future investment of time and money will be well spent.
Become a Market Expert
Each market has their luxury price point and the price of a luxury home in Beverly Hills, California is drastically different than the price of a luxury home in Salt Lake City, Utah. You need to study the pocket markets and price points you are interested in to determine the following:
- The percentage of turnover
- Average price range
- Average days on market
- The percentage of overall sales in your area which occur in that price point
- Who your major competitors will be
- What you will do to set yourself apart from the competition
- The best ways for you to break in and get invited to the table
- Where the buyers for this market come from
- Where the sellers move to, so you can be well prepared to help them with that next step
Once you choose the market you want to work you will want to see every new listing. Check the trends and sales data monthly so that you sound like an expert even before you have an established track record.
A Common Question: Should you give up your bread and butter business?
For most agents the answer is no. Keep working your normal price points that turn well and keep profit pouring in. Many agents budget 80% of their time and money for their bread and butter business, and 20% for their new luxury venture. Often agents have the strategy to just snag a few higher end listings per year to boost their sales volume.
However, there are indeed some agents that come into the business and set their sights for luxury and are determined to make it the only niche they work. New agents entering the luxury market will often join a large successful team that is dominant in the local luxury market and use the power of the team’s brand to establish credibility and fast track their success in the market.
The new agents who tend to go it alone will usually have deep ties in the community and gain success by leveraging their family, alumni, club memberships, and any and all other social connections to use as a springboard into the market.
Knowledge is Critical
In addition to knowing the statistics and the trends, you should also know the architecture and other important details about the homes, the area, and the lifestyle. Remember, people buying luxury homes are not buying shelter – they are buying lifestyle and prestige and the image that goes along with it.
Networking and Connections
In the luxury market, a lot of business is created through social connections. Top luxury agents often have a concierge approach to servicing their clients and work them graciously but aggressively for referrals. They are often involved in country clubs, charities, and the arts, and can be seen out and about town and hanging around with those whose income matches the homes that the agent sells.
One of the best methods for those who are not fortunate enough to have built-in social connections, is to work expired listings. Working expired listings in the luxury price point can be a very practical way in for the following reasons:
- Most luxury sellers overprice when they first list the home, so the second or third agent may find the sellers in a place where they are more motivated to price it right.
- Most agents are intimidated by the luxury price point and will not contact the expireds in the higher price points, and even agents who do service the high-end may not be aggressive enough to prospect the expireds. This leaves the door wide open for you.
If you can convince a luxury agent in your company to allow you to hold some of their luxury listing open houses, you can enter the high-end market by picking up and working those open house buyers.
In most markets you may find some higher end FSBO’s you can get in front of. They may be a bit tougher to win, which is why you will probably have to get in the door to convert them to an appointment to talk about listing their home.
Last, but certainly not least, is geographic farming, which is often the most preferred method of top producers. Whether you farm your social connections, past clients and database, or you farm the actual neighbors in a particular development, it is all about building the relationship and establishing yourself as the expert and clear choice in the mind of the prospect.
How do you establish yourself as the expert even when you have no track record? When you are developing your high-end listing presentation, it is important to upgrade your presentation materials, your personal appearance, your marketing services and budget, and of course your service.
As you develop your luxury presentation you can establish credibility by leaning on the power of the company or team that you work with, assuming they have some reach into that market. You can use the company stats and market share by saying, “We have sold X, we have closed Y.”
If your presentation is well prepared, if you know the market, and if you properly showcase your company’s presence in the market, they probably won’t even ask you how long you have been in the business or how many homes have you sold in their area. However if your presentation is weak, they are likely to pin you down with all those tough questions you are hoping to avoid…so be well prepared!
If you need more help, reach out to a top luxury agent and ask them to partner with you on your first few. You are going to have to give up a substantial amount of the commission, but it will be worth it! Be a great student and learn everything you can from the veteran agent.
Another way to sell them on you is to talk about how you are working the price point just below them and moving buyers up to their market. And certainly, never underestimate how your excitement and enthusiasm to dominate their market may cause them to choose you, believing that you will be hungry to work overtime to get the home sold.
To build your career in luxury, you need to study your market and build a customized blueprint to jump-start your business and to help you prepare to compete and win. To help get you started, here is a link to access a free report, How to Break Into the High End and Luxury Market.