20 Proven Ways to Break Into the Luxury Real Estate Market
dotloop
April 16, 2021 | comments
High-End Agents and Brokers Share Their Best Practices to Gaining Entry Into this Exclusive Real Estate Niche
It was a beautiful day for a boat ride on Lake Tahoe. Seth O’Byrne of O’Byrne Team at Compass, San Diego, had been making more of an effort to scale his work/life balance and was enjoying a rare getaway when he got “a horrific call” from an unhappy client.
“In the last five weeks, my assistant whose job was to communicate with the client, had become overwhelmed and didn’t communicate once in five weeks for a $5 million home regarding showings and feedback,” said O’Byrne, while speaking at Inman Connect earlier this year.
As it turned out, this client was a builder who did $100-$150 million a year in business, so not only did O’Byrne lose the listing, but he also lost about $600 million in luxury listings due to missed communication.
That was an expensive mistake, but one O’Byrne was able to convert into a learning lesson.
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Communicating effectively and consistently is just one key action real estate agents need to employ if they are to procure and maintain luxury client relationships.
The State of Luxury Real Estate Today
As with most real estate, everything pre-2020 changed with luxury. Investors, who were largely side-lined due to the pandemic, have started to nibble at great buys in Los Angeles, Manhattan and Miami.
Larger homes, which were off trend before COVID, have made a 180-degree comeback, and while cities were once the key domain of luxury, more people are opting to live off the grid.
Also, wellness amenities, like “well kitchens” with farm-to-table amenities and organic dining, have become popular, said Julie Faupel, owner of Jackson Hole Real Estate Associates and Founder/CEO of REALM, a collaborative matching platform that allows luxury agents to match qualified buyers to properties based on lifestyle experiences and passions.
As the geography of the country tilts in the balance of great, low-interest buys and tax-friendly environments like Florida, New Yorkers are trading in their Park Avenue condos for impressive waterfront deals in Ft. Lauderdale and Miami.
Here are more best practices for breaking into luxury from top agents and brokers.
1. Provide an Experience.
Luxury isn’t necessarily defined by material objects anymore. As Amie Quirarte of Tahoe Luxury Properties pointed out earlier this year in an Inman Connect forum, “luxury has shifted into experiences especially when it comes to real estate.”
While joining the luxury ranks of real estate may seem like a VIP room only attended by an elite few, it’s really more of “an ethos that resides in an individual agent,” said Faupel. “We provide people with peace of mind when they’re coming into new communities, and we introduce them to philanthropic, civic and cultural opportunities. People are making massive, life-changing decisions and, as we guide them through the real estate transaction, we’ve become more of a steward of the entire experience.”
As Philip White, President and CEO, Sotheby’s International Realty, also noted, luxury is not defined as a price point but by the level of service provided.
2. Begin with a Luxury Listing Presentation.
Getting listings has become something of an art form with the scarcity of properties on the current market, but any agent can create an ultimate client experience for luxury listers with dotloop’s real estate listing presentation template.
You might start by adding thoughtful touches like a bottle of champagne sent ahead with an invitation to view your digital presentation. Or, you could create a 3D experience showcasing other properties you’ve listed with a virtual tour. In any scenario, Dotloop’s customizable PowerPoint can help to create a conversation around your recent sales, comps, client consultation questions and testimonials while telling a visual story through slick photography.
3. Be Willing to Pay Your Dues.
Many luxury agents find they need to start at the bottom, chasing down lock boxes, following up with leases and organizing a client’s business, before they can work their way to the top.
“While no one goes into real estate saying, ‘I can’t wait to create spreadsheets and work CRMs,’” said Ken Laroza, former broker of record at a luxury brokerage in Toronto, CA, and director of broker relations for Zillow. “You may have an opportunity to create a relationship that requires paying your dues. I’ve seen people taking a lead and doing all the negotiating, closing and still getting 50% commission, but that’s all part of it.”
4. Communicate Clearly and Frequently.
The conversations you have with luxury clients can look quite different from other clients, said Deldi Ortegon of the Deldi Ortegon Group at Keller Williams Realty RGV Powered by Place Inc.
“With luxury clients, you don’t just talk about price per square foot. You talk price points. You’re also dealing with a different clientele, requiring you to understand their needs and the product. Everyone is unique,” she said.
“You have to be well studied, well-read and understand the market,” said Ortegon. “You have to set yourself apart as the expert.”
She recommends previewing every price point in the luxury client’s market and building a network of vendors, including stagers, inspectors and appraisers for this niche group. “There’s a totally different language that goes into luxury,” Ortegon said.
5. Be Flexible.
Luxury clients typically have tight schedules, requiring their agents to demonstrate flexibility. You may have rearranged your day to attend a showing for a luxury client, only to discover that they cancel last-minute. That’s the reality of luxury, but those who are able to navigate the unexpected will also often reap the biggest payoffs.
Make it easy for your clients to contact you, especially before important meetings. Technology can help. Dotloop offers text Messenger on the mobile app, which helps agents and clients communicate, share documents and collect eSignatures quickly and digitally — even when the client can’t be present in person.
6. Be Responsive.
Like O’Byrne, Dawn McKenna of the Dawn McKenna Group, Coldwell Banker Realty, Chicago, IL, learned the hard way when she missed the call from a major CEO of a Fortune 500 company and failed to call him back within 24 hours.
“I represented all of his predecessors and it took me six years to gain that trust again,” McKenna said.
The client ended up buying one of her listings through another agent. “It taught me something,” she said. “If you stop saying, ‘What can I do better?’ you’re done, especially in the luxury market.”
Now, whenever someone calls McKenna’s office, the call first goes to her. If she’s not available, then it goes to her assistant and so forth until there’s an “80% chance that someone will be able to take the call immediately.”
Destin, FL-based associate Dino Sinopoli of RE/MAX Agency One LLC, recommends keeping in constant touch with your high-end buyers, “even if they’re not touching back with you.”
7. Personalize.
Luxury clients are used to being made to feel special, and they often demand no less of their real estate agents. Marianne Fearon, a former buy side trader on Wall Street and now an agent with Berkshire Hathaway HomeServices, Florida Network Realty, Atlantic Beach, FL, was the first Ninja-trained agent in Jacksonville for years.
She said simple acts like sending out personalized thank you cards makes for impactful follow-up. Her clients appreciate the extra touches and often remark in testimonials how Fearon is “extremely responsive” and “gets an answer right away.”
8. Stay Knowledgeable.
Knowledge is power, especially in the luxury real estate market. For White, who’s based in The Hamptons, there are numerous properties that span a wide bandwidth from South to East Hampton.
“Our agents never know when they’re going to get a call from a wealthy prospective buyer or seller, so they have to stay knowledgeable about the whole market. They have to study those properties and know the comps, because the buyers are doing their research too,” said White.
Staying knowledgeable also means staying up on the latest building materials, floorplan options and technology that can help the luxury client make the best, informed decisions.
9. Identify Luxury Clients’ Interests.
Agents who take the time to get to know and understand clients’ lifestyle needs are better equipped to match them to a property aligned with their special interests. Faupel’s REALM platform, for instance, matches vetted luxury agents with luxury clients on a globally collaborative platform built around the client’s lifestyle, styles and tastes, passions and personal interests.
“It’s all about how we’re innovating and informing ourselves and providing our clients and communities with the luxury of information and the luxury of our expertise,” said Faupel. “We have to do a good job of being informed because our clients are more informed than ever.”
10. Consider Leases.
In a 2019 Inman interview, Jason Oppenheim, the founder of The Oppenheim Group, in Los Angeles and star of the Netflix series Selling Sunset explained how he broke into luxury.
“You start out by doing luxury leases that are $20,000, $30,000, $40,000 a month and sell a few $1 and $2 million properties. That’s how I started my business and it developed into a complete luxury company,” he said.
As buyers grow their wealth, they come back to the group to represent their listing and find a larger property. Or they refer the agent to someone in their sphere. Therefore, it’s important to remember it’s not always about getting wealthy clients, but rather, acquiring clients who are interested in luxury properties and have demonstrated growth, Oppenheim said.
11. Stay Organized.
Having a single point of contact, either the agent or a well-trained transaction coordinator once a property goes into contract, can help run interference between the client, the agent and all other service providers, including the mortgage broker, inspector, assessor, contractor and lawyers.
“Dealing with a customer of high net worth requires your business be just as organized as theirs,” said Laroza. “They don’t want to see you all over the place. At the very least, they want to deal with one person. They may say, ‘Here’s my mortgage broker, do everything for me and tell me where to sign.’ They’re still in the loop but not having to check in on a regular basis.”
Using dotloop’s collaborative software will help ensure the transaction moves forward smoothly. “Everyone is invited to the loop, so there’s less back and forth,” Laroza said.
12. Ask Questions.
Asking the right discovery questions can also help agents better serve luxury clients while revealing new opportunities. At Century 21 Beggins Enterprises in Tampa, agents train on asking the right questions, listening and repeating to clarify and confirm their needs. “It’s all about building a rapport,” said President and CEO Craig Beggins.
His agents also have a Lifestyle Profile Sheet pre-loaded into their dotloop platform, which contains a series of questions intended to uncover the luxury client’s preferences, like how far they want to live from work or the airport, and their priorities, such as properties within top school districts. Questions also reveal what the client likes to do in their spare time, such as boating or kayaking — vital information that can help the agent direct them to preferred listings.
13. Sell Luxury as a Second Home.
Since the pandemic, Sotheby’s White noted earlier this year at Inman Connect that many wealthy buyers have been looking at the second-home market in places like Lake Tahoe; Park City, Utah; Jackson Hole, WY; and Steamboat Springs, CO.
“People are moving to these areas for relative value compared to higher price point markets,” said White. “They’re changing the way they live, and I don’t think that will revert back post-vaccine. People are making investments for the future.”
By integrating with a good CRM database, a luxury agent can stay connected with clients by providing listings and information that keeps them connected to the luxury second-home market.
14. Socialize!
When Miami-based Vera Realty Broker Nick Polyushkin first received his license and started selling luxury, he made a point to attend art events, private jet expos and other events he was invited to by friends who worked in the luxury car, jets and boat industries. His network soon expanded.
Selling Sunset’s Oppenheim also sees attending social events as a top way of broadening your sphere. “Go to where the homeowners who are selling luxury properties are,” he said. “It could be a nice restaurant in town or it could be golfing. The more you’re out socializing, the more opportunity you have to secure a client. Go and talk about the fact that you’re a real estate agent as often as you can.”
15. Work Social Media.
While most luxury clients don’t necessarily find and decide on their agent based solely on social media, these digital channels can help luxury agents build a following and market their business.
Polyuskin’s LinkedIn list now numbers more than 5,000 people, and he’s constantly posting on Facebook and Instagram.
Social media referrals also comprise a large portion of business for Phillip Gazca of Place Inc., who has found that clients “aren’t just looking at information about buying and selling. They want to see your lifestyle. They’re picking agents who they want to work with in the same way they look at restaurants. They want to know what an agent looks like, their values and their reviews.”
16. Deliver a Superior Customer Transaction Experience.
In Laroza’s experience, luxury clients are often checking emails for business, and the last thing they want is a confusing, disparate system requiring them to log in and out of multiple systems to sign and retrieve documents.
“I always remind agents that not every customer looks at their email on a regular basis; but, in the luxury market, they’re actually checking their emails more often. Not having 15 emails from four different people will make the transaction more simplified and streamlined,” he said.
In addition to bringing all service providers and documents onto one collaborative platform, dotloop’s mobile app allows busy clients to sign on the go, easily scan pictures and documents from their phone, and text their agents using dotloop’s Messenger.
17. Pay Attention to Detail.
When you’re dealing with properties worth millions, even a small mistake can have huge consequences, so it’s critical that you have a degree of confidence and are taking great care with the details.
Dotloop’s Tasks can help keep all parties organized and on time by providing an itemized, to-do list that helps alert admins, agents and clients to certain tasks that must be completed.
Likewise, dotloop’s Templates contain pre-populated documents specific to a certain transaction, which help automate compliance and ensure that all documents are included and signed before the closing.
18. Look to New Construction.
New construction offers a great option in markets where inventory is tight and yet there’s room to grow.
More and more, new construction with amazing amenities is winning the bid for wealthy buyers’ dollars. In Southern Florida, for example, Nick Polyushkin has seen great demand for showings at the super luxurious Aston Martin Tower, a new construction oceanfront tower featuring a superyacht berth, gallery sofas made of special thick, supple leather from the Scottish Highlands and residences ranging from $700,000 to $50 million for a penthouse.
19. Dress for the Occasion.
Fearon has found that knowing who your buyers and sellers are and adapting to their lifestyles has helped her build rapport with the luxury client. “When I work with millennials, I wear jeans and a nice pair of sandals. If I’m meeting with older people, I dress more conservatively and pack big umbrellas in the car. If I’m working with a family and kids are coming, I pack a cooler with yogurt, drinks and cheese sticks. Many times, families are looking at new construction and I’ll watch the kids, so sometimes I have to work like a nanny. It’s little things like that which makes a huge impact,” she said.
No matter who the client is, when she’s on the go showing homes, Dotloop’s mobile app makes it easier, allowing her to travel with her transaction management software. “If I’m doing a listing, all of my documents are there. And I like that I can pull everyone in the transaction into the loop,” said Fearon.
20. Prepare the Listing Client.
Psychology plays a big role in luxury real estate, according to Ortegon. When sellers who have built a home and raised a family in the house find it hard to let go, it then becomes the listing agent’s role to prepare the client emotionally and depersonalize the property. Navigating the psychology of the luxury sale requires an agent to demonstrate tact and persuasive communication skills. But once you master the talk track and demonstrate your real worth as a master negotiator, the luxury client will be yours for life.
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