When it comes to dealing with high net worth individuals, they are all unique. However, there are a few things they all have in common. They are all among the ranks of the wealthy and very few of them got there by accident. In today’s economy this truer than ever before – with over 64% of high net wealth stemming from the self-creation of individual fortunes, 19% from individuals with inheritances that have enabled them to generate more wealth, leaving only 17% of the wealth resulting from inheritance only.
This is a very shrewd generation, so we have taken this opportunity to investigate some of their consistent factors. However, we would also like to encourage you to provide your own comments, insights and even share stories and experiences – The Institute for Luxury Home Marketing is dedicated to helping real estate professionals provide high-quality service to the buyers and sellers of luxury homes – and we would like our blog to become your source of both discussion and learning.
High Net Worth Individuals Will Test You
High-end, successful clients prefer to be surrounded by people they view as competent. This competency can be measured in a variety of ways, and many of them will have a secret test that they use to evaluate you and your capability.
According to Mike Van Wyk, The Vice President of Customer Research and Insights at Capital Group, there are a few questions you can ask your client to evaluate what this test is and how you can best serve them.
“What does success in our relationship look like to you?”
Your client will most likely give you a blanket statement with this answer, but it is important to ask and open the door nonetheless.
“How do you know if I’m doing my job well?”
This will probably lead to that secret test that the client is watching for you to pass. Keep in mind that while it does open you up to review and judgment, it also will give you the answers you need to give your client the best service possible.
Advisors are Key
Many high net worth clients rely heavily on their advisor and their opinions. Their advisors are individuals who they let in to the innermost workings of their business and their finances – they take what they say to heart, even in matters of real estate.
According to a Capitol Group and Marketing Strategies Survey, 85% of high-end clients say that their advisor is working in their best interest and 77% of them say that trust in their advisor has improved over time.
These numbers only corroborate the statement that an advisor is a wealthy client’s most trusted source. Win the advisor and you win the client.
Clients want to work with someone who has their best interest at heart, not just someone who can close a deal. While agents tend to lean more towards being transactional (which is understandable – no deal means no paycheck!).
Taking a step back, putting the client first and focusing on that relationship is what will earn you a client for life – and often their referral too.
This means that you need to be upfront and honest with your clients, if a potential deal is not good for them, be transparent and advise them to back out.
The Ultra-Wealthy Respect Confrontation
In real estate, confrontation is part of the job. These types of transactions typically have a buyer and a seller, both with a stake in the game, and both with opposed interests. According to Dolly Lenz, the Vice Chairman of Prudential Douglas Elliman, these negotiations can become heated and you have to be able to hold your own.
“Your client is watching and evaluating your performance and couldn’t care less about your comfort zone. Get the job done, no excuses, and you will have a client for life,” said Lenz, “If you want to make it in the high-end pressure cooker that is New York real estate, that’s what it takes.”
But it goes beyond negotiating a contract for a buyer or seller. High-end clients are smart and negotiate mega-business deals every day. They are determined individuals who know what they want. Part of advising a high-end client is to listen to their ideas and be transparent about what they are saying. Even if your opinion is that you disagree.
Lenz says, “I don’t tell them what I think they want to hear, I tell them what they need to hear.”
Let your client know if you believe they are making a good or bad decision. They will respect your honesty and your confidence to speak up in their best interest.
For more insights, tips and great training on working within the luxury real estate world and with high net worth individuals, sign up for one of our Training Courses today to learn more best practices and secrets.