Maximizing Profit: Expert Tips for Selling Luxury Real Estate

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Investment banking powerhouse J.P. Morgan Chase defines a luxury property as one with a value in the top 10% of the housing market. The term is relative — the top 10% of home values in a high-priced city like San Francisco is much different than in Des Moines, Iowa. But regardless of the market, luxury homes have a number of characteristics in common. They also pose similar challenges for sellers looking to get top dollar for their homes. Knowing how to sell luxury real estate can help you navigate these challenges effectively.

Challenges in Selling Luxury Real Estate

Luxury real estate homes are typically much larger than homes in the non-luxury market, and top-quality materials go into their construction. In addition, they typically have high-end amenities. You’re likely to find theater rooms, dedicated gyms, outdoor kitchens, pools and other features.

These features that set them apart can also make these homes harder to sell.

For one thing, the market for luxury homes is smaller than the market for non-luxury properties. This reduces the chance of selling luxury homes quickly. In addition, tastes and preferences are subjective, so the custom features you relish might not appeal to all potential buyers.

But you can overcome these challenges by arming yourself with the right information and devising a strategic approach to selling your luxury home. Learning how to sell luxury real estate includes understanding the market and preparing your property to appeal to high-net-worth buyers.

Hire a Luxury Agent

The sale of a luxury property is a major financial event, and it’s not one you should take on yourself. The right real estate agent will help you with the following:

• Understanding your local luxury real estate market
• Calculating a realistic price
• Positioning your property in front of the widest possible audience of buyers

The agent you choose should specialize in luxury real estate in your market. There’s no substitute for experience when it comes to understanding the intricacies of a particular market. Specialization also makes it likely that an agent has a network of high-net-worth individuals as well as other luxury real estate agents they can tap into to help get your home sold.

If your home might appeal to international buyers, consider using an agent with experience in worldwide luxury real estate marketing such as Christie’s International Real Estate. With agents and buyers across the world, luxury international brokers extend your target market beyond U.S. borders.

Understand Luxury Real Estate Market Trends

Your agent is the best person to provide information about your local market. But having a broader understanding of general luxury real estate trends can help you place that local information in context. This gives you a clearer picture of your target market’s preferences and how to reach them.

The luxury real estate market is relatively unaffected by high mortgage rates, which have deterred many non-luxury buyers. This is largely due to the prevalence of cash buyers in the luxury market — more than 40% over the past year, according to the Institute for Luxury Home Marketing. However, mortgage rates have discouraged luxury real estate investors, so you’re likely to see more buyers purchasing properties to use as their own residences.

High-net-worth buyers make decisions based on changes in their wealth, as J.P. Morgan’s research shows. Wealth gains post-pandemic have especially benefited high-income individuals, including a rising group known as HENRY — High Earners Not Rich Yet.

The average age of HENRYs is 43, according to Coldwell Banker’s 2024 Trend Report, and they are starting to play a significant role in the luxury market. Surprisingly, individuals under 50 make up the largest age group of $250,000 to $500,000 earners, and they’re important participants in the luxury real estate market.

Despite that trend, luxury home buyers continue to trend older. Over 50% of those with incomes exceeding $1 million, and 47% of those earning $500,000 and $1 million, fall within the 50-70 age range. This older demographic remains a key component of the luxury real estate market.

Prepare Your Home for Sale

Investors often look for homes in less-than-pristine condition. However, with fewer investors in the market, you’ll want to present your home at its very best. You or your agent should inspect every part of every room, as well as your home’s exterior and yard, to identify issues that could turn off highly discerning buyers. Once you’ve resolved those issues, follow your agent’s recommendations for staging.

Staging helps buyers focus on your home’s best features instead of personal furnishings, making it easier for them to imagine themselves living there. Real estate staging tips for luxury homes include:

• Painting strong-colored rooms with neutral colors.
• Storing away family photos and other personal items.
• Adding or removing furniture pieces to keep things neutral and highlight your homes most desirable features.

Finally, order a deep clean — no corner, cabinet or closet will be off-limits to buyers who tour your home.

Implement a Sound Marketing Strategy

The most appealing home won’t sell unless it captures the attention of potential buyers. Marketing gets your home in front of the people most likely to buy it — or, in the case of other agents, the people most likely to recommend it to qualified buyers.

How To Price Luxury Real Estate

Luxury buyers might not have as many budget constraints but they do expect value for their money. So your first consideration will be to set a listing price for your home.

Your agent will prepare a comparable market analysis showing how much your home is likely to sell for, based on the most recent sales of similar homes. But CMAs are tricky for luxury real estate, especially outside of neighborhoods where luxury homes dominate the market. Perhaps your area has had few, or even no luxury property sales in the last few months, or your home is so distinctive that no other homes compare.

Real estate agents can use their experience to adjust prices based on the unique features of each home. However, an accurate valuation often requires a professional appraisal. While typically used for mortgage lending, an appraisal helps set a fair price when there aren’t many similar homes to compare. You can also use it as a strong basis for negotiating if buyers make low offers.

Create Personas for Your Target Market

When it comes to marketing your property, the only consumers who matter are the ones who are ready, willing and able to buy a home at or above your listing price. Work with your agent to create personas for the buyers most likely to purchase so that marketing can be targeted specifically to those individuals.

A home within walking distance of museums and theaters and one on a country estate, for example, will appeal to buyers with very different interests and priorities. A luxury suburban home in a planned development of luxury homes might attract primarily local move-up buyers. On the other hand, a home in a major resort or business hub could attract international buyers who travel to the U.S. for pleasure or business.

Prepare the Listing

Listing your home officially puts it on the market and serves as the main marketing tool. Better Homes and Gardens Real Estate encourages agents to use this as an opportunity to tell a story that appeals to wealthy buyers.

• Marketing copy: Describe what you love about your home, why you chose it and how it enhances your lifestyle — but from the buyer’s perspective. This way, your story becomes theirs, highlighting unique and desirable features.
• Photos: Professional photos are a must. Include shots that show your home’s layout and close-ups of special details. Virtual tours, such as those created by Matterport equipment, offer a walk-through experience, and drone shots can emphasize the yard and surroundings.
• Video: Cinematic videos work well for luxury listings. Rather than standard shots, consider a “day-in-the-life” approach with an actor to help buyers imagine living in the home.

Advertising Your Luxury Property

The MLS is the best place to advertise your home. It shares your listing with all member agents, and also posts it to popular sites like Realtor.com and Zillow, giving exposure to buyers across the U.S. and even internationally.

Other ways to advertise might include print ads in publications targeting high-net-worth individuals, as well as email and direct mail. Social media advertising is also effective and allows for very tight targeting.

Luxury Property Sales Strategies

One of the best ways to sell your luxury properties is with open houses.

A broker’s open lets other agents tour your home so that they can recommend it to their wealthy buyers. But you also might consider an exclusive, invitation-only open house for high-net-worth buyers. You can even turn the open house into a true event by bringing in catered food and serving cocktails. Step it up further by making it a themed event — but not so niche as to discourage people from attending. The idea is to impress prospective buyers so much that they’ll schedule appointments for private showings.

Takeaways

Selling high-end properties can be challenging, but an experienced agent with deep market knowledge and a solid marketing strategy can help you close faster with fewer issues. Key elements include targeted marketing, professional copy, photos and videos that showcase your home. Inviting serious buyers in for a firsthand look is also essential for making a strong impression.

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