Luxury Real Estate Marketing
Real estate marketing agents who currently work with luxury listings or want to start specializing in this area know that it exists in a league of its own. Globally, high net worth individuals (HNWIs) are forecasted to triple in wealth from 2015-2025, which means these individuals will have more financial power than ever before and will have unique needs and expectations when selling a home. Agents that want to effectively gain leads for luxury housing must practice a combination of skills and relationship nurturing that begins with understanding the mindset of HNWIs.
The First Step: Be a Great Agent
Perhaps more important than proving an agent can sell a home is proving that the agent is trustworthy and honest. In financial advising, it’s been shown that HNWIs value these two qualities MORE than past investment performance or credentials. The right qualifications and results are still important, but they aren’t enough in and of themselves.
In practice, this looks like something called “trust heuristics,” according to MarketWatch. HNWIs have less time and resources to carefully monitor whom they’ve hired, so they assume that category leaders are the best while also taking into account the recommendations of their family and peers. Because of this, HNWIs trust their advisors more than the average client does and expect more from the relationship. We know that this level of trust exists between a HNWI and their real estate agent, too.
How to Build Trust
Because HNWIs have higher expectations of their agent than the average client, they anticipate that the selling process will happen with the least amount of stress possible. According to Rebecca Li-Huang, a wealth advisor at HSBC, who wrote a chapter on HNWIs in the 2017 book Financial Behavior: Players, Services, Products, and Markets, these individuals practice “emotional inoculation,” which is the outsourcing of investment decisions that induce anxiety.
To aid in decision making, agents that work with HNWIs should be competent in multiple disciplines that pertain to the market, like finance and technology. Additionally, it’s pertinent for luxury real estate agents to know the neighborhood and community like the back of their hand. The agent should be the local expert on the schools, restaurants and businesses in the area. Luxury real estate agents also have a keen knowledge of the demographics of the community, local organizations, and general resident sentiments and lifestyles.
Luxury agents should also practice quick turnaround on communications and a high level of attention to detail and efficiency. No matter the size of your brokerage team, it should be clear that the agent has sold luxury houses before and is good at what he or she does. This, along with great past relationships with clients, will help build a HNWI’s trust.
Real Estate Marketing to High-End Clients
Building a great reputation by being a great agent is a crucial step in attracting HNWIs, but marketing is equally important. A reputable, honest, and knowledgeable agent would get lost in the mix without great outward communications to back himself or herself up. HNWIs may find an agent through a friend or credentials, but it’s crucial that the agent is able to quickly prove that they know how to sell a property.
In luxury real estate, marketing materials will be particularly important. Outward marketing is the way that realtors will compare agents against one another, and the agent hoping to attract a HNWIs must prove their worth both online and offline.
We recommend high-end video as a great way to represent the homes of HNWIs on websites and social media. A comprehensive, beautifully-shot video works well for any property, but luxury homes are particularly suited for this medium. Investing in a high-quality virtual tour of both the inside and outside of luxury properties will show HNWIs that you have the expertise and capability to represent a high-end client.
Just as with online marketing, an agent’s offline real estate marketing strategy is representative of the way they will sell a luxury home. The agent should have a complete suite of printed collateral that includes images of previous homes sold, how they were marketed, and how they were priced.
An agent must prove that they can correctly price a luxury home so that it, in fact, sells. It’s one of the most important skills that a realtor working with high-end clients can possess. Pricing the home too high will ensure that no one purchases, but pricing it too low will devalue the worth of the property.
Accurate pricing will depend on location, comparable sales data, and the agent’s inside knowledge of the neighborhood. It’s true that pricing luxury homes is more difficult. There are less comparable homes and, often, unique features often found in these properties are only valuable to certain buyers. Although it’s a skill that often takes years to master, the agent that can prove they know how to accurately price a property from day one will differentiate himself or herself from other agents.
A Combination
The real estate agent that understands how to build a relationship of trust and honesty with clients and also represents their agency well both online and offline will go a long way in reaching HNWIs. High-end clients, once satisfied with results, are very loyal and likely to recommend a trusted agent to their other HNWI friends, as well as entrust the sale of future homes to the agent’s care.
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