The luxury real estate market niche is highly lucrative. A multi-million dollar property can get you a huge chunk of money from a single deal as a commission, rather than the same amount across a multitude of median-priced deals. But breaking in is incredibly difficult.
Breaking into the luxury real estate market requires targeting prospective sellers and buyers interested in high-end properties. It requires marketing, advertising, and networking to create an impression of exclusivity and prestige.
Becoming a successful real estate agent in the luxury market takes more than simply knowing the details of the properties and being an expert in the local area. While succeeding in this niche takes more than merely implementing the information outlined in this article, these 11 tips will help you take your first steps forward on the path to breaking into the luxury real estate market.
What Is a Luxury Home?
Luxury homes are valued within the approximate 10% (or 5% to 1% depending on the area) of all properties on the local market. They are located in prime or optimal areas, constructed with high-end materials and finishes, designed with architectural details, feature decadent amenities, and tend to be on the bigger size compared to other properties. These high-end constructions are priced higher than the majority of other local properties and can easily go upwards of one to tens of millions of dollars.
While agents can receive bigger commissions for these expensive homes, breaking into the luxury real estate market takes more effort than listing an average property. Luxury real estate professionals deal with high to ultra-high net worth individuals, a group of people who have more than $30 million in assets. These luxury clients expect a certain type and level of service from their real estate professionals.
Marketing these properties and working with these individuals requires preparation in advance to be successful. You only get one chance to make a great first impression.
Become an Expert
Clients will expect you to be an expert in the real estate market, so it is up to you to study your market. Know the number of listings and sales along with the open houses in the price point you are working with. Know what your clients are looking for in homes at this level and what amenities they naturally expect.
While different luxury credential programs carry different weights within the real estate industry, there are several designations you can earn to set yourself apart from the rest of the competition. Since you are just getting started in the luxury real estate market, you might want to explore the following certifications for more knowledge:
- Institute for Luxury Home Marketing, Certified Luxury Home Marketing Specialist (CLHMS)
- Accredited Luxury Home Specialist Designation Course (ALHS)
- Agent Campus: Certified Luxury Real Estate Agent (CLRA)
- Global Elite by RESAAS, Global Elite Marketing Agent (GMA)
These certifications and designations, like the Certified luxury real estate agent CLRA, train real estate agents by increasing insight and understanding to help agents market with their seller and buyer goals in mind.
Know the Local Community
Learn about nearby country clubs, golf courses, schools, riding stables, and more of the communities in the area. Having amenities nearby offers more of an incentive to live there for many people. Observing areas where your high-end clientele gather is a great way to figure out what will attract a certain type of person to the zip code and commit to a luxury home. You are selling a lifestyle along with the listing.
Luxury is subjective, as it depends on the region. For instance, a luxury home in Texas can look very different from luxury in Manhattan or Beverly Hills. You need to emulate an image specific to the area you are marketing, which can get expensive. However, consider it as a much-needed investment to present yourself as a luxury agent.
Community involvement can also boost your coverage in the local market. Consider reaching out and taking an active part in organizations and volunteer causes that fit with your interests. You will tap into the network that forms these groups and establishes your credibility when engaging with the local community. Also, charity events are covered extensively by the local media, increasing your exposure while you give back to the community.
Act the Part
To serve high-end clients, you will need to become familiar with their hobbies and preferences. This could mean going to art galleries and luxury shopping boutiques, vintage or sport automobile shows, horse riding equestrian events, and so on. You will need to be knowledgeable about the latest season’s trends and entertainment, which can help break the ice and make conversation flow when you find similar interests.
Learn how to pronounce names of high-end brands and architectural features in the luxury home. You will need to speak somewhat intensively about the home’s high-end features and its one-of-a-kind amenities. A client will expect you to know every aspect of the home.
You will also need to invest in yourself and your appearance by dressing in high-quality, tailored pieces. Keep your nails clean and manicured, and your hair neat or styled. Most importantly, do not underestimate the importance of shoes.
Studies show that shoes are a crucial source of first impressions, as they reflect the wearer’s personality in terms of status and personality. Depending on the impression you are looking to make, well-maintained designer shoes can convey a meticulous and luxurious image.
Sending out emails and executing paid ad campaigns on Facebook does not cut it. You need to start moving in the same circles as your clients, and the best way is to start at networking events. You should be prepared to meet clients at any time, which means dressing and being professional anywhere you may potentially run into clients. You could potentially meet your next high-end prospect at a coffee shop!
All of your clients should be treated with respect. But high-end clients are used to getting white-glove customer service regularly, and you need to strive to provide this luxury client experience. This can include the following:
- Practicing discretion: High-end clientele requires discretion, as some do not want to publicize where they live or want others to pry into their private life. Your clients trust you to work with them, so respect their privacy and practice discretion.
- Be organized: Do not let any detail fall through the cracks. You do not want to accidentally not respond to any email or phone call. You may want to hire a personal assistant to keep you accountable, especially if you find yourself being pulled in multiple directions.
- Communicate: Be proactive and responsive during each step of the process. You need to be available for them at all times, as often high-end clients can be based internationally and in different time zones from your business hours.
Approximately 48% of affluent millennials also prefer having a realtor that listens to them and asks for their opinions in their buying journey, compared to a 24% preference among the baby boomers generation. With these differences in mind, it is crucial for real estate agents to adapt and reposition themselves depending on the type of client they are working with.
Target the Right Area
Make sure to target a specific area or demographic audience. For instance, target high net-worth individuals when running ad campaigns on social media. This could mean targeting people based on their occupations (C-level suite, founders, etc.), zip code geo-targeting, financial income, luxury fashion labels, and even high-end cell phone device ownership to refine your audience in Facebook ad campaigns.
Dive deeper and include more information in your ideal client’s profile. Depending on their age and gender, they could tell an agent what kind of language is often used, the luxury trends they follow, and if they prefer a more conservative or casual vibe. Keeping this type of information in mind helps with creating and developing collateral for marketing and advertising. There will be an increase in quality leads when you align your marketing materials to the targeted audience.
By the year 2030, millennials will have approximately five times as much wealth and will most likely inherit over $65 trillion from their predecessors. This wealth means more affluent millennials and future homebuyers. It is crucial to understand the current and future client profiles for luxury homebuyers to break in and stay relevant over the next few decades.
Reach Out to Vendors
High-end clients have relationships with vendors and service professionals, whether it be CPAs, attorneys, private lenders, and bankers. Establish a relationship with these vendors, as these individuals can refer you to buyers or sellers in the market for luxury homes.
Having an extensive network of connections in other industries besides real estate is crucial in creating a pipeline of leads through referrals. Chances are they will know high-end clients and refer them to your business.
Showcase Marketing Collateral
Each of your marketing materials should feel high-end and luxurious as if a marketing firm or advertising agency created them. You should develop an eye to see what looks good and what doesn’t make a huge difference when pitching clients.
From property brochures or books to business cards, real estate agents need printed marketing materials to provide to clients. Have photos taken by a professional photographer to ensure each property looks beautiful rather than using the camera on your phone. Also, invest in heavier stock paper, engraved or embossed lettering, gold film, and full color in your marketing materials to give them more of a high-end touch.
While opting for these finishes on your print materials will make the cost exponentially higher, you will not need them after a property is sold, so print a limited amount in consideration of your marketing budget.
If a photo is worth a thousand words, then having a video walkthrough is priceless. Investing in a video or virtual tour will allow your client to experience various aspects of the home, eventually enticing them to see it in person. High-quality video clips shot with a professional videographer with proper lighting, and furniture staging will capture the vibe you are looking to display.
You may also want to invest in drone footage for large luxury estates to survey the area from a different perspective. You will be able to capture the entire area and can show off the size of the property. These are all footage you can use in your print and digital marketing, so they are well worth your investment. Realtors that invest in professional real estate photography sell homes approximately 32% faster than about 10% to 20% higher in price.
You can also live-stream the luxury property on Facebook and Instagram Live. Viewers can post questions regarding the property, which you can answer in real-time and have a more interactive experience with your audience.
Now that you have your materials developed, you are ready to advertise. Note where your luxury high-end clients are reading, whether it is the daily newspaper, online blogs, or high-end luxury fashion magazines.
Advertising in print publications is expensive but can be worthwhile, especially if your clients are reading through a specific type of publication. For instance, you can buy an ad highlighting a luxury home near or with a golf course in a golf magazine. Aligning potential interests and hobbies to homes can help you target ideal prospects.
In the digital world, you will also need to have a website with content optimized for search engines to make it easier for prospective clients to find your business. You should also have a budget to implement paid advertising campaigns to help your business show up in search engines and on social media. But most of all, be personable on social media and post from a stance of contributing valuable information rather than pushing a scripted sales pitch.
Spend Money to Make Money
For luxury real estate marketing, you need to spend and invest money to make money. Marketing, advertising, staging, and professional photography can become very expensive. But beyond these factors, you will most likely need to budget for client appreciation events and gifts. While these can add up, it is often worth it as luxury real estate commissions can easily go into the six-figures.
YouYou may hold an open house event as an advertisement for a home for sale on some specific listings on some specific listings. Rather than a simple open house, you may want to position it as a social gathering with food, drinks, and live music. These can cost a lot more money than a regular open house but incentivizes prospects and other agents to visit the property.
Co-Market or Join a Luxury Real Estate Brokerage
Try to network with other luxury real estate agents and try to co-list, co-market, or co-buy with them first before attempting to land your first high-end client. Clients will expect you to have experience in the real estate market, especially in luxury real estate, so having a track record helps. Work with them to co-market luxury properties to gain valuable experience.
It would also be helpful to join a brokerage that has experience in the luxury real estate market. They will have processes and procedures that can help guide and navigate the luxury real estate market. While you will need to split your commissions with the luxury real estate agency, you will learn insider tips and trends of the luxury real estate market.
Established luxury real estate brokerages will also have agents that you can co-list or co-market with, which provides you with more credibility as you build up your experience in the luxury market. Also, working with an experienced luxury real estate agent will help you learn how to handle high-end clients, manage various situations, and network effectively.
Study Luxury Agents
Look at what the luxury real estate agents are doing right now that separates themselves from the competition. Study how they market and present their brand, whether it be by their website, marketing collateral, or business cards. Joining a luxury real estate brokerage can help you as you can work with and interact with luxury real estate agents daily to see how they best market themselves and the luxury property.
Your competition is constantly working to establish their reputation and brand online. So you can identify these top sellers on social media, subscribe to their email listings or newsletters, read their online blog, or watch their YouTube videos. Take into account the verbiage they use and the design of their marketing collateral. Depending on the agent, they may be using a graphic design or marketing agency that you can tap and utilize for your marketing materials.
Monitoring how top agents work and do business will give you meaningful insights to emulate and apply to your own business.
Luxury real estate has pricier and more affluent buyers and sellers. To succeed, you need to focus on positioning your brand online and in-person by establishing proper marketing and advertising channels. A lot of agents try to break in, but not many can operate successfully in the niched luxury real estate market. It all depends on your commitment and drive.
Take a look at how you present yourself both online and in-person, and apply these tips to take your first step into the luxury real estate market. You will soon be ready for your first luxury co-listing and well on your way to becoming a luxury real estate agent.