Whether it be a stately mansion on acres of land in Georgia, or a sleek and modern high-rise condominium with all the latest amenities overlooking the water in Maine. Luxury real estate takes many forms. But, many of the strategies for success in this niche are tried and true. Find out what they are.
Luxury homes are often defined as those over $1 million; like everything else in real estate, the reality is much more location-specific. While a $500,000 home located in some moderately priced markets might easily meet the criteria for being a luxury home, true luxury homes in pricey markets like New York City or San Francisco might be priced many times that baseline. Factors that affect a home’s designation as “luxury” may include location, surrounding homes and landscape, as well as amenities and other factors such as views, nearby bodies of water and historical or architectural significance.
“We don’t define luxury homes by attributes,” says Susan Thompson, of the Atlanta - Buckhead (Ga.) market center. “Where my office is, $750,000 might not even be considered luxury. If you take the top 10 percent of the Buckhead marketplace, we’re priced at $950,000 and above.”
Figuring out the definition of luxury homes in your market area requires knowing your market and its common attributes. And, if you’ve decided to sell those properties once you’ve defined them, it’s important to employ some basic best practices in being successful in luxury real estate sales. For agents like Thompson, it’s a gratifying and lucrative specialty.
Finding the Top End
Portland, Maine is a city with many personalities. With just 63,000 residents in the city and 300,000 in its metropolitan area, the luxury market represents less than 10 percent of the city’s real estate market. However, it’s a segment that represents fully one-fifth of the business of Keller Williams associate John Hatcher of The Hatcher Group in the Greater Portland (Maine) market center, which had roughly $40 million in transactions and 106 closed units in 2015. He says the city’s luxury price point starts at roughly $750,000, while the Greater Portland market area that his team services would be more like $500,000; triple and double the county’s median home price, respectively.
Hatcher, who grew up in the Portland area, says that selling luxury real estate is different than selling more moderately priced homes. In addition to knowing the market, it also helps to be a student of the area’s history, architecture and development, so you can point out elements and features that will be meaningful to the buyer. For example, Portland’s peninsula, which is within walking distance of downtown, has a selection of historic early 20th century mansions that range from 4,000 to 14,000 square feet at typical price points of $1 million to $3 million. The downtown area, called “Old Port,” has sleek, modern million dollar condos, which were just in concept stage five years ago. Nearby “country club living” is available from roughly $750,000 to $1.5 million, he says. All are considered luxury properties. In addition to understanding your area’s history and architecture, Hatcher says luxury real estate agents need to be versed in the most modern and desirable home technology. Hatcher is a member of KW Luxury Homes International. The group invites experts to its meetings to speak about the latest in appliances, home security systems, “smart home” systems and other technology.
“We have gone to the high-end appliance stores to have them explain the top appliances – Sub- Zero, Thermador, Wolf, Dacor – so that we understand when we walk through a house that that is a $12,000 range. We see so few AGA stoves, but we sold a home last year that had a $35,000 AGA range. It’s important so you understand what you are selling,” he says.
For Thompson’s area, understanding the property attributes is important. However, location is the primary driver for luxury properties in her area. The home doesn’t have to be large or have a pool. A small, three-bedroom, two-bathroom “cottage” on a signature piece of property with historical significance could sell for $1.5 million, she says. “It’s really location, location, location,” Thompson says.
Tried-and-True Luxury Selling Truths
Selling luxury properties is more than a transaction, it is an experience. Working with affluent clientele is not something to be taken lightly if an agent wants to exceed their client’s expectations. Luxury clients are used to a high level of service and that’s what they expect. In return, not only does this make the customer experience successful, it most always can lead to more referrals, more closed transaction, and more reputational success in the industry.
This article originally appeared in OutFront.