By Diane Hartley
Are you just stepping into the upper-tier real estate market, or are you already a successful luxury real estate professional? No matter your stage, the following milestones should be part of your strategy as they will help you achieve your career aspirations.
There are many incentives for a real estate professional to work with the affluent; however, it can seem daunting to find the time to scale your business so that it integrates with your current workload. Luckily, there are myriad opportunities for professionals to set themselves up for long-term, successful growth. For instance, as a member of The Institute for Luxury Home Marketing, you will be able to access a plethora of tools, strategies, training and coaching dedicated to this niche.
If you are still wavering on the decision, then consider using this simple equation to discover the financial benefit for yourself. You may be surprised by how few higher-priced sales are needed to increase your commission significantly—by as much as 40-50 percent. In most markets, this number is between four to six properties, priced only 30 percent higher than the current average in your market. If you are already selling homes at this higher price point, then scale up your business to sell homes 60 percent above the average, and you'll only need to add 2-3 new sales per year.
Example: If the current average sold price is $395,000 and a REALTOR® sells 12 homes per year, this would give a commission (based on 3 percent on the listing side) of $142,200. Now add four sales at 30 percent higher. The average sales price will be $513,500 for these four properties, equalling $61,620—a 43.5 percent increase in commission!
Below, we've given you a few suggested milestones to include in your strategy as you make your way towards your career aspirations.
Milestone 1: Understand Your Local Market
Analyze and understand what's happening in your hyperlocal upper-tier market. This is perhaps the most important thing that you can do. It will help you identify where the "sweet spot" lies in your market.
The sweet spot is the price band that has the most turnover in the upper-tier market and, therefore, the greatest opportunity. Start by drilling down what the price bands are in your market. Calculate the number of listings against sales in each band to determine where the highest ratio lies. Then analyze the demographic of the homes and property owners in this price band to establish who they are and what types of properties are in demand.
It is also important to understand your competition in this price band and determine what strategies you need to implement to differentiate yourself.
The Institute provides a step-by-step guide, in their online and live training courses, on how to leverage this information to maximize your success.
Milestone 2: Learn From an Expert
If you are stepping up into the next tier of your market, then consider learning from a seasoned expert. Note there are advantages for both parties, as all real estate professionals are open to expanding their network if it affords them an advantageous opportunity.
Build relationships or leverage existing relationships by connecting with established luxury professionals outside of your market who are listing or searching for a home in a community in which you have significant connections. Offering to hold open houses or connect with local homeowners you know are two great ways to open the conversation.
Another great strategy is to co-list your luxury property, especially if you are new to this price point. Learning the methods, strategies and skillsets of an experienced professional during the selling process is priceless. This also connects your name with a recognized REALTOR® and, by association, establishes a trust with other professionals. Giving up a little commission to gain a sale, to which you can put your name and leverage its success, is a small price in the long run.
Milestone 3: Become Recognized in Your Industry
You may find yourself with some good advice on how to scale your business, but the benefits of having a relevant professional certification against your name, such as The Institute provides, cannot be understated. The Institute provides the resources and knowledge necessary to be a member in the top tier of real estate agents and offers an effective program for both new and experienced REALTORS® alike.
Gaining The Institute's education certificate and attaining the CLHMS designation assures affluent sellers and buyers that you have the necessary skills and expertise to provide the service they are looking for. Real estate professionals with the CLHMS designation have documented performance in the top 10 percent of their residential markets, and a proven record of their expertise in the luxury home and estate market.
Milestone 4: Establish Your Brand and Communicate It Often
Don't underestimate the ability of good marketing to draw in the right clients. Ensure your marketing decisions are made from the perspective of both a marketing professional and a potential client. Once you've determined the experience you want to give your clients, it is important to have well-designed promotional tools that resonate with that specific audience.
This goes without saying, but is a great reminder: Be knowledgeable of the product you're selling, and do not underestimate the importance of online reviews and referrals. Affluent clients want to know that they can trust you—seeing positive reviews from peers can break down walls that impede trust. If you are someone who answers their questions and takes care of your clients, you will see the rewards.
At the end of the day, a luxury client will choose a competent REALTOR® over a friend. It is amazing to build your network and meet new people, but it will mean nothing if clients don't recognize you as a "professional" REALTOR®.
Milestone 5: Build the Right Network
It is critical to build a network that both brings you business and establishes your reputation. Grow your network strategically by understanding how to communicate and connect effectively. Relationships need to be nurtured, so it's important to establish your value. Ensure your network is diverse but relevant to your business. Your network must be more than clients—it must stretch the gamut of other real estate professionals, mentors, experts in their specific fields as well as sources that provide you reliable information and opportunities.
For instance, do you have relationships with private lenders and bankers that cater to the luxury market? "Working the room" on this front can greatly increase your chances of finding the right buyers, as private lenders and bankers can funnel those looking for a luxury home in your direction. This will save you an immense amount of time in the long run. Rather than just solely relying on direct contact with potential buyers themselves, go to the source and establish a good relationship with a private lender or banker.
No matter where you are on the journey, see these milestones as guides to help you on your path to becoming a top-performing real estate professional. Put in the work necessary to understand the upper-tier market, and you are sure to see the rewards.
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.