There’s a reason the luxury real estate market is considered a niche. There are more than 7 billion people on the planet, but only 34 million have a net worth over $1 million, according to Fortune magazine. This is a small group of highly competitive and demanding individuals who require an elevated level of customer service. It may seem glamorous and exciting to do business with the 1 percent, but it’s not exactly easy—and it’s definitely not for everyone. If you’re determined to break into the luxury market, be prepared for it to be harder than you think. Before you set out on this endeavor, here are seven reasons why you might not be suited for the high-end niche.
- You live sale to sale. Patience is a virtue you cannot lack in the luxury market. So, if you need a quick commission check, you probably won’t get it from high-end customers. Many sellers of moderately priced homes are looking to unload quickly so they can move on with their lives. But high-end property owners have a different mindset. They have the financial wherewithal to wait for the “perfect” buyer. If they get a lowball offer, they can reject it and afford to stay in the home until a better one comes along. Luxury buyers, too, can take months—if not years—to find the perfect home they feel is worth a multimillion-dollar investment. You cannot be desperate to get paid and serve these kinds of clients effectively. It takes a lot of skill, patience, and finesse to successfully sell high-end real estate. A deal rarely happens overnight.
- You present yourself as “everyone’s agent.” Nowhere is it more important to target your customers and tailor your services than in the luxury real estate market. High-end customers want to know you understand their world, so if you brand yourself as an agent who works with everyone, the message your ideal clients want to see will be lost. Your online and offline image—everything you do, say, or wear—needs to be relatable to luxury buyers and sellers. Your brand logo, social media profiles, website, listing photography and descriptions, head shot, business cards, and videos must have high-end appeal.
- You crack under pressure. Any real estate transaction is a nerve-wracking one, as for most people, purchasing a home is the biggest investment they’ll ever make. Now imagine how volatile the process can be when you’re dealing with the most expensive properties. In luxury real estate, you work with CEOs, celebrities, and other demanding clientele who are handling huge amounts of money in these transactions. If you can’t handle that kind of pressure, you will fail and risk a big dent in your reputation as an agent. It is essential that you remain calm and have a firm grasp of how to manage your clients’ emotions. That’s imperative in any real estate market, but particularly the luxury world. Negotiating over such a high-value piece of property can take weeks of heated discussion. Make sure to learn emotional intelligence skills before taking this on.
- You’re networking with the wrong people. The most successful agents surround themselves with the most successful people in their market. If you’re working at the mid-level of your market, for example, you don’t want to stop connecting with those who’ve helped get you there. But you do want to start branching out and meeting new people who can help take your business to a higher level. Align with a prominent luxury brokerage in your area, or network with bankers, accountants, and lawyers who deal with high-net-worth individuals. “Drinking the same water” as other luxury real estate agents is a starting point. You can’t expect to stay in the bubble in which you’ve become comfortable if you want your business to grow.
- You don’t speak the luxury lingo. To understand the high-end market, you must become an expert in the luxury lifestyle. If you appear unfamiliar with the types of finishes and fixtures luxury clients have come to expect, they’ll know you don’t speak their language. Get acquainted with custom home builders and remodelers in your area. They can help teach you what you need to know about the finer elements of design and other real estate categories. Also, following other luxury brands on social media can give you insight into how they speak to their ideal consumer. You also must learn about other elements of luxury living in your market. What are the private schools, fitness clubs, golf courses, and riding stables? Find out the costs for memberships and tuition so you can provide to your clients.
- You aren’t following best practices. Having a consistent message and knowing where to put that message out on and offline, for example, is a standard of success for all real estate professionals. But not everyone follows those rules. Luxury clients expect you to adhere to best practices when it comes to serving customers and showing up to do the job. You must have discipline and take specific actions daily to make the luxury market for you. Be consistently present at the type of events or open houses that luxury consumers would frequent. Make sure they see you often; it requires a significant time commitment on your part. Be disciplined about how you prospect online, too. Know best practices for your website, search engine optimization rankings, and blogging so high-end buyer and sellers can find you and have an enjoyable experience perusing your professional information.