Laurie Moore Moore, The Institute for Luxury Home Marketing 1

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1 Game on! Maximizing your success in the luxury market! A special presentation For The Illinois Association of Realtors Guest Speaker Laurie Moore Moore What is the definition of luxury? Depends on the marketplace Top 10% of an area s home sales in the past 12 months But never less than $500,000 How big is the national luxury market? Home sales in the $500,000 and above range represent 12.7% of total home sales (an increase in market share) Million dollar+ sales represent about 2.5% of total sales nationally Source: NAR JULY 2014 Why target the luxury market segment? It s profitable! Profitable segment Luxury market is outperforming the market in general January 2014, Existing Home Sales What drives the luxury market? The number of wealthy households The number of wealthy from millionaires to billionaires is higher than ever before U.S. City Rankings Based on Number of Ultra High Net Worth Individuals* 1. New York City San Francisco Los Angeles Chicago Washington D.C Houston Dallas Atlanta Seattle Boston Philadelphia 915 $1 million+ sales in Midwest up 66.7% Source: NAR, 2014 Source: World Ultra Wealth Report *Those with $30+ million in investable assets Marketing 1

2 Succeed in a competitive market? Competence and Confidence A few key things to know Terminology Tips Magic Questions and Scripts The Principle of Sacrifice Understanding the luxury home buyer and seller Terminology matters Listing Presentation? Marketing Consultation Appointment Comparables? Relevant Properties Magic Questions Qualifying your prospect How do you prefer to pay for the property you are considering buying at the $ level? Magic Questions What are your pricing expectations? As I begin my pricing research, is there a particular property sale you d like me to pay special attention to? Magic Questions Smoke out the deal killers Is there anyone you ll be turning to for advice and counsel as YOU make YOUR decision to buy/sell? Super Scripts What to say when your competitor tries to buy a listing with too high a price I understand that the higher price, which the other agent is suggesting, sounds really good. However, the question a savvy seller like you will want to ask is whether the other agent is doing what real estate professionals call, buying the listing. In other words, does the agent really believe that he or she can sell the home at or near that price, or does the agent plan to just ride the price down, down, down over time? My recommendation is to price it right from the start. However, if you truly want to try the other agent and the higher price, test the other agent s commitment to that price by asking if he or she would release the listing to me, if at some point the price is reduced to $, the list price I m recommending. If the answer is no, that s a sign that the agent may not believe he or she can sell your home for more than I m recommending. If I were a seller, that answer would make me uncomfortable Marketing 2

3 This strategy hurts you several ways. The listing becomes stale and identified as overpriced, showing activity drops, and low ball offers may come in. The time it takes to sell your house goes up. Would you be willing to test the other agent s commitment to the higher price by asking them to agree in writing to release the listing to me if the price is reduced to $? Super scripts What to say when your seller says, Your competitor will list it for a lower fee! Negotiating your professional fee is about demonstrating the value you bring to the transaction. Your competition will do it for less. That s interesting. This didn t strike me as a discount property and I m not a discount agent looking to bring you a discount buyer who ll make a discounted offer. An advertising & marketing principle no one teaches us in real estate The principle of sacrifice Backyard removed for your convenience For example, take an upscale new downtown condo that has the same floor plan as other units plus a big negative My listing is like others in the building, only worse! Look for the marketing story POSITIVES Desirable new building Premium location Open floor plan Top of line finish out European appliances Espresso bar in kitchen Least expensive unit Concierge service Building has valet, library, party room, gym Buyers: young professionals NEGATIVES Undesirable view the brick wall of the building next door. We ve had lots of showings, but no interest. Prospects complain there s no view! 26 Look for the marketing story Use the Principle of Sacrifice Don t waste time attracting prospects who want a view. Sacrifice them! Target prospects for whom view is not an issue Sometimes the negative is your best hook Marketing 3

4 Tell a VALUE story in the headline and the sub headline Willing to trade view for value? Enjoy a downtown condo in a premium building For 10% less than your neighbors paid for the same unit (and you thought you couldn t afford this address!) Continue the story in the copy Snap up this stylish ground floor condo and you ll enjoy the same desirable downtown address, wonderful floor plan, upscale kitchen with espresso bar, concierge service, valet parking, professional gym, library, and party room as your neighbors do. But you will have paid less. They may have a better view, but you can use some of the dollars you saved for fabulous window coverings and still keep money in your pocket. Etc The negative can become a reason to buy Small yard, busy street, steep elevation Example Waterfront without the water Buy before the rain returns! The price of this lakefront beauty will rise with the level of the water The rains will come, buyers will rush back to the lake, and home prices will rise even faster than the level of the lake. Now s your chance to make the buy of the year. The water level may be low, but so are interest rates. Enjoy this home s fabulous inside features today. After the storm clouds gather, you ll love outdoor lakeside living. Bring your suntan lotion, water fins, jet ski, and party boat you ll need them. (Go on to highlight the home s specific features.) A few things to understand about your very successful clientele 1. They believe competency of a service provider is more important than friendship and they make choices accordingly Are you honest, authentic, and competent? Do you have necessary skills, expertise, and intelligence? How are you establishing competency in your branding and demonstrating it in your service? 2. They expect more knowledge and expertise from you and demand better performance and a higher level of service They can educate themselves more easily and are more knowledgeable You must know more to be perceived as an expert They evaluate your service compared to the top luxury experiences provided by other luxury product and service providers 3. The affluent want to feel valued and that you understand their wants and needs Listen, listen, listen Special needs? Example: A private sale Provide service that improves their lives Make them feel special and important Real Estate Lifestyle Concierge Service You get a client who is London based and they're coming to Malibu to prospect for a new home. When they come out, they don't know where to stay or what to do for fun. We set up an experience for them. If they're bringing their kids, we arrange for nannies. Or we'll arrange their hotel stay or for a house to lease while they're looking. We may suggest local attractions, or even book an all day excursion via helicopter to an exclusive golf resort. We help them with their car service. And then we help them find a home they love. Story by Mary Umberger in The Chicago Tribune Broker: Monarch Estate and Homes 38 Marketing 4

5 4. Want clear communication and a transparent transaction where they are fully informed and there are no big surprises. ASK: How would you like me to communicate with you and how often? They are early adopters of technology and online big time! 5. They may not feel rich. They compare themselves to those who are richer Number of 000s less important than lifestyle comparisons How much money does it take to be rich? They don t want to be called rich or wealthy Use very successful instead The folks flying first class aren t thinking, Glad I m not in coach, but My friends get to fly private. WSJ 6. They are looking for time savings My time is valuable, don t waste it! I want all the information and I want it NOW. Online is my time saving tool Use online marketing creatively Property specific websites Mini movies 7. They are value conscious. Doesn t always mean lowest price. They are seeking worth. How can you communicate the value of your service? How can you identify the value a property offers to them? What s their buying motivation? Example: Is a winter retreat a hook to attract children and grand children for a family visit? Worth relates to Lifestyle Matching! Another way to create value. They want added value experiences How can you make it better, easier, faster, less stressful, maybe even more fun? And then be sure to stay in touch! 8. They buy stories! Stories to tell about your listings Lifestyle Craftsmanship and design excellence Exclusivity (the rare or unique) Innovation Provenance (history) or innovation What can you say about a property which other competing properties can t say? About the bathtub I had it hand carved in Italy. The builder found these huge blocks of marble at an Italian quarry. Then, found a master carver, whose day job involves carving statuary for a church in Venice. It s truly a one of a kind tub, a piece of art. Getting it from Italy to the house is another story 9. Whispering wealth has replaced the desire for ostentatious show for many. Instead Artisanship, exclusivity, and connoisseurship have risen to the fore. But there will always be some Flamboyants. The idea is to no longer rub status in the face of those without it, but to be noticed by those with the same superior taste. Luxury Trend Report Logo less luxury 58 Marketing 5

6 10. International buyers are more important than ever International Growing in Importance A few resources you need to know: International Consortium of Real Estate Associations (ICREA) International Real Estate Federation FIABCI Real Estate Professionals networking with others around the world. Certified International Property Specialist (CIPS) designation from NAR ProxioPro International MLS for your luxury listings and agent profile (FREE to our members) Gentle Reminder To take your success to the next level You must decide to go there! Decide to be a luxury success and have a plan Decide to be a true expert who knows the market and offers outstanding service Quote. People who want milk shouldn t sit on a stool in the middle of a field in hopes that a cow will back up to them! Decide to sign up for The Institute for Luxury Home Marketing s training course live or online. Closest LIVE class: Minneapolis, September 25 and 26 Class is first step in earning the Certified Luxury Home Marketing Specialist designation. Details: www. Luxury Home Marketing.com Marketing 6