Selling luxury homes can be challenging and often presents a range of unique challenges due to the various types of people and negotiations, which in turn can ultimately determine the success or failure of a real estate agent.
Below is a list of 8 challenges that real estate agents commonly face when operating within in the luxury home market and is accompanied with recommendations on how to overcome them.
High Competition and Market Timing
A Seller’s Market
The quantity of competition in your location’s area can greatly affect the chance of selling any property. An ideal situation for selling a property is known as a “seller’s market”, where there’s an abundance of potential buyers and only a few sellers within the local market. This situation provides you with the upperhand in pricing negotiations and can significantly increase your property’s selling close rate. In some cases, you’ll even see luxury real estate auctions in this kind of market.
A Buyer’s Market
However, the amount of competition becomes a problem when there are a lot of sellers but only a few possible buyers. There will be a tough competition, even just earning and capturing the buyer’s attention. This is called a “buyer’s market” and your chances of a successful sale can reduce dramatically.
It is very important when selling a home to study the local market first. This can easily be done by going through all the properties listed near your area and taking note of the number of local buyers and sellers.
If you see that the local market is a buyer’s market, you can perform research on your competitor’s listed properties and find out how you can make your listed property stand out.
Dealing with Seller’s Remorse
Seller’s remorse is the feeling of doubt or “cold feet” when selling a property. This can be felt as early as during negotiations and often leads to panic and unwillingness to finish the sale.
Interestingly this can happen more often if the seller has an emotional connection to the listed property.
To overcome this, it is very important to always keep in mind why you are selling the property in the first place.
Remember that this is your business decision and you must do everything that you can to not let your emotions get in the way of making a successful sale.
Knowing the Right Price to Sell Your Luxury Home
In the luxury home market, price can be a big factor in attracting potential buyers. Listing your home at a significantly higher price would cause you to attract much less potential buyers. If it becomes too obvious for buyers that the price is too high, it may come across that you’re trying to take advantage of them.
Selling at a lower price is also problematic. Your property may come across to buyers as having something wrong it and could cast doubt on potential buyers.
This is a unique problem to the luxury home market because for most potential buyers, money is not a problem, they’re simply looking for the best property for themselves.
Firstly it’s advisable to consult with a professional appraiser so that you can easily establish what is a good price for your property. A properly priced property on your listing will portray a sense of professionalism to your audience, helping you to attract more potential buyers.
It is very common for potential buyers to offer a significantly lower price when you’re selling a property. Some may even be very good at doing this that you may not even notice that this is happening before it is too late. This is especially common with luxury home sales, as the price of these homes are usually very high.
There are a variety of ways that a potential buyer can do this. The most common way is with them offering a lower price with a reason of the property not being in optimum condition. In these scenarios, it would significantly help if you have your home priced via a professional appraiser.
This would give you confidence in countering a low offer because your price has been effectively priced by a professional.
With the modern age, the internet is increasingly becoming a larger part of our lives. In fact, the number of internet users in the world has continuously grown from 3.7 billion in late 2017 to 4.1 billion as of December 2018. This is especially true when it comes to marketing.
In fact, by this year, mobile will surpass TV as the medium that attracts the attention of people longest, which makes online marketing very effective.
Also, potential buyers may first go to the internet when trying to find a property to buy. Getting their attention this early can significantly increase your chances of successfully selling your home.
The best way to utilize the internet in selling your property is to use listing portals such as Zillow, Homesnap, and Zoocasa. It would also help if you will be able to launch a neighborhood website or blog to be able to reach more potential buyers.
Working Off Hours
Potential buyers usually have day jobs so, more often than not, they would want to talk to you during the evening and during weekends. It’s essential you seamlessly streamline the sales and negotiation process with them by being flexible and adjusting your schedule to suit them.
Continuously Changing Market
The luxury home market is continuously shifting, moving and evolving along with the needs and wants of potential buyers. It is imperative to keep up with the latest industry trends and shifts to stand out and not be left out by your competition.
“The Report: State of Luxury 2019,” published by Coldwell Banker Global Luxury, is a very useful resource and provides an annual comprehensive review of the top luxury “Power Markets,” with landmark listings and luxury property trends among the ultra-high net worth population across North America and around the globe.
Modern advertisers are now also utilizing high-tech 3D or virtual reality tours and mini movies to highlight the new trends and features of luxury homes.
Dealing with Rejection
Dealing with rejection is one of the biggest challenges that real estate agents must face, especially in the luxury home market. Most of the time, you will be selling high-value properties that are difficult to sell.
You will definitely face a lot of rejection first before making a successful sale and it is very important to keep your composure whilst continuing to work hard after every rejection. Always remember to ask why, treat rejection as a necessary step and practice overcoming objections with the SPIN selling technique
Article written by Phoenix & Partners a Chartered Surveying Company from the United Kingdom.