How to Break Into the Luxury Real Estate Market
Once you have your real estate license, there’s a myriad of industry niches that you can pursue. One of the most lucrative niches is luxury real estate. Imagine listing a home for $10 million - wouldn’t it be nice to collect the 3% commission from that listing? This guide will outline how to break into the luxury real estate market so you can take your cut of this affluent niche.
Network With Other Luxury Real Estate Agents
“It’s who you know, not what you know.” Never is that saying more true than in luxury real estate. If you want to find success in this niche industry, you need to build a network - stop us if you’ve heard that before about real estate. But with luxury real estate, networking is one of the most important factors in making a name for yourself. Most successful luxury real estate agents start their journey by building their experience through a few years of hard work, high production, and networking, which allows them to connect with (and eventually join) an elite brokerage. Whether or not you join an elite brokerage in your quest to become a top-selling luxury real estate agent, your first goal should be to build a network that exemplifies your professionalism, expertise, and dedication to serving clients. Plus, a healthy network can net you referrals, which is crucial to your long-term success.
In addition to building your network, successful luxury real estate agents typically have a mentor. Beyond the guidance that most enjoy in this type of relationship, finding the right mentor may also help you to expand your network more quickly based on your mentor’s connections.
Luxury Agents Need To Be Excellent Agents
When you’re looking to work in the luxury real estate industry, you need to look and feel the part. If you show up to a luxury real estate listing looking like you just left the beach, you will struggle to make any headway - with that deal and in this niche altogether. In luxury real estate, you need to hold yourself to very high standards, down to how you dress and your general demeanor.
After all, people who are selling these luxury homes want to sell them at luxury price points, so they’ll need an agent who is at the top of their game. Think of it this way: High net worth individuals who can’t sell their $10 million home after two years might start to get temperamental. The longer it takes to sell their property, the more they’ll pay in inflated property taxes on a home they might not be living in anymore. Stated simply, you can’t afford to miss a beat with luxury homeowners. The stakes are high for them but even higher for you. To truly make a name for yourself, you have to deliver on everything from your marketing to your attitude. You need to be excellent.
Become a Luxury Real Estate Expert
To become a luxury REALTOR®, start by becoming an expert in your local market. First, you’ll need to take Pre-Licensing courses to become a licensed real estate agent. After passing your exam and finding your brokerage, start familiarizing yourself with your local market. Pay attention to details like how long luxury listings are listed and their typical price points. As you build your knowledge base and gain more experience, you’ll also have greater opportunities to find your real estate mentor.
Over time, you should structure your real estate marketing collateral and social media presence to emphasize your niche. Finally, to become a luxury real estate expert, you’ll need to find wealthy clients - either through your network connections or by getting creative. Perhaps there’s a popular coffee spot in town where the affluent nosh or a local country club teeming with wealthy golfers looking for their next home on the range. Keep your eyes open, dress the part, and be ready to strike up a conversation with potential luxury clients when the opportunity arises. Be sure to have one of your business cards on hand so that you can easily exchange contact information.
Did You Know?
Real estate professionals can highlight their residential luxury real estate skills by securing a Certified Luxury Home Marketing Specialist™ (CLHMS) designation. Your high-end clients will feel more comfortable choosing you to handle their million-dollar listing if you've proven yourself by earning this designation.
Update Your Personal Branding To Appeal To Luxury Clients
Luxury real estate is full of agents and REALTORS® looking to secure deals from the same limited pool of properties - which is why your personal branding is crucial if you want to stand apart from the crowd. But you need to think outside the box: Your brand needs to be instantly recognizable as luxurious. Look at the branding efforts of successful luxury agents in your area - what do they emphasize, and what are they missing? Your personal branding could fill that role.
Also, consider to whom you’re marketing. For example, if affluent clients in your area tend to have families, incorporate in-depth knowledge of local private schools into your brand. Then, choose a sleek aesthetic and stick with it. Every aspect of your personal brand, from the way that you dress to the content you produce for your website, should maintain a cohesive image of excellence.
Start With Co-Listing and Co-Marketing Luxury Listings
While luxury real estate boasts impressive listing prices and high commission, there are fewer listings than you’d find in traditional residential real estate. As such, luxury real estate listings are difficult to land. However, if you pair up with another luxury real estate listing, you’ll become more credible. Naturally, if you co-list and co-market a sale, you’ll split the commission with your partner. But where you miss out on the full commission, you’ll build up your portfolio (and your name), so it’s worth it in the long term.
The other benefit to co-listing and co-marketing is that marketing costs for luxury listings are much higher than traditional residential real estate listings. If you have another agent to split that cost, your wallet will thank you. And any loss you may take in splitting the commission will be offset by the split marketing costs. In the end, it pays the most for luxury real estate agents to co-list and co-market - both figuratively and literally.
Selling Your First Luxury Real Estate Listing
Once you co-list and get a feel for how the luxury real estate market works, you’re ready for your first listing. The first luxury listing can be daunting, which is why we recommend you co-list before jumping in headfirst. A good marketing strategy for your first listing is to hold an open house. Open houses are one of the best ways to reach luxury clients. Since these are high-end homes, you shouldn’t have to do much to get them ready. Still, you should find a partner with whom to conduct the open house. If you have a partner, perhaps one who has been in the luxury real estate market for a while and developed a name for themselves, they can pass on their wisdom regarding how to work with luxury clients.
Benefits of Being a Luxury Real Estate Agent
- Joining a growing industry could translate into a long real estate career
- Having the opportunity to earn higher commissions
- Getting the chance to work with international homebuyers
- Being able to hang out in mansions
- Establishing a portfolio of high-roller clients
- Having the flexibility to structure your schedule based on your needs
- Touring luxury property after luxury property
- Unlocking the opportunity to improve your marketing strategy with high-quality photos/videos of high-end real estate
By following our tips, you’ll be on your way to becoming an established luxury real estate agent and enjoying the benefits listed above. It’s hard work, touring jaw-dropping mansions all day, but someone has to do it - and that someone could be you!