In a discussion about the luxury real estate market led by Candace Adams, president and CEO of Berkshire Hathaway HomeServices New England, New York and Hudson Valley Properties, industry experts all had specific opinions on how they defined the high-end market. Michael LaFido, a luxury listing specialist, suggested five property price points or “buckets” ranging from entry-level to ultra-luxury. Morgan Carey, CEO of Real Estate Webmasters, noted that luxury is the top 5% of a market, while Morad Fiki, of Fiki Properties Group, simply defined it as the most beautiful homes in any given market.
The panel discussed the importance of marketing, with Carey emphasizing the need to understand and cater to the demographic, and Fiki highlighting the power of social media. LaFido suggested leveraging other people’s properties for those on a tight budget, while Carey stressed the importance of measuring marketing efforts. The panel agreed that global marketing is necessary, but should be targeted toward international REALTORS® rather than consumers.
LaFido broke down his “bucket” list as follows.
“Number one would be the entry level or starter price point,” he said. “Two would be the average price point for that given market. Third is a high-end home that is two times the average sale price for that market. Fourth is luxury, a home that’s three times the average price. And then ultra-luxury, which is usually the big markets: Miami, East Coast, West Coast, Chicago, Houston, etc., which would be 10 times the average sale price.”
Adams requested that Carey explain the common marketing denominators in the luxury space.
“You need to show your demographic that you understand who they are, and you need to show them that you understand what they want,” he said. “And, ideally, unless you’re trying to break into the luxury market, you’re demonstrating a track record of being able to successfully navigate those things, being able to fulfill that luxury promise for past clients.
“It doesn’t matter if you’re marketing to first-time homebuyers or the luxury buyers. You need to demonstrate an affinity for the things they’re interested in, and the knowledge for the price points, the neighborhoods, etc. So know who they are, demonstrate what they want, and showcase that you can deliver those things and have a track record of doing so.”
Adams then asked Fiki what the allure is for agents considering a move into the luxury market, which has many fewer homes for sale percentage-wise than ones most people can afford.
“Being immersed in a luxury space, in the top of any given market, you can sell much fewer homes and hit a much higher sales target than if you’re selling the homes in the median price point,” he noted. “How many houses is it going to take for you to sell at the median price point to hit, say, $50 million in sales? It’s going to take a lot of transactions. The top agents I know in our market, they’re doing 40 transactions a year and hitting $100 million because their average price point is $2.4 million.
“So you’re doing a lot less of the work, and you’re hitting a much higher sales target and establishing a greater name-presence brand. I focus on the luxury space because I want to deliver the best of our market, and also hit a much higher sales target. At the end of the day, it’s important that you sell a good sales volume to have an impact on the market.”
Succeeding in Luxury
LaFido spoke of how some agents believe there are certain prerequisites they must possess before they can break into luxury. These include the need to be licensed a certain number of years, live in a certain community, drive a certain car or be with a certain brokerage.
“I call those excuses, or limiting beliefs,” he said. “Sure, there are some agents that maybe start off on third base because their parents were in the business or they were raised in a private community and live within a wealthy area. That definitely helps, but mindset is everything. What are you doing to familiarize yourself with the products? Are you going to open houses? Are you talking to top luxury agents? Are you listening to podcasts or attending RISMedia events like this to grow your knowledge?
“If you’re more knowledgeable, you’ll be more confident. If you’re more confident, you’ll step out of your comfort zone. If you step out of your comfort zone, you might do some prospecting, lead gen or go to some networking events. At the end of the day, high-end sellers and high-end buyers put their pants on one pant leg at a time. Sometimes we can intimidate ourselves and think we don’t belong. That’s not the case. Grow your knowledge and your confidence will grow. Figure out what other successful agents have done, what specialists have done, then tweak it and make it your own.”
How to utilize social media in the high-end market was another topic. Fiki pointed out that whenever he uses social media he’s marketing properties, but mainly marketing himself.
“You have to bring authenticity, you have to engage the audience, and you have to continue to develop relationships while showing properties,” he said. “People are going to be drawn to your personality, and people want to get to know you. Don’t be the agent who’s only showing properties but is boring and monotonous.
“If you don’t have luxury homes you can showcase at the moment, what luxury broker relationships are you building that can take you under their wing and allow you to showcase their listing? You’re going to show it on social media and it’s going to look like it’s your listing, but you’re not saying that. At the same time you’re helping them because you’re bringing promotion, you’re bringing creativity, you’re bringing your audience to their listing. And you might find a buyer or someone who’s looking to do something in the next six months.”
With the market still challenging for many reasons after an exceptionally trying 2023, luxury property sellers are also having to make tough calls on pricing, while agents must carefully decide how much to budget for advertising and such.
“Things have shifted in the market, and an interesting thing is going to happen that not a lot of people are used to, which is that properties are going to sit on the market for a long time,” said Carey. “Previously, you could invest in all kinds of great ideas for marketing, and you could allocate a budget. That budget and that idea would make your seller really happy, and the property would sell so quickly that there wasn’t a lot of time to measure the results of that marketing. And because things were selling so quickly, people were happy. I made an investment, I did some marketing, and it sold. But now it’s going to be far more expensive to be able to run those same campaigns.
“It’s all about simple concepts. You have to write it down in order to measure it, and you have to measure it in order to improve it. When you do that, not only will you be able to tell what’s working, you’ll be able to tell what’s not working. And so you can stop investing dollars in things that you couldn’t necessarily measure before because the market was so fast. It also gives you something tangible to take to sellers when they become frustrated because their home hasn’t sold in 30 or 60 days.”
The uniqueness of many luxury properties lends itself to potentially getting free publicity, explained Fiki.
“When you’re building PR, or you’re trying to get PR for yourself or one of your listings, it first starts with relationships,” he said. “Here in Houston we have the Houston Chronicle, we have Houston Luxury Magazine and so many other different avenues. These publicity channels need content, guest writers and experts in any given area to talk about what’s going on.
“Do you have a listing that maybe had incredible architecture or an incredible designer that’s known? Could you write a piece that would get published? Because they need content. Of course it takes time, but it’s well worth it. If you can be creative and build relationships and be consistent, you’ll generate a lot of publicity for yourself and your business.”
Carey stressed that there’s an international aspect to the luxury market, and that REALTORS® should think about trying to reach not just potential buyers in other countries, but agents there as well.
“You can tell a potential luxury home client that you’re going to advertise in an international magazine, or on a TV commercial,” he said, “and those are things that have their place. That investment can sometimes help you convince the seller to list with you. But I truly believe that almost never sells a property. There are so many disparate markets, different languages, different preferences, etc. You don’t know anything about them, generally, but there is a group that does know about that market, specifically the buyers.
“That group is the international REALTOR®. So when you’re planning your advertising, it should never be targeted toward the consumer. The consumer may see it, and it should appeal to the consumer, but your advertising should be targeted toward the international REALTOR® because they’re the ones who know the local market. They’re the ones who have the international buyer that you want to match up with your listing. And they’re the ones who understand that there could be a commission for them by way of referral to reach out and actually connect you with their buyer.”
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