What Affluent Buyers Need, and How You Can Give It to Them

Part II of our survey on upscale homes profiles luxury-property buyers and helps you identify their needs and how to serve them.

July 1, 1998

You probably have a crop of affluent buyers in your own backyard that you could turn into regular clients.

The trick is finding them and figuring out their needs.

To give you a perspective on the luxury market and characteristics of wealthy buyers, the NATIONAL ASSOCIATION OF REALTORS® conducted a joint study—Profile of the Luxury Real Estate Market—with Unique Homes magazine to examine the unique home market.

Here's a look at the housing needs and habits of moneyed buyers:

  • More than half—58 percent—of respondents want a larger home.
  • Neighborhood and price range are two factors that most influence the home purchase, with importance ratings of 4.32 and 3.18, respectively, on a scale of 1 to 5, with 5 being the most important.
  • The most important consideration for buyers when choosing a real estate professional is the salesperson's knowledge of the local real estate market, with an importance rating of 4.23 out of 5; second is the practitioner's professional designations, with a rating of 2.82.
  • The most important factor for sellers when choosing a real estate practitioner is the professional's knowledge of the real estate market, with a rating of 4.02 out of 5; next is previous experience working with the practitioner, with a rating of 3.53.
  • Top considerations in marketing a property, respondents say, are listing on the MLS, utilizing color brochures and print advertising, and providing exposure for the property beyond the local marketplace.

You're the Expert

Luxury homebuyers use a variety of information sources, but they think you're tops. Even when you aren’t their first stop, you're their most frequent stop, and they rank you by far the most important source of information.

Source
Percent Using Source
Importance of Source
(rating on a scale of 1–5, with 5 as highest)
Real estate professional
87
4.42
Open house
64
3.01
Friend, neighbor, or relative
63
2.73
Newspaper ad
62
2.70
Builder
57
2.33
Yard sign
55
2.24
Magazine ad
54
2.18
Online, Internet
47
1.58
Relocation company
39
1.54
TV or radio
37
1.08
Auction
32
1.03

Source: Profile of the Luxury Real Estate Market, April 1998

Where They Found Their Property

The majority of buyers say their first source of information about the luxury property they purchased was a real estate professional. Newspaper ads and yard signs were also useful in informing buyers.

First Stop Info Source
Percent of Respondents
Real estate professional
65
Newspaper advertisement
7
Yard sign
7
Open house
6
Builder
3
Magazine advertisement
2
Other
10

Source: Profile of the Luxury Real Estate Market, April 1998

How Long to Make a Deal?

Most respondents—60 percent—require six months or less to find their luxury property.

Search Time
Percent Who Searched
Six months or less
60
Seven months to one year
12
More than one year
28

Source: Profile of the Luxury Real Estate Market, April 1998

Luxury Buyer Snapshot

The typical luxury buyer purchases a detached single-family home that listed originally for $1.49 million and sold for $1.3 million. On average the new home is 13 miles from the current residence.

Average age:
47
Family status:
Married with one child
Household income:
$625,000

Source: Profile of the Luxury Real Estate Market, April 1998

Your Ticket Just Might be the Tennis Pro: 5 Success Tips on How to Get the Luxury Business

You don’t have to be born into wealth to market yourself to high-end buyers.

John Cotton says, “I wasn't a bit wealthy while growing up.” But he has managed to build a business, Cotton Real Estate, Osterville, Mass., working with luxury buyers on Cape Cod.

Here are some of his success strategies:

  • Build relationships with people who serve high-end buyers, because they’re in a position to refer you. They could be the local golf pro, the person who restrings tennis rackets, or the salesperson at the Mercedes or Porsche dealership. “I recently found a $3 million buyer through a guy who works at the boatyard.”
  • Take classes in taxes, surveying, and appraising so that you can talk intelligently about your marketplace. Build up a knowledge of what has happened in your market the past two years.
  • Improve the quality of everything you regularly do for real estate. For instance, upgrade the paper and print quality of all your marketing pieces and newsletters. Instead of just putting a mailing label on your envelope, use a handwritten envelope.
  • Write newsletters, newspaper articles, and press releases. Writers are perceived as experts, and the more you get published, the more you are perceived as an expert. “I write articles about the high-end market, and people who are interested in luxury real estate will read those articles and tie them to me.”
  • Locate your office among high-end stores or boutiques, and don’t make it look like a typical real estate office. “Our office atmosphere is that of a gallery and draws people as they walk by. Your office becomes one of your marketing tools.”

Elyse Umlauf-Garneau is a Chicago-based freelance writer and former senior editor with REALTOR® Magazine.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.

Related