Adapting to trends in the luxury market means understanding the full picture, especially when the market feels like it’s on hold. Seeing “days on market” creep up higher and higher on your listings can be stressful, and it can be tempting to want to drop the price on your luxury listing.
But, even in a market that seems to be stagnant, it’s still possible to change the outcome and speed up the sale without dropping the price, especially if you feel that its priced appropriately. In fact, a price drop can sometimes undermine the luxury quality of a listing, and should be one of the last strategies you use.
Appropriate pricing can prevent price drops
While the luxury market differs from the traditional market in that price is often a secondary requirement to a property’s amenities and location, appropriate pricing is still important to consider. However, pricing appropriately can be a challenge in a market where both buyers and sellers are hesitant to commit, and even more so if the seller wants rather than needs to sell – which can often be the case for affluent homeowners.
Since most buyers and sellers start their process online these days, many may have a skewed perception of their local real estate market, often basing prices on list price rather than sold price, or averages rather than by price bands.
Often, they won’t see that a home has been taken off the market for renovations and recently relisted to match current buyer trends, or they may compare the value of their older luxury home to a new, move-in-ready property with a slew of current amenity features.
Your responsibility as a luxury professional is to help clients form a realistic idea of their home’s current value and guide them to making smart changes and gaining a true perspective of their market.
Raise the perceived value of your listing
If you believe that you’ve priced your listing appropriately, the next thing to consider is raising the perceived value of the property before you lower the price. The perceived value of your listing depends on a few different factors: the actual value of the home, real estate market trends, and the way your marketing reflects the home’s best features.
Raising the actual value of the home requires an investment of time and money on the seller’s part to complete any necessary renovations, update amenities, or even to make the space more neutral to show better when potential buyers come to visit.
Making the space more neutral could mean painting a pink bedroom beige or replacing bold statement furniture pieces with pieces that accentuate the space better and storing the bold pieces away while the home is on the market. Looking at real estate market trends and noticing what’s selling well in your market can help inform potential renovations and upgrades.
If you’ve priced appropriately and believe that the property shows well in person, the next step is to review your marketing and ensure that it communicates the property’s best features and overall value. This means clear high-definition photography, a well-written listing, and a well-defined marketing strategy that includes both online promotion and traditional networking.
Exchange listings with other agents
It may seem counterintuitive to include your competitors in your real estate marketing plan and strategy but doing so can open you up to opportunities. Creating a true network of local agents who you can negotiate with when times are slow can be the missing piece to your real estate marketing plan, especially if you’re in a small market.
Having a weekly or bi-weekly meeting, phone call, or online group chat to discuss clients and properties can lead to exchanges of business that you wouldn’t necessarily have access to without that local agent network.
For example, you may have a listing that won’t sell, but another agent might have a client looking to buy at exactly the price at which you can reasonably reduce it to, or someone who may take a lease option. At the very least, you may pick up new luxury home marketing strategies from other agents.
Networking and training
Success in this market will require you to step outside of your comfort zone – listings and sales aren’t going to happen without some strategic planning.
The Institute Network, our private social media site for Members, is great place to meet other elite agents. The Institute also offers a wide range of resources to invest in yourself at any stage in your career, so give yourself the gift of growth and sign up today.