The Wrong Way to Get Started in Luxury Real Estate

Hello luxury Real Estate Agents. The questions keep coming in by email and during my calls with people who bought my book. As you know, a 20-minute one-on-one phone consultation comes with the purchase of my book Selling Luxury Homes. So, don’t forget to fax in your application to schedule your session.

What’s amazing to me is that 9.5 out of 10 times the question I get is this: “Jack, I want to break into the luxury market in my area, but there’s this one person who has the high-end sewn up. He or she’s been at it for 20 years, knows everybody and belongs to all the right clubs. How am I going to break into my luxury market?”

Breaking in to the luxury market is a little bit of a process and it’s going to take some work. It can be done however. There is a right way and a wrong way. Today let me tell you how some agents try it; what I would call the weak way in. Next week, I will spend time on what I recommend as the correct way. We can learn from both approaches.

• Overprice your first luxury listings: take them at any price the seller suggests any number you can dream up that will get the seller to sign with you. This will work even in the high end and you will get listings. I’ve seen agents list properties for $13 million that should be $5 million. Sure, they got the listing, but it’s probably not going to sell. Maybe they’ll get some activity but then again maybe they won’t. But what you’re guaranteed to get is a loss of credibility.
• Establish a beachhead of their luxury market by working for a lower fee. Understand however, that luxury does not compete on price. Have you ever seen a Porsche ad where they talk about how they are more economical than a Ferrari? Luxury, by definition, does not discount. Further, luxury doesn’t compare itself to competing luxury. Have you ever seen a Bentley ad where they talk about how they are better than a Rolls? You want to build your value proposition and bring value to the proposition of selling or buying real estate. You don’t to that being a fee cutter coming out of the gate.
• Borrow and go into huge debt to make a big splash in print and other media. You will make a big splash, but there’s nothing to back it up. It could work temporarily, but it’s not the way to build a lasting impression in the luxury real estate business.

Next week is how we can create a plan to break into a market that is dominated by a strong player. It’s a process. It doesn’t happen overnight, but we’ll start with step one on my next blog.

Don’t forget to like me on Facebook and send those questions to jack@jackcotton.com and visit me at my website.

Make it a great week.


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January 17, 2012