Become a Luxury Real Estate Expert

The luxury home market, while tricky to infiltrate, can result in lucrative opportunities for motivated and patient agents

By Myrna Traylor

Luxurious properties, whether primary residences or vacation homes, can be awe-inspiring even for REALTORS^® who are used to seeing nice homes.

These homes—and their owners and potential buyers—can seem out of reach. But you might want to rethink that notion.

What classifies as a luxury home? The CRS Designees we spoke to for this article agree that there is no specific price point that denotes “luxury.” Rather it is a property that is valued in the top 10% of its market, or as Tim Kinzie, CRS, CEO of Montlor Luxury Realty in Cary, North Carolina, defines it, the top 1% of price categories in an area.

Beyond that, says Jack Cotton, CRS, an agent with Sotheby’s International in Osterville, Massachusetts, key qualities luxury homes share are location, quality and, most important, privacy. Even in densely populated cities like New York and San Francisco that have astronomical home prices in general, the truly luxurious homes will meet those criteria. “They have privacy in their own way,” Cotton says. “They have a private elevator, a door person or a big balcony overlooking Central Park, for example. They only see their neighbors from a distance.”

Kinzie and Cotton both entered the luxury real estate industry when they were just starting in the field. “I quickly learned that someone who’s 21 wasn’t going to connect with anyone, let alone affluent people,” Cotton says. “Because I couldn’t compete with those who had years of experience, I had to compete by developing expertise. I got a lot of expertise in the valuation area of real estate because that’s what people care about most—what is the property worth. And so, back then, nobody was really doing competitive market analysis, but I was doing a full narrative appraisal. That caught the eye of gatekeepers, and gatekeepers referred me to their clients.

“Anyone in the high end has experts for everything,” Cotton continues, “whether it’s medical, tax or legal, and they like to brag about their experts. You need to be seen as an expert.”

Kinzie started in real estate at age 27 and took a similar approach to cultivating high-end clients. “I have always thrived on building friendships and connections,” he says. “I was bold enough at 27 to get into luxury. I didn’t come from a luxury background, but I knew what I wanted. My first instinct was to develop relationships with people who actually have those things. Through osmosis over time, you start to understand the value proposition—what they care about and how to articulate ways you can support that.”

However, both Cotton and Kinzie are quick to say that anyone who wants to add luxury clients to the mix can do so at any time in their career.

Building experience

Many agents are hesitant about approaching a high-end client when they’ve never sold a luxury home before. But there are ways to overcome that.

“Get on a co-listing agreement with another agent,” says Kinzie. “If a person in your office has a good reputation, simply ask them if you could assist them on a deal, and make it very clear it will be worth their time. Do it for free. Do whatever it takes. That way, you have a credit to your name, and you can legitimately tell people, ‘I’ve done this before,’ and you’re not lying, which I think is really important to be sincere and not skip steps or deceive people.”

Top-tier management

Kinzie admits that establishing rapport with a high-end client can be different—and difficult. “The filter to get into business in the high-end market is finer,” he says. “It’s harder to get hired because they have more intelligent questions, and the things they care about are more nuanced. They’re going to do their due diligence to ensure you can do this right. But once you’re over that threshold, it instantaneously shifts from you being continually evaluated to being trusted. Because what they’re looking for is an adviser.

“Often, these people are at the pinnacle of their industry and are used to having advisers. So, what they really want is the ‘them’ of real estate—to hire a clone of themselves. The second they think you’re that, they’re not going to question you,” Kinzie says. “They’re going to ask for clarifications and so on. But it’s so different when you’re working with people where price is the main concern; trust is harder to establish because money is always the greater issue.”

Cotton says that the right client, especially one whose wealth is self-made, may be more likely to take you on with no experience because they enjoy seeing a bit of themselves in you. But then, you must deliver.

“Let them know you’re going to give them one-of-a-kind personal attention and not do anything except focus on that one property until it’s sold,” Cotton says. “Imagine if you were my first million-dollar seller, and I said to you, ‘I’m not going to take any more listings in your neighborhood or take any more million-dollar listings until we have an accepted offer on your house. I’m going to think about your house constantly. It’ll be the last thing I think about before I fall asleep at night and the first thing I think about when I wake up in the morning. I will be 100% focused because I want your house sold, so you’ll be so thrilled and happy that you cannot wait to refer me to your friends.’ How would you feel if I said I’d be that driven to get your house sold?”

Uncover our complete luxury education offerings by visiting CRS.com/catalogsearch and searching “luxury.”

Photo: iStock.com/Nikada