Adapting to real estate trends in the luxury market takes some creativity, especially in a static market. Seeing the days on market creep up higher and higher on your listings can be stressful, and it can be tempting to drop the price on a luxury listing too soon to make the sale.
But, even in a market that seems to be a bit more sluggish than usual, it’s still possible to speed up a listing without immediately dropping the price. In fact, a price drop can sometimes undermine the luxury quality of a listing, and therefore should be one of the last strategies you use.
Appropriate pricing can prevent price drops.
While the luxury real estate 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 that is both changing and also lends itself to less urgency in sellers who don’t necessarily need an immediate profit from their home.
Since most buyers and sellers start their buying or selling process online these days, many may have a skewed perception of what their local real estate market trends are based on information they see on major listing portals. Often, they won’t see that a home has been taken off the market for renovations and relisted, or they may compare the value of their older luxury home to new developments.
Your job as a luxury real estate expert is to help clients form a realistic idea of their home’s current value and guide them to making smart changes if necessary. This is something new luxury real estate agents may struggle with, which is why we have made it an integral part of our Certified Luxury Home Marketing Specialist (CLHMS) training.
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 consider lowering 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. Taking a look 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 also 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.
Helping your client make these choices does take a bit of confidence, which is why we highly suggest taking our CLHMS training to hone your skills.
Take the property off the market and wait for better conditions.
In some cases, it may make more sense to take your listing off the market to wait for better conditions. For instance, if your market experiences harsh winter conditions, waiting for spring or summer might help you get the price you and your seller deserve.
However, it should be noted that taking the listing off the market to relist later should be your last resort. In some markets, you may have to wait a certain amount of time before you can put your listing back up for sale, so if you and your seller decide that taking it off the market makes sense, be sure they know that it could be a few months before they can relist.
Our CLHMS trainings help you learn the philosophy behind successful luxury home marketing so that you can start to apply it to any of your luxury listings. Start investing in your education today with our online or live training options!
Diane Hartley is the president of The Institute for Luxury Home Marketing, a premier independent authority in training and designation for real estate agents working in the upper-tier residential market. Hartley brings her passion for luxury marketing and more than 20 years of experience growing and leading businesses to her role as president of The Institute.