Selling the luxury homes featured in reality TV shows, grandiose social media accounts, and celebrity house tours is not as easy as one might think. Real estate agents specializing in the luxury housing market know how to market these properties as a home and lifestyle in one: an art deco desert oasis, a historical landmark in its own right.
In most markets, luxury homes start at $1 million. In cities like San Francisco, Seattle, or New York, where $1 million homes are the norm, luxury homes start at a far higher price point. Regardless of your market’s luxury price range, the general strategy to sell luxury real estate remains the same.
We spoke with a top luxury real estate agent for insight on how to sell a luxury home for the best price possible.
Partner with a top luxury real estate agent
Since there’s a limited buyer pool for luxury homes, real estate agents must precisely execute pricing, marketing, and negotiation to attract buyers and close the sale. Choosing a real estate agent who knows how to navigate these unique challenges is essential.
You can find top-selling luxury real estate agents near you with HomeLight’s Agent Finder. Share your property details, and we’ll match you with the three best real estate agents based on qualities like their average home price, list-to-sale ratio, days on market, and client reviews. Here are some of the most important qualities your agent should have:
A luxury real estate agent knows how to create a narrative about your property. This skill is essential because prospective luxury buyers are interested in more than just the property itself; they want to be wooed by a lifestyle, serenaded by a story, and bedazzled by a brand.
We spoke to a top luxury real estate agent with 21 years of experience, Denise Madan, who told us, “It’s all about the experience for a high-end home, the story you can create, even a name that captures the property.”
Madan creates a unique name for each luxury home that she sells. She asserts that an agent should go above and beyond to know your property and formulate a unique brand.
Hyperlocal and well-networked
Luxury real estate agents have Rolodexes full of luxury agents and high-roller buyers. They use their network and sphere of influence to find local and foreign buyers who may be interested in your property.
Your real estate agent can connect you with a professional photographer and videographer to showcase your home at its best. Digital marketing efforts should include tactics such as drone shots, short films, and Matterport 3D tours.
Precise pricing and negotiation skills
An agent’s ability to accurately price your home will help simplify the negotiation process. While initial training is important for accurate pricing, the experience that comes with this task is immeasurable.
Madan and her partner sell around 100 homes per year, and the sale price is always within 3% of their pricing. How did Madan become so gifted at pricing on target? Through her 21 years of experience.
In addition to experience pricing luxury homes, your agent must be a savvy negotiator. It’s not uncommon for sellers and buyers to negotiate personal property, such as luxury cars and furniture, into a deal. Your agent can help you determine what non-realty items of value could sweeten the deal with an on-the-fence buyer.
Highlight your home’s unique features
Luxury homes have distinct features such as home theaters, swimming pools, spa showers, tennis courts, outdoor entertainment spaces, and a wide range of upscale appliances.
These unique features make luxury homes challenging to price since there are not many other homes that an agent can use for price comparison. Agents use a Comparative Market Analysis (CMA) to calculate a home’s value based on recently sold, similar properties in the immediate area. While a CMA may still aid in the pricing of your luxury home, there’s more to it than in traditional home sales.
Accurately pricing a luxury home requires a thorough understanding of the current housing market, the neighborhood and location your home resides in, and, most importantly, how to account for custom property features.
Current housing market
Market conditions can sway the price of a luxury home by hundreds of thousands to millions of dollars. Prices of luxury homes have climbed steadily over the past year, making it a seller’s market. In a hot seller’s market, your home is less likely to require a drastic price cut, which the luxury market is notorious for during a less propitious market. For luxury homes, the market can sway a property’s price.
As with any home sale, location plays a significant role in pricing. The global COVID-19 pandemic has inspired some homebuyers to flee cities in favor of more secluded, natural locales. For example, Eagle County, CO, home to Vail Resorts, recently saw the highest-priced home sale in the county’s record ($57,250,000) and the highest total dollar volume in one month. Likewise, a January 2021 Market report stated that in sunny south Florida, the sale of homes over $3 million has increased for seven consecutive months. So, your home’s price is subject to a location’s changing popularity.
It’s all in the details
Your agent’s ability to understand how your home’s features influence price is paramount.
“If you have a home in a golf course community, and it’s overlooking the golf course, compared to a home that’s the same size lot without the golf course view, you could be looking at a $100,000 difference. It all comes with knowing the community and knowing your market,” says Madan.
Additionally, Madan shares that your agent should be fluent in the range of quality that exists in appliances, home fixtures, and materials.
Look for an agent who is a certified Pricing Strategy Advisor and has a wealth of experience in pricing luxury properties.
Update your home’s interior to reflect current trends
The majority of homes on the market benefit from staging, yet staging luxury homes is even more significant. NAR reports that staging in modest homes brings in an extra 5%. That’s a nice perk, but for luxury homes worth over $1 million, staging nets an extra 25%.
Professional stagers style your home to tell its story, which we know is essential in the luxury market. They’ll showcase your home’s best features to differentiate the property from its peers and make your home more memorable.
Reach prospective buyers with strategic marketing tactics
Excellent marketing tactics are critical, considering that 90% of buyers find prospective homes online. For example, consider the number of luxury homes purchased by foreign buyers who rely on online visuals. In 2020, foreign buyers spent $74 billion on homes 2020 — 8% of these homes sold for $1 million or more. For comparison, homes worth $1 million or more account for only 3% of all existing-home sales in the U.S.
Luxury real estate agents increasingly believe that a virtual home tour with a movie-like narrative can entice buyers to splurge. For instance, an agent showcased a luxury Bel-Air home in a Ferris Bueller-like movie trailer comprising infinity pool shots, outfit changes in an expansive closet, and a striking view of the Los Angeles skyline from the property’s lawn.
As powerful as a short film can be, keep in mind that directors estimate that real estate videos can cost anywhere from $5,000 to $30,000 to produce. A listing agent may cover the cost in their commission. Otherwise, the seller fronts the bill.
Photos of the highest quality can make your house sell 32% quicker than a house with low to average quality photos. For luxury homes, aerial drone shots are non-negotiable. A drone can provide a panoramic shot from 200 feet above your property. These images showcase the property features and surrounding location. Especially if your home is on a beautiful plot of land, a drone shot may convince an interested online buyer that it’s worth coming to see your property.
Luxury real estate agents also use Matterport to create a virtual 3D dollhouse. It touts itself as the most immersive way to experience a property online. Matterport reports that buyers are 300% more engaged with a 3D virtual tour than the traditional 2D imagery. Furthermore, 74% of agents share that Matterport helps them win more listings.
Practice patience as offers roll in
According to Madan, luxury homes are on the market for an average of three months. Last year, luxury homes spent a median of 58 days on the market compared to the 24 day average for the single-family home. (Although NAR estimates that the total time from listing to closing on an average home is closer to 70 days).
Of course, there are instances where luxury homes are on the market for 300 days or more, says Madan. However, she reasserts that the key to quickly selling your home is accurate pricing. In this hot seller’s market, Madan states, “If the price is right, they’re under contract, I’ll say, within two weeks. A lot of our properties are under contract within five days.”
Your real estate agent’s experience is everything
In sum, there is no substitute for an experienced luxury real estate agent. Find an agent who speaks the lingo, mingles with prospective buyers, has a creative marketing edge, knows the ins and outs of your community, and can accurately price your property based on its unique features.
Remember, your home represents a specific brand and lifestyle. Your agent should be able to help bring your home to life.
Header Image Source: (R ARCHITECTURE / Unsplash)