How to Master the Luxury Market of the Moment
Between the record-low interest rates, school closures, and the rise of work-from-home employment, many current and aspiring homeowners are ready to invest in a more spacious property outside of the hustle and bustle of the city. This presents a huge opportunity for the luxury real estate market, and in a recent livestream discussion led by Brady Sandahl of Palm Springs’ Brady Sandahl Real Estate Group, luxury agents from all across the country provided insight into what’s going on in the luxury market of the moment and how to seize it.
Second Homes Are in Vogue
When the Bay Area became one of the first to mandate stay-at-home orders, many of San Francisco’s wealthiest residents took that as an invitation to seek shelter in a vacation residence. According to Debbie Sharp of The Sharp Group, whose territory ranges from the northern tip of San Francisco down to Silicon Valley, a good 50% of their luxury clients relocated to a secondary home once quarantine measures started taking place.
Sandahl identified three reasons for this trend:
- People who can work from home are trading in high-density areas and long commutes for more affordable and remote neighborhoods that will offer a better quality of life.
- Clients who want to satisfy their wanderlust without stepping foot on a plane are buying second homes that are within a two- to three-hour drive from their primary residence.
- People want to have their entire family in one location, under one roof, and with access to their own amenities rather than have everyone divided into multiple hotel rooms and left wondering if the hotel amenities will be open or not.
Make Luxury Accessible
With price points ranging from several million to five-hundred thousand, the luxury market is actually broader than many clients think. The key is helping your database see their options. According to Sandahl, “It starts by asking the client a series of questions to further understand their motivation as well as learn what features and/or amenities are most important to them.” Beginning with the three motivations outlined above will give agents a good idea of the square footage and location the client is looking for. Once that’s established, agents can start discussing fun stuff like wine cellars, swimming pool shapes, and outdoor cooking fixtures. Most clients who are accustomed to the limited square footage of their metro area will be delighted to discover what features they can afford by venturing outside of their city limits.
Part of helping your clients realize what fits their budget is knowing the numbers, and not just asking prices. Staying on top of interest rates, the stock market, unemployment projections, and all of the other data points that dictate the ebbs and flows of our economy will allow you to address any concerns your clients may have as they move toward a purchase. As Jeannette Spinelli of the Spinelli Residential Group in Austin, Texas, suggests, it’s all about establishing the right dialogue. “If you can show the data, articulate it, and convey it in a sensible way, buyers and sellers are able to get out of a fear-based mentality and move into action.” In times of uncertainty, transparency and trust go hand in hand. Agents who win their clients’ trust will also win their business.
Work Your Referral Network
One of the great benefits of working with a global real estate franchise is the ability to network with agents from all over the country. That being said, you can’t just blindly point to a map. “You have to know your feeder markets,” warns Christine Battista, who co-owns The Battista Team with her husband Carl in the Denver, Colorado, area. “It’s key for referrals versus reaching out to markets you hardly get anyone from.”
Once an agent establishes their feeder markets, Sandahl suggests utilizing the KW Referral Platform in Command as well as the KW Luxury International roster. But don’t forget to tap your clients for referrals as well.
“We have great success playing the ‘5×5 Game,’” Sandahl explains. “We call 5 current customers, 5 past customers, 5 people in our sphere, 5 local agents, and 5 out-of-area agents every day. Additionally, sending virtual tours of our listings to our feeder markets as well as networking with KW agents nationwide have also helped us generate one referral a day.”
Whether they’re at home, on a boat, or boarding a private jet, “luxury clients are constantly connected to their devices,” Sandahl stresses. It’s for that reason luxury agents must also be tech-enabled agents. From the ability to search and share properties from all over the country in the new KW App to an all-in-one platform like KW Command, agents have to know how to keep interactions mobile. Since the beginning of the pandemic, Keller Williams has been rolling out software updates on a weekly basis. Between the Video Tour Request feature in the KW App, the ability to seamlessly send and receive text messages directly from Command, and the constant stream of new marketing templates being added to Designs each week, it’s never been easier for luxury agents to interact with their clients where they spend most of their time: on their phones.
Relationships Are Key
While this may seem like an opportune time to enter the luxury market, it’s important for traditional agents to understand the mindset of a luxury client. “It’s about deep, deep relationships,” notes Seth Levin of NYC’s Levin Kong Team. “You’re not trying to get 400 people into an open house. It’s about forming a deep connection with one person. Once you have the trust of that individual who’s connected to a larger group of high-end people, all of a sudden you’re there, and you’re not buying your way in. You’re being your authentic self, and then you’re in the group.”
Just how do you earn that trust?
Sandahl suggests following the 4 Cs: care, curiosity, consult, and close. “We start every call showing we care. We ask a series of questions to discover how they are and where they are, we provide some data to let them know what is happening around them, and we close the conversation by offering and/or scheduling a next step.”
Sandahl’s 4 Cs in action:
- Care: <Client name>, how are you?
- Curiosity: Where and how have you been spending the last few weeks? Are you able to work from home? Do you have any plans to travel this summer?
- Consult: Would it surprise you to know that people like you are buying vacation homes right now? May I explain what they are buying and why they are buying them? What changes do you want to make to your own real estate Monopoly board?
- Close: Can I match you to the best options in this market OR match you to the best agents in any other markets you are considering?
Agents who help their luxury clients find the right steps for navigating the real estate market of the moment are likely to remain in their circle of trust for the long haul.