How to Break into Luxury Real Estate
Everything about luxury real estate agents denotes subtle sophistication and class – from luxury real estate business cards to perfectly polished websites. The vocabulary of luxury agents is different, and they rub elbows with high-class members of society. It’s no secret that luxury real estate agent salary is drastically different from that of the typical agent.
If luxury real estate is where you want to be but you’re not sure how to become a luxury real estate agent, this article is for you. Whether you want to sell luxury real estate in Beverly Hills, Hawaii, Las Vegas, New York, or South Florida, we’ll cover what you need to know.
What is Luxury Real Estate?
According to broker Michelle Faber Ross on the US News website, the term “luxury real estate” is overused. Generally speaking, luxury real estate is $1 million and above. However, in high-end cities, homes need to cost at least $4 million before they’re considered luxury homes.
Have you ever wondered, “How much do luxury real estate agents make?” If you’ve never looked into it, you may want to put some pillows on the floor to cushion the fall for your jaw before you read the next paragraph.
The average agent makes 3% commission on every home sale. That means that an agent selling a $180,000 home would make $5,400. However, if the agent sold a million-dollar home, they’d make $30,000 on a million-dollar home. If they sold a $4 million home, they’d make $120,000. (You may have started out selling homes for that much, depending on how long ago it was and where you were located!)
1. Expand Your Team By Adding a TC
Being a luxury real estate agent is just as rewarding as it is exhausting – but you’ll need to do a lot of hard work upfront before you start seeing results. To make things easier for yourself, hire a transaction coordinator. More specifically, we recommend that you hire one of our transaction coordinators. Here’s why.
Our Transaction Coordinators Really Save Time
Other transaction coordinator services make misleading claims when it comes to time savings. Out one side of their mouths, they say you’ll save time, and out the other, they’re telling you to sign a contract that you’ll fix any issues within the transaction. If you’re expected fix incomplete or incorrect transactions, what’s the point of hiring a transaction coordinator in the first place?
At Close Concierge, your transaction coordinator will handle the entire transaction process, from start to finish. You’ll get flawless transactions, every time, and you’ll save 15 hours of time. (With that time, you can take care of the other things you’ll need to do as a luxury agent.)
Our Transaction Coordinators Are Far More Dedicated
Where can you find transaction coordinators who work outside of normal business hours and on weekends? None other than Close Concierge. Our coordinators are as invested in your real estate business as you are, and will gladly handle real estate transaction emergencies that come up for you.
This is important, since according to Sean Moundry from The Close:
“Luxury homes can take two to three times longer to sell than the average home because fewer people can afford them. Plus, many are custom-designed, making them difficult to price correctly the first time.”
Phil Kaminowitz of Sky said:
“(In 2018), luxury homes spent an average of 506 days on the market. 23% took more than 730 days to sell. In comparison, the average value home is sold in under 80 days. The longer a home is on the market, the more likely it will sell for below the asking price. In 2018, the average luxury home sold for only 78% of the asking price.”
Even if the home takes a long time to sell, there are stipulations within contracts to perform tasks within a required time frame. In other words, once things get moving, the clock is ticking. Having a transaction coordinator will help you ensure the process is going as smoothly as possible (so that all your hard work to get the sale doesn’t fall through).
2. Be On Par with Your High-End Clients
Whether it’s a Rolex or a real estate agent, high-end clients can spot a fake from a mile away. It’s crucial that you exude confidence and refinement – and there are some practical ways you can do that. Just remember to find ways to authentically make the transition to luxury, or your prospects may start to see you as the “Faulex” of real estate.
Take Up Similar Interests to the Wealthy Elite
Luxury clients have several hobbies that don’t apply to the rest of the population. Places where you can rub elbows with refined members of our society include:
- Art galleries
- Charity galas
- Charity auctions
- Jet expos
- Horseback riding
- Car racing
- Fine dining restaurants
As we said earlier, ensure that you’re choosing interests that you’re already excited about or have always wanted to try. Otherwise, your efforts could prove fruitless.
Dress for Success
Dressing for success entails more than putting on high-end clothing. You’ll want to tailor your clothes to the specific people you are trying to appeal to. Young millionaires dress differently than older ones do – so keep that in mind as you decide what to wear.
Here are a few more fashion tips:
- Wear fitted clothes
- Don’t wear logos
- Buy high-quality staple items (think classic, not trendy)
- Take care of your clothing (iron it, dry-clean, etc)
Anticipate Prospect and Client Needs
Being thoughtful can go a long way. Whether you’re showing a home or sitting down with clients to talk things over, think about what you can do to make their experience more enjoyable. Having an eye for details as you personalize their experience can result in repeat business.
Ask questions to find out their preferences. Take note of what they bring to meetings. Do they have a favorite coffee order? Consider bringing it next time you meet with them. Bring water and snacks for little ones. Be willing to watch the kids while mom and dad are discussing the home purchase. Small gestures like these don’t go unnoticed.
Part of the ability to anticipate your clients’ needs is being available to speak to them anytime. The problem for many real estate agents is that they are so busy hustling to get the next deal that they don’t have time to answer the questions their current clients have. You need to be available for your clients, which brings us to the next section.
Communicate Clearly and Often
If the average client hates feeling ignored by their agent, how much more so does a client who’s got plenty of cash to throw around? If your goal is to become a luxury agent, you’d better provide a luxury experience.
Unfortunately, many agents struggle in this area. You need only type “my real estate agent is” into Google to see the proof. Here are some autocorrect responses we found:
- “…ignoring me”
- “…too busy”
- “…not helpful”
- “…doing nothing”
Although we know that the above answers are not true for most agents (except maybe “too busy/slow” for agents without TCs), the fact is that the average client doesn’t know or care if you’ve got other people to deal with. They don’t know the ins and outs of real estate or the many hurdles you need to jump through to see a transaction to completion.
Luxury clients tend to know more about real estate than the average real estate client, but that doesn’t mean that they’ll let you off the hook if you aren’t responsive. If anything, they’ll expect more communication from you – and move on more quickly if you don’t deliver.
3. Rebrand Yourself as a Luxury Agent
You’ll need to totally rebrand yourself – not only in terms of personal interests and clothing but your marketing materials.
Everything prospects see should exude class and sophistication. Your website, business cards, advertisements, and social media pages should look polished and professional. Using Luxury Presence, a platform built to cater to luxury customers, is one way to do this.
Here are some other ways to optimize your marketing efforts.
Get a top-notch professional headshot. The quality of your headshot will say a lot to luxury clients – so invest in a professional photo session that will make you look like the luxury real estate professional you intend to be.
Feature high-price homes that you’ve helped clients buy or sell. This can add to your credibility and encourage other luxury clients to seek you out when they’re considering a home purchase or sale.
Talk the talk and walk the walk. Tailor your message to high-end clients, and ensure that the content on your website (and out of your mouth) matches the kind of things that luxury clients would be concerned about. Learn what their pain points are and explain how solve the unique problems that come along with the luxury lifestyle. Speak the language of luxury.
4. Show Off Your Real Estate Savvy
As we said above, high-end clients care about details. If you want to convince them you’re the right person to sell their home, you’ll need to expand your knowledge base.
Do Your Research
Take market research up a notch by being a luxury real estate expert. Here’s what you’ll need to know:
- How many homes are available in your target market (including pending, sales, expired, and FSBOs)
- Details about the neighborhood (schools, popular shopping destinations, hiking trails, equestrian trails, etc)
- Information about other properties for sale in the area
- Amenities (Golf courses, country clubs, tennis courts, etc)
- Features unique to luxury homes or high-end historic homes
Take time to read your prospective clients and talk about things that they’ll be personally interested in. For example, if your client has mentioned enrolling his children in a private school, be ready with recommendations and stats. Any chance you get to show off your knowledge, do it – and if you don’t have a ready answer, take it as an opportunity to do more research.
Upgrade Your Standing in the Real Estate World
It should come as no surprise that, since luxury real estate is in a class all its own, there are luxury-specific real estate agent designations.
Here are a few of them:
- Luxury Homes Certification (LHC)
- Accredited Luxury Home Specialist (ALHS)
- Certified Luxury Home Marketing Specialist (CLHMS)
Each of these designations will show clients that you’ve attended luxury-specific courses and are knowledgeable about luxury homes and clientele.
Your Organization Skills Should Be On-Point
Part of being a great communicator means being organized. You (or your TC) should be able to pull up information for questions in an instant, rather than asking if you can get back to them.
There should be several systems in place to ensure that the process goes smoothly, whether you use a transaction management system, a transaction coordinator, or a company like Close Concierge that equips your transaction coordinator with plenty of transaction management systems at their fingertips.
Your organizational skills could mean the difference between closing that luxury deal and putting a large commission in your pocket or flubbing it and losing the commission – so having someone on your team to provide that extra service can be invaluable.
5. Don’t Be Afraid to Do the Work
The idea of making massive commissions is tempting – but the truth is that it’s going to take a lot of work before you can get your first luxury commission check. Here are some of the things you’ll need to do on your way to the top.
Provide Value to Your Prospective Clients
Luxury clients love to learn. You can take advantage of that by offering a course about real estate. This will do two things: it will more firmly establish your reputation as an expert on real estate, and it will provide you with face-time with potential clients.
Use the popular structure for in-person workshops and conferences: share different ways that luxury clients can solve the problems unique to them, but withhold some of the details and action steps about how to accomplish the solutions. End the workshop with a CTA for prospects to set up a meeting with you if they need more assistance.
You may not set up any meetings doing this, but you’ll have established yourself as a reputable authority, and you’ll stay top-of-mind for prospects.
Have Realistic Expectations at the Start
The likelihood of you earning commission on your first try out the gate is low. Most luxury agents started out bringing other luxury agents coffee, running errands, and doing other menial tasks before they began to make a name for themselves.
Don’t feel like you’re too good to work alongside other luxury agents who have already established themselves in the luxury real estate sector. The experience and reputation boost are well worth it in the long run, even if it feels like you’re spinning your wheels now.
Get Creative with Your Listing Options
As we stated earlier, luxury homes take much longer to sell. You can capitalize on this by going after expired luxury listings and FSBOs rather than chasing down the luxury listings that are hot off the presses. Prove to your discouraged prospects that you’ve got the drive and the polished demeanor required to find a buyer.
You can also look to new construction as a great starting point on your way to the luxury real estate world. Developers can be easier to convince than luxury buyers, and once you’ve successfully sold one of their homes, they’ll be more apt to use you in the future. New construction can give you a foot in the door.
6. Upgrade Your Closing Gifts Game
Luxury clients are savvy – they know the inner workings of the real estate world nearly as well as you do, which is why you’ll need to set yourself apart by putting more time into your real estate business. When the sale closes, your diligence should continue to impress.
Many luxury clients know that it’s good etiquette for agents to spend 1%-5% of their gross commission on a closing gift. Most agents spend between 2%-3% of their commision on closing gifts. To reuse the above example, you would only spend $54-$270 on a $180,000 home – but when your commission goes up, so does the value of your closing gift!
If you sell a home for $1 million, your closing gift should be anywhere from $300-$1,500, and if you sell for $4 million, it’d be between $1,200 and $6,000. (That’s a lot of cash!)
Obviously, there’s a huge difference between your average closing gift and the type of closing gift you’d be expected to give to a luxury client.
Ideas From The Close
If your luxury client lives in a historic home, get them a custom house history poster or book. Luxury clients love individuality. They want their agents to be a step above the rest, and they’ll love knowing what makes their historic home unique. These gifts can be pricey ($750-$5,000), but that’s part of what makes them amazing luxury gifts for high-end clients.
Another popular gift for luxury clients is “anything from Hermes,” according to Emile. He spoke with Manhattan luxury agent Philip Scheinfeld, who said that luxury gifts from Hermes and a nice dinner to celebrate the closing are his go-to gifts.
Along the lines of Hermes, another company that’s a hit with elite members of society is Tiffany & Co. Manhattan agent Alan Levy usually chooses a Tiffany ice bucket and key chain – but you can move the price point for your gifts higher based upon your commission.
Ideas From Evabot
Satwick Saxena has unique ideas for luxury clients as well. Here are some of the best ones from the list.
A lovely outdoor bench is a great addition to any spacious and landscaped backyard. It encourages the new homeowners to enjoy the outdoors, and gives guests a gorgeous place to relax, have tea, or spend time poolside. “Plus, it won’t take up any space in their house, so no need to worry about not matching (the) furniture,” Satwick writes.
Custom house portraits are a nice way to send a personalized gift that your clients will actually enjoy. You can commission a portrait of your luxury clients’ family in front of the home, or you can feature the home itself in the portrait. “This one’s a perfect decor item, a little personal, professional, and extremely gorgeous,” says Satwick.
A Transaction Coordinator Can Get You There
You may have noticed that the vast number of duties required of luxury real estate agents aren’t possible for typical agents. Average agents are typically so busy taking care of all the moving parts of a transaction that they don’t have time to enhance their knowledge and research as much as they’d like to. That’s why it’s so helpful to have a transaction coordinator on your team who truly understands the process.
A transaction coordinator can take care of the minutiae of the transaction so you’ll have time to do a deep dive into the luxury real estate market. Transaction coordinators ensure that you always look like a rock star agent because they’ll be available to answer any questions your clients have. Our transaction coordinators are even better-equipped than other TCs because they’re available after-hours and on weekends.
Close Concierge, At Your Service
We pay close attention to details, and top-performing luxury real estate agents love the service we provide. We’ve studied top-performing service agencies, always aspiring to provide white-glove transaction coordination for our clients.
Unlike other TC services, we don’t allow anything to slip through the cracks. We take care of transactions from start to finish with the level of care that you’d expect from a company with “concierge” in the name, and we do it for a flat fee of $3,500 a month.
Want to start experiencing white-glove transaction coordination right away? Then sign up for a demo today!