In a famous quote from F. Scott Fitzgerald’s short story The Rich Boy, a character says: “Let me tell you about the very rich. They are different from you and me.”
Those who specialize in luxury real estate will agree, saying that, when marketing to wealthy clients—whether buyers or sellers—the tips, tricks and approaches can differ substantially when compared with other markets.
Marketing can include giving clients Hermès-styled boxes with customized iPads that detail the nooks and crannies, and the story of a property and its structure, rather than using a simple and generic one-sheet backgrounder. Or a multi-tiered website devoted entirely to the property and the client, using 3-D technology to show off highlights, rather than an out-of-the-box templated and cookie-cutter online presentation.
Sotheby’s International Realty Canada’s spring 2021 report showed Canada’s metropolitan luxury real estate markets are burgeoning. The report noted factors that have been pushing sales and escalating prices include the significant accumulation of cash during the pandemic, new demands from multiple generations of homeowners and buyers, and demand that has been pent up on both the local and international level.
Innovation, customization and truly listening to a client’s story: These are key, say experienced real estate professionals who specialize in properties in the $5 million and up range. While this is often seen as the benchmark for “luxury real estate” the definition differs depending on region and property type—a $5 million dollar listing could be a mansion in one market, or a hobby farm in another.
Indoor basketball courts, bespoke sneaker closets and more
“The key to selling luxury is understanding that it’s all about the client’s lifestyle,” says REALTOR® Janice Fox, broker of record with Hazelton Real Estate Inc., who has almost 30 years of experience selling luxury properties in Toronto. “It’s less about square footage and amenities, and more about knowing that your client is making a lifestyle choice.
“The client wants to tell you their story first, and you must listen to them in order to understand who they are,” says Fox. “These are people with very specific ideas about lifestyle and choices and for them, budget is not a priority. A luxury buyer buys because they want it, not because they need it.”
To illustrate her point, Fox describes a client she was serving who was seeking a property above $10 million. She listened intently. Among the features they wanted were heated floors everywhere, an indoor basketball court, a garage with proper turning radius for his plentiful luxury car collection and a walk-in closet that would properly showcase their son’s bespoke sneaker collection.
She found something that suited the client and everything looked great until they had their son inspect the bedroom and the walk-in closet that would house the boy’s sneaker collection. It did not suit the 12-year-old’s tastes so, in the end, the client walked away.
Another point Fox says is important to consider is there is always a family story, even when the client is single.
“They may be considering a penthouse that’s perfect for a single’s lifestyle but they want a dining room that’s the right size just so they can entertain their family occasionally on holidays,” she says. “There is always a family dynamic at play, I have learned, and it’s always something to keep in mind when learning the client’s story, in terms of finding or building something that best suits them.”
REALTORS® can help determine what the client really wants
Through a combination of experience and instinct, the savvy REALTOR® can help define what the buyer really wants. Sometimes, buyers don’t know exactly what they want, even when they think they do.
Fox had a family relocate from the West Coast to Toronto with a very definite idea of what they were seeking, but when she came across a high-end condo in the Yorkville area that she thought they might be interested in, she suggested it.
They loved it, even though it wasn’t what they had aimed to buy, and Fox’s real estate smarts resulted in a sale that appealed to the couple’s lifestyle even though they had not considered such a property.
Some buyers are looking specifically for building innovations and creativity in designs that can be edgy, so Fox works with hand-chosen designers who know her and the kind of luxury clients that she is dealing with regularly.
Be prepared to wow your client
REALTOR® and associate John Hripko specializes in luxury real estate in Calgary.
The number one thing a REALTOR® needs to do is know their client and then do what they can to wow them, Hripko says. He’s the one who delivered the custom iPads to clients. He also creates stunning, single-property websites.
“You’re not just selling bricks and mortar; you’re selling the ambience and elements of a home that they might not see right away,” says Hripko. “The elite consumer wants a story behind the home, and who better is there to provide that to them than me?”
After a recent $6 million sale, Hripko gave the seller after a 68-page hardcover book with photos of the house and the floorplans, which encapsulated wonderful memories of the house for the couple who had lived in it.
Marketing to a luxury client involves customization. If Hripko’s team is doing a client-purposed website that’s showcasing a property, it will also detail the boutiques and specialty shops nearby that will appeal to a client’s lifestyle.
“Luxury clients do not want run-of-the-mill offerings and they know how to make their own decisions. You can’t push them,” he says. “This applies to the next generation of buyers, too.”
Luxury is selling well across the country
In Toronto, the market is thriving
Sales of luxury homes in Toronto have been on the upswing, with those worth more than $4 million surging 157% year-over-year in the first two months of 2021. Five homes sold for more than $10 million.
Fox says the COVID-19 pandemic has put a temporary damper on foreign buyers of luxury real estate. “We are not yet seeing cross-border shopping at this point. Before COVID-19, we had a big interest for luxury penthouses but when they could not come here, it fell off.”
However, for the first time in the past 15 years, she says, the Toronto market will be offering very high-end new condo projects for pre-sale. “We haven’t seen multiple buildings in this category for many years, so it will be interesting to see if this sparks a lot of interest from local people and if it attracts high net worth buyers from offshore.”
There has been talk of a luxury home tax in Toronto but Fox doesn’t think it will deter wealthy clients from buying.
In Vancouver, views, outdoor space and green homes lure buyers
Anne Mainwaring, a certified luxury home marketing specialist with Sotheby’s International Realty, says privacy, smart features such as automated lights, music and blinds, as well as green homes and a lot of outdoor space are current trends in the Vancouver market. Sales of homes over $4 million were up 175% in the first half of March.
Neighbourhoods where you can find a combination of privacy and big properties are important to the luxury buyer, she says, and having a spectacular view can make it even more attractive.
Yet, even some buyers with deep pockets are beginning to see Vancouver as pricey. “Even though they may have $10 million to spend, and there are a lot of local people who can afford that price range now, they do watch where they spend it.”
Gains in Calgary and Montreal, too
Calgary is reporting an upswing in the luxury residential real estate market, with sales of homes worth more than $1 million spiking 119% year-over-year in the first two months of 2021. One luxury condominium valued at $1 million was sold.
In Montreal, residential sales of homes above $1 million increased 27% year-over-year in the January-to-February period, including two transactions with price tags of more than $4 million.
The secret to selling luxury properties?
The truth is there’s no secret winning formula. Seasoned real estate professionals will know that no two sales are the same.
When selling luxury properties it’s important to go back to basics. You’re not just writing a listing description, you’re telling a story. Some agents hire professionals to shoot high-quality short films for their listings. The films often include actors or models to help sell the fantasy.
When working with buyers, get to know your clients. Understand their lifestyle to uncover properties that will fulfil their desires. Remember, luxury buyers are driven by their wants. They might just want an indoor pool and a room dedicated to their cats.
Do you have experience selling luxury properties? Leave your tips in the Comments below.
