Wouldn't it be great to earn commissions like the brokers do in popular shows like Million Dollar Listing or Selling Sunset? The proceeds from the sale of a single luxury home could provide you with enough cash to live on all year! Sell enough luxury homes, and before long, you'll be driving a Porsche yourself.
If you're a traditional real estate agent in California looking to transition into the luxury real estate market, here are some tips and information to get you started.
What is the Luxury Real Estate Market?
Luxury homes have a big price tag — they are typically priced above $1M — but they are exclusive in other ways as well. They may have unique features or be in a highly sought after neighborhood, located amidst other luxury homes.
In the greater Los Angeles metropolitan area, the house may have been owned by a celebrity, giving the new owner bragging rights.
How Does It Differ from the Rest of the Market?
With a traditional listing, you can easily find homes with comparable features. In fact, computer-generated algorithms can easily generate a list price based on factors like square footage and number of bedrooms.
That is not the case in the luxury real estate market. Because these high-end homes are so unique, there are fewer reliable comps. That makes these homes difficult to price.
They are also harder to find buyers for. A luxury home with a state-of-the-art production studio, for instance, is going to appeal to only a small subset of wealthy clients. Finding the right buyer is critical when you specialize in this real estate niche market.
What is the Current State of the Luxury Real Estate in California?
Wendell Grayson, the marketing manager at Peak Corporate Network, has some insight on how the luxury real estate market is currently doing in California.
"The trajectory of luxury home sales is tied to the economy, which of course is tied to COVID-19," said Grayson. "Last year's market was primarily driven by first-time buyers not wanting to miss out on interest rates. This year, we'll see a market driven by consumers feeling a bit more flush and game to look at a larger home. Consumers will feel more secure in buying larger homes."
COVID-19 continues to play a role in where Californians are choosing to purchase luxury properties as well. In fact, quality of life is now the single biggest factor for buyers. People are looking for bigger and safer homes in lower density areas. Markets like Napa are red hot in 2021.
According to Mickey Alam Khan, the president of Luxury Portfolio International, affluent buyers are looking for second homes from which they can work and educate their children remotely. That trend will continue through 2021.
What Might a Good Sales Strategy Look Like?
When you sell luxury real estate in California, you need a solid game plan. Some of the essential components include:
Taking great photographs. You must have a professional photographer or videographer come in to capture the property's essence.
Using branding to market each property. When looking for a photographer, it wouldn't hurt to engage the services of one who is a visual storyteller as well. They can help you to brand the house using its unique features. Once the property has a story to tell, it's easier to market to the right audience.
Hosting events to showcase the luxury home. You've seen the brokers on TV throw parties that are in tune with the home's vibe. That's something luxury real estate agents do in real life as well.
Developing your network. Networking is key in the luxury market. It's especially helpful to have a broker network that can send the right clients your way. You also want to expand your network outside the United States; many luxury buyers are not American citizens.