Every luxury real estate professional knows that a transaction happens with more than just a buyer and seller; it can go through the hands of several parties before closing day. We call this a multi-level sale, and in a multi-level sale it is important that you be able to identify and communicate with everyone involved in the decision making process. Below are the three most common parties you are likely to meet in a luxury real estate sale, and our best advice on how to sell a home to them.
The Decision Maker
The decision to buy real estate can be tough and arduous for many buyers. Luckily, luxury home buyers on average buy and sell homes more often than middle class home buyers, so they likely have a system in place for finding their dream home already.
Unlike other types of residential real estate, luxury real estate is largely emotion driven. Luxury consumers are able to buy multiple homes, and thus are not as concerned with moving for the typical practicality-based reasons, like more space or job openings. The type of marketing and selling you do should cater to the emotions behind a luxury real estate purchase.
So, how does a luxury real estate professional interact with the decision maker in a home sale?
Meet with all the decision makers in a sale. Ask them to tell you what features are in their dream home, and also why those features are in their dream home. Understanding the motivation for certain decisions can open doors you may not otherwise think of if you only have a list of “necessary” features. For example, they may say they want a historic home, in a specific neighborhood, and they also want an open floor plan. Now if they want an open floor plan because they often host parties and events, but they don’t mind a renovation, you can find them a home much easier. Their wish list may not seem possible, since many older homes don’t often feature open floor plans, but if you find your luxury client a historic home in their chosen neighborhood that would be an easy renovation, you can present your client with the possibility of an open floor plan.
This participant screens sales people and properties. They have veto power and appreciate quality work and cooperation. A luxury real estate professional should be prepared to work with a screener in every transaction. Be prepared to interact with the screener on a much more logical level than you would the potential home buyers. The screener has no or less emotional ties to the home than the luxury consumer you are selling the home to, so in your interactions with the screener be prepared to discuss numbers and construction techniques.
The Deal Killer
Every luxury real estate professional has had run-ins with a deal killer before. This participant comes in at the end of a real estate transaction and tries to improve the deal, looking for anything that could possibly be wrong with the property to lower the price. Identifying this participant at the beginning will save you a headache down the line when you would otherwise be blindsided. Ask the magic question to determine if there’s a deal killer in your future: “As you make your decision, is there anyone from whom you’ll be seeking input?”.
How does a luxury real estate professional diffuse a deal killer? First, identify different types of deal killers:
- The “something is wrong with the home, I’m going to ask for a discount above what the actual damage costs” deal killer. They may see a scratch on the wall or floor and ask for $10,000 off the cost of the home. This may seem small in light of the entire cost of a luxury home, but the sheer absurdity may turn a home seller off from the sale. The best way to diffuse this situation is to hire a contractor to appraise the cost of the damage. The ability to give a luxury home buyer and seller a realistic cost for damage repair can often salvage a sale.
- The deal killing attorneys. It is important for a buyer to work with an attorney who does closings often. A good closing attorney does have their client’s best interest in mind, and is able to point out potential problems in a luxury home or condo, but an attorney who does not often do closings has the potential to be overzealous and point out insignificant details.
There are, of course, many other variables that come into play when buying a home, and thus there are many deal killers you may have to fend off. These two may be the most common people you are likely to deal with, but be prepared for opposition to arise from many different places when selling a home.
The training team at The Institute for Luxury Home Marketing is able to give you the best resources for selling to each party in a multi-level sale. Attend a live or online training to learn more about the most effective sales techniques for the luxury real estate market.