Luxury Insider: Why Would You Need A Realtor?

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Every so often, when I feel like feeding my brain with more professional knowledge (or when I want to justify the hefty dues I have to pay to the National Association of Realtors), I read the “Economists’ Outlook” blog. Some time ago, one caught my eye. The title and the content were not particularly new or earthshaking but I still read the piece twice. I guess I liked it. You’ll know why when I unveil the title. Here it is: “Home Buyers Use of an Agent in Transaction Has Risen For The Past Decade”. Music to my ears.

As a Realtor, I like being liked. There is nothing like recognition for a job well done. Sure it is self-serving but it’s nice to see that home sellers are more aware now than ever of the value of trusting and using a Realtor for the sale or the purchase of a home. You see, even a guy like me needs a pro. I have been around the block a few times, I bought & sold many homes for my own account and personal use, but when my money is concerned, I need an objective expert opinion and someone who can negotiate on my behalf. I need a Realtor.

Buying or selling a home is highly emotional. You don’t want to be emotional and confused when you sign a listing or a purchase contract. It’s your money that we are talking about. It is your home. It’s where you and your family lived or will soon live. Buying or selling is also a very difficult task, judging by the number of attorneys who specialize in the discipline and make a good living at it. At the high-end, using a pro is not an option: there is way too much at stake, too much to win or to lose. Playing Russian roulette is not a game to play in a real estate transaction.

According an NAR study “Profile of Home Buyers and Sellers” from a couple of years ago, a record 89% of buyers purchased their home through a real estate agent or broker. On one hand, I am pleased to know that the percentage is moving up; on the other, I honestly wonder who on earth are the 11% of buyers who did not get the message!… Promise me you will never do that again!

In 2001, “only” 69% of the buyers bought through a Realtor. I guess those who did not learned their lesson quickly because, as we mentioned above, the percentage has gone up ever since, with the strange exception of 2009 when it dropped a few notches to 77%, after 81% the year before. My take on this anomaly is that after a couple of lousy years when properties did not move and values went the other way, some home sellers blamed their agent and decided to go “For sale by owner”. That lasted only as long as a New England winter (about 6 months).

Actually, the NAR study suggests that only 4% of the buyers bought directly from the previous owners (It was 15% in 2001). The other 7% missing bought from a builder or a builder’s agent. When you look at the trend over a 10 year stretch of time, you’ve got to feel good if you are a Realtor. At that tempo, if we are not careful, we may get well over 100% in another 10 years!…

It is particularly comforting to note that many crystal ball readers, years ago, were predicting that Realtors would phase out, as more and more knowledge about the business, about the inventory of homes, about values, about financing, about contracts…was dispensed online for the public to read, learn and use. Obviously it did not happen that way. Quite the opposite in fact. At a time when buyers and sellers know as much as they do, the more they know, the more they know….. what they don’t know. That’s why Realtors are more relevant and essential than ever. Thank you.

HAPPY THANKSGIVING!


Luxury Insider: A New Ballgame?

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The real estate market pulse is a bit slippery and ephemeral nowadays. You know what you’ve got to deal with today, but tomorrow is another day and another set of new conditions and challenges. If it’s good, we’ll take it. If it’s not, we have to take it anyway.

This year, which is melting away fast, as we speak, business has been pretty good. We’ll gladly accept another year like 2014. But can we count on a similar year? We’ll see. We will know more and make some prognostics as we get closer to January 1. For the time being, let’s try to understand where we stand now and what appraisal can be made of 2014 in the residential real estate arena.

For this exercise, allow me to paint the picture of the market with a big brush. The problem with this task is that we have way too many states in the country and each one has a multitude of micro-markets evolving at different speeds and sometimes going in different directions. So, we’ll stick here to the general traits that marked the year and compare the stats & overall performance to that which was achieved in 2013:

  • Number of listings: Down – Curiously, more sellers chose to play the waiting game this year, whether because of the risk of not finding a satisfactory replacement home in a tight inventory market, or because of economic uncertainty, or because they still expect the market to deliver more dollars for their homes in the months ahead.
  • Number of sales: Down – No real surprise here: we can only sell what’s listed and, as we just said in the above paragraph, the number of listings, which was already alarming last year in the most desirable markets and the so-called high-end markets, actually shrunk further.
  • Median price: Up – Nothing too surprising here either. Simple supply & demand phenomenon. That’s what you get when the economy is growing/accelerating, lots of new & well-paid jobs are being created, much of the pent-up demand from the pre-recession days is still waiting at the gate… And there is not much for all these potential buyers to choose from in the way of homes.
  • Price appreciation: Up – Double-digit for most markets during the first half of the year, with enough momentum to carry on for the entire year. Note, however, that the percentage has gone down substantially in the second half. In many markets across the US, the appreciation is now “only” half of what it was through the first 6 months. Sign of the times?
  • Affordability: Down – Salaries & savings have not kept pace with inflationary prices. Today, the affordability index is down to around 30% in most hot markets. Less than a third of would-be-buyers are in a financial position to live the American Dream.
  • Luxury market: Up – Price is no issue at the top end of the market. More & more buyers are writing offers on multi-million dollar properties, some at the $100M level. The recession has not affected this segment of the buying demand near as much as others, and money has bought more and better homes during and after the crisis.
  • Foreign buyers: Up & Down – Over the last 3 years, at least, they have been the engine that drove prices up at the high-end. It could be said that, in the top tier of the price ladder, foreign buyers coming from China, India, Europe, the Middle-East and our neighbors from both the North & South, have kept that market alive & robust. Good thing because, relatively speaking, the qualified domestic demand actually shrunk a bit. Interesting to note that, as good as the foreign demand has been, it diminished in the second half. Stay tuned.
  • Cash buyers: Down – At least in relation to the previous year. Still very high though, around 30% of all sales. At the high-end, it’s more like 75%. The higher the price, the higher the percentage, up to the ceiling of 100%.
  • Multiple offers: Down – Lots of buyers are getting sick & tired of bidding wars. Only one wins (and pays big money for it) and the others move together to the next one with a sad face and less motivated to give it another try. As a result, fewer homes are selling over the asking price. It is especially true at the high-end where prices are soft.
  • Homeownership for young adults: Down – The 18 to 34 year-olds have a hard time qualifying. Renting or living with parents are fashionable options. Millennials are delaying “adulthood” (as a recent study from the California Association of Realtors describes it) and putting home ownership on the back burner.
  • Distressed properties: Down – Big time. Quasi inexistent (5 to 10%) in hot markets. After years of dominating the transactions, short sales, foreclosures and the likes, have been replaced by a huge & growing wave of equity sales. Good sign.
  • Real estate investors: Down – Low inventory and price hike have sidelined most of those small investors who benefited from the recession years and their cortege of distressed sales. Even large institutional investors have been playing low-key this year.
  • Mortgage money: Up – Banks & other financial institutions have reloaded on loanable dollars. They are now anxious to make them available to home buyers, and at rates which are still at bottom level. Good news for those borrowing candidates who were nervous when the Fed shut down its bond-buying/easy money faucet.

That, in a nutshell, represents the real estate picture and market pulse a few weeks before we close this year for good. The market velocity is still going fairly strong but it is slowing. Seasonal slowdown? Sure, for the most part, but we’ll need to wait a while longer to draw more conclusions and start analyzing the trends. Today, we are in, yet, another transition market. Let’s see what comes next.


Vallco Mall in Cupertino Finally Sold

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Intero Real Estate’s Efi Luzon represents Intero’s largest sale since 2002

Efi Luzon, Senior Vice President of Intero Commercial and managing director of the Luzon Team, a commercial REALTOR with Intero Real Estate Services, Inc., a Berkshire Hathaway affiliate and wholly owned subsidiary of HomeServices of America, Inc., recently represented the buyer for the purchase of Vallco Shopping Mall, Macy’s, JCPenny and Sears located in Cupertino, CA. The deal took almost 2 years in the making to complete and finally sold by Mr. Luzon. This marks Intero’s largest gross sale for a single agent since the company launched in 2002.

Set in the heart of Silicon Valley only blocks away from the main Apple campus in Cupertino and right across the street from the newly constructed Cupertino downtown known as Main Street, one would think Vallco was in the perfect location for a flourishing retail space, but the 37-year-old mall, with 1.2 million square feet of space including the 3 big box stores has sat half empty since the summer of 2011.

This most recent sale came about after multiple changes in ownership with the hopes of finding someone to help revitalize it. Multiple brokers took their chances at cutting through the red tape and finding a worthy buyer for years with no success.

Each of the big box stores and the mall itself had different owners requiring multiple negotiations with four different sellers. Luzon was able to unite all parties with an agreement to sell at the same time as one entity; a very rare occurrence. Eventually Sand Hill Property Company, a large international equity fund investor, took interest in the property and after two years of complicated hurdles, the sale finally closed.
“I think this sale is a great opportunity to reinvent this area into the thriving Silicon Valley community it should be. It is my job to keep these transactions moving forward no matter how long it takes, and I’m glad we were able to close this deal in a win-win situation for all sides,” says Luzon.

Efi LuzonBased out of Intero’s Los Altos office, Luzon is the leading commercial real estate agent in the greater Bay Area and U.S. He has over 26 years of real estate experience both nationally and internationally. His expertise is in selling investment real estate such as apartment buildings, hotels, shopping centers and land for development. Luzon has exclusively represented some of the largest commercial transactions completed in the Greater San Francisco Bay Area. Some of his most notable deals have included the sale of the Hyatt Rickey’s property in Palo Alto, Downtown Sunnyvale Town & Country, and the H&M retail store in San Francisco. He also solely put together the buyer and seller for a transaction that encompassed half of the rental inventory of apartment buildings in East Palo Alto, totaling approximately 1,300 units, assembling over 80 different owners, with an aggregate sale price of over $100 million.

“Being that we’re headquartered just minutes from Vallco in Cupertino, I’m glad to know one of our own, Efi, was integral in closing this deal. We consider Cupertino our hometown and love that we can work on both residential and commercial transactions to help our community thrive.” States John Thompson, COO of Intero Real Estate. “Mr. Luzon is the most prolific agent that I have ever met and he has closed this deal the only way he knows how; HIS WAY!”

Tom Tognoli, President and CEO of Intero Real Estate Services adds, “Once again, Efi has made the impossible possible. Being in such close proximity to Silicon Valley greats like Apple, Google and Facebook, this piece of property is unlike any other in the world. Only someone as experienced as Efi could successfully put together a deal like this and make it happen.”

Vallco Sale Video


Luxury Insider: The Price Sells The House!

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There is a general rule of thumb in the real estate business that wise professionals keep on reminding themselves about when pricing a new listing. It suggests that if a property is as little as 5% over what is perceived to be the market value, the seller loses…Half of the potential buyers! Not a good idea. Worse: if the property is listed at 10% over “market value”, 70% of the would-be buyers are eliminated. This is especially true at the high-end where prices are now soft and are being challenged.

Hence question 1, to the home seller: “Do you want to just list or do you want to sell?” If listing is the deal, be my guest, put any price you want on the contract. If, however, the idea is to sell, then put a price on the house which is likely to attract as many buyers as possible and produce a sale at the best possible price.

Now, question 2, this one for the listing agent: “Do you want to sell the house or do you want to ‘buy’ the listing?” It seems easy enough to get a listing by telling the sellers that their home is worth a lot more than what other Realtors are recommending, but, aside from a host of ethical issues, what good does it do?

As we said before in this column, there are three pricing strategies: you can price at “market value” based on pertinent comps; you can underprice a bit in hope of creating a bidding war if & when the local market is ripe for this scenario, or you can overprice and play Russian roulette (and perspire heavily for a long while).

A couple of weeks ago, an agent was telling me that in his market, on average, properties end up selling 14% under the initial asking price. Frankly, looking at MLS stats all over the country this year and last, such delta is not terribly surprising. The market, however, has changed again. It is getting ready for a slower winter. Many people live in denial.

With this in mind, some homeowners may anyway make the calculation that to eventually land at a serious Realtor’s suggested price, they should add 10% or so and wait for the winning offer. Sorry, it does not work that way! That much over can almost guaranty that the house is going to collect dust on a shelf for a l.o.n.g time; at least until such time when the price is seriously reduced.

I don’t have to remind anyone that a price cut, no matter how much & no matter when, is an emotionally charged event. So much that, when it finally occurs, it is often too little too late. The principle of a price reduction is to give new momentum to the marketing, resurrect Realtors and prospective buyers’ interest in a property. We need to create drama. The timing and the extent of the reduction are keys to the success of the operation.

Typically, in a great market, a price cut might be pertinent after two weeks of exposure and no action. In a good market, a month is usually enough time to test the market before adjusting the price. Now the thing to keep in mind is that a price cut must be substantial enough to restart the marketing engine.

A calendar of possible price reductions should always be part of the listing negotiation, as to avoid bad surprises. If the market is just lukewarm, merely following the trend with a reduction every month or so, is essentially useless as other newly listed homes already integrate the new valuation and, on top of that, have the huge marketing advantage of being fresh. Any price reduction will have to anticipate on the market moves and beat the most recent comps to stay ahead of the pack.

The moral of the story is that, even though everything about pricing is largely hypothetical, experience often teaches that the more conservative and reasonable the list price, the better the end result….


Luxury Insider: There is Nothing Like Optimism

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The American love affair with real estate is alive and optimism is in the air, particularly in the Golden State. Skeptical? Don’t be, it’s coming straight from the buyers’ mouths. The California Association of Realtors concluded their 2014 Survey of California Home Buyers, and the results are good enough to make my day.

According to the survey, buyers are burning with confidence about the future value of their homes. 81% of them believe that prices will further increase (and therefore build up more equity) over the next 5 years. It’s at an all-time high. When you have 81% of the buyers who agree on something, that makes page 1 of the news these days. Remember, the economy and real estate values were going backwards until just three years ago, at the tail end of the Great Recession.

If you compare the survey results to those results registered in the 2012 similar survey (41%), buyer’s optimism nearly doubled. FYI, the percentage of buyers who were betting on price appreciation was a dismal 35% in 2009, in the midst of the crisis. We’ve come a long way.

Real estate prices are pretty much reflecting the state of the economy. When things go in the right direction and financing is both available & affordable, real estate is where the family savings go, for shelter, savings and investment.

Over the last 10 years, the market has seen the best and the worst, going up or down on a roller-coaster ride. Some people benefited substantially from the fluctuations; some did not and are only now recovering from 5 years of recession. Looking back at where we come from and looking even more closely at where we stand today, I can honestly say that I don’t know too many people who lost money in real estate. I know a lot who made plenty.

Case in point: let’s look at San Mateo County in the Silicon Valley, a stretch of the Peninsula between San Francisco to the North and Palo Alto as the Southern border. The lowest annual average sales price of a Single Family Residence during the last 10 years ($876,958) was registered in 2009, at the bottom of the market cycle.

If we use this price as a base and compare it to price levels achieved 5 years before (prior to the financial crisis) and 5 years later (first 9 months of 2014), we see that it is 10% below the average price that would have been paid in 2004. Ouch, it hurts. But wait, look at where we are today: the price of this virtual home worth $877k five years ago, would now be $1,411,606… A whopping 61% jump!… And 44.5% more than in 2004!

Of course, such rate of appreciation cannot be generalized blindly on the US map. Various States, regions and towns fare quite differently in terms of real estate prices, depending on basic economic factors and overall supply & demand. However, irrespective of where you reside on the map, there is a far greater chance that you will gain substantially over time, than you will lose.

As a matter of fact, it is not uncommon for homeowners to “earn” more from their house’s appreciation than from the revenue of their labor. Interestingly enough, even if and when you stand to lose a little or more from the sale of your home, you may in fact “win”. At the end of the day, you might have ended up better off than if you had invested your money elsewhere, like the stock market for example.

My very favorite story, to illustrate the point, is one that stars a good friend of mine, who is also a top producer in the San Francisco Peninsula marketplace. A while back, when money was growing on trees in the Silicon Valley (1999 or beginning of 2000 if I recall), he sold a sumptuous estate in a renowned zip code (sorry I can’t be more explicit for confidential reasons) to a wealthy hi-tech guru.

Many years later, well after the market crashed and stabilized, the buyer put the property back on the market and sold it for a lot less than he paid for. And it so happened that my friend and his past customer crossed paths around that time. A little uneasy about the meeting, my friend felt compelled to mention how sorry he had felt upon learning that the buyer took a beating on the sale. And you know what the buyer replied? No you don’t…

What the buyer said is something like this: “you are kidding, I owe you. You saved me: if I had not bought this property with your help and guidance, I would have lost all my money… Thank you for having sold it to me… At least, this way, I recovered a lot of my investment!”

I guess you can’t go wrong buying real estate. I am glad you agree!


Luxury Insider: The Ying & Yang of Dual Agency

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I bet that if all Realtors were asked what “gun-powder-smelling” topic they would least like to talk about, “dual agency” would get the bulk of the votes. FYI, dual agency is created when the same broker represents both the seller and the buyer in the same transaction.

Across all States, real estate pros who are keen on following the law and therefore protect the public as well as their own license, know that not disclosing to either party the fact that they are handling both sides of a sale is unethical and illegal. Double representation requires written consent. If the proper disclosure is made and the consent obtained, it’s generally OK, although there is sometimes a suspicion of something fishy in the atmosphere.

Here is why: we owe fiduciary duty to our principal (the client). That includes the utmost care, integrity, honesty & loyalty. So the million dollar question is: can a broker abide by such stringent & virtuous requirements and nonetheless agree to double-end a sale? To put it in another way: Can a broker create a win-win situation for both the seller & the buyer, or will the interest of one suffer from the attention given to the other?

Those fine minds who are opposed to dual agency make the argument that an agent can only serve the best interest of one party. They claim that attempting to offer the same degree of care to the second side without affecting that owed to the first, is just wishful thinking.

Money is the big scarecrow here. Since the agent has the opportunity to collect the sales commission on both sides, “he” may be tempted to place his own interest ahead of the interest of the principals. That could include keeping the listing away from other agents who may bring a better deal, or deliberately playing dead for a while in order for the listing agent to first write/present his own contract, get it accepted and win the jackpot. Who is benefiting from the crime, you might say.

OK, let me give you my take on the matter. First, a disclaimer: what I am about to say is only my personal opinion. My corporate attorney is likely to have a view on the subject quite different from mine. As usual, however, I will speak my mind, rather than keep quiet as to avoid making waves.

What I think is that we are getting more & more paranoid in this business, seeing evil intentions in just about every thought or action. We are thinking like lawyers, not Realtors. In a way, it’s a good thing, as we need to be aware of the risks in everything we do. But, in a way, it’s excessive, as it paralyses our actions and could negatively affect our ability to get the job done for the benefit of… Our buyers & sellers.

It is true that some real estate agents are somewhat devious and may not hesitate to cheat the system to reap a financial reward. Bad apples belong to any profession and industry. They are, however, a tiny-tiny minority. Not anywhere close to a good enough reason to jumble up all scenarios and vilify one million agents who are devoted to serving the best interest of the principals.

I am not advocating dual agency. Far from it. I am just using whatever common sense I have to present the two opposite points of view with fairness and reasonable arguments.

The fact is dual agency can sometimes be a good thing. It may prove to be a positive course of action. For example:

  • It cannot be argued that the listing agent is likely the agent who knows the property best, giving the agent an advantage over others when trying to identify possible buyers. After all, we have to assume that this is a good reason (if not the main) why the sellers chose this agent in the first place. You don’t just expect your agent to babysit the listing, you want him to sell it.
  • It cannot be argued that an agent working with a buyer is likely to know that buyer best, in terms of needs & means. Knowing the peculiarities of the subject property and the sellers’ wants & aspirations represents a non-negligible advantage that may result in a happy sale.
  • If and when a situation arises that an agent is in a position to create a “Perfect Match” in between a seller and a buyer, that agent is only doing his job. Granted, the agent could refer the buyer to another agent, but, honestly speaking, we are getting more into cunning alternatives than meaningful substitutes.

Again, it’s only my opinion. OK to agree or disagree. Let the ultimate objective of doing the best possible job for both buyers and sellers be your guide.


Luxury Insider: Know, Like, Trust

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It takes at least 2 people to create a relationship, whether in business or in personal life. Those two people may be equal in terms of power, or they may complement each other, kind of the alpha & the beta dynamic duo. No matter what, it is assumed that the two sides benefit from each other and often need each other to be happier and perform at a higher level: 1+1=3.

OK, with this being said, let’s now transpose these scenarios in the real estate business. On one side you have the broker/the company, and on the other side, you have the agents. They are independent contractors, meaning that they work for themselves so-to-speak. They work “with” the company, but not “for” the company. I know it does not make a great deal of sense but that’s the way it is. It’s actually a good thing since it affords agents & companies more latitude to pick & choose who they want to work with.

In this day & age, the relationship between real estate agents and their brokers takes all kinds of forms. Depends on the business model and the culture of each company. Some companies offer full service to their associates the same way they offer full service to clients, buyers or sellers. Some companies offer little in the way of added value, mostly providing, for a fee, desk-space in an office in exchange for higher commission splits. Many are somewhere in between.

Some agents need to leverage the strength and the various services of a company to have a chance to take off and eventually thrive. Some top agents don’t need (or think they don’t need) the company as much to drive their business. I am OK with either-or. I am not judgmental today. The question to consider is always: what is making the phone ring? Is it the firm, or is it the agent? The ideal scenario should be both.

The most substantial and reputable real estate companies have a little bit of an edge, otherwise they would not keep on growing, they would not be as good as they are… And they would no longer be reputable. Some go up and some go down in an industry where you need to reinvent yourself every day to remain relevant to the clients’ needs as much as the needs of the associates.

The good firms are those which cater to those needs and facilitate their associates’ aspirations to go to the next level. They usually offer superior leadership, vision, marketing, technology, training, coaching and a myriad of tools, services and support systems. Those firms, realizing that they cannot do everything, are always attentive to creating the right connections/affiliations/partnerships, to multiply the opportunities to attract buyers, get listings and get them sold.

However, one must recognize that, even though agents cannot be better than the firm they are with, companies are only as good as the agents they have. That’s the value of a happy relationship. Another way to put it is that regardless how good a company is (or believe it is), at the end of the day its success is entirely predicated on the success of its agents. They sell real estate; the company does not. Hence the need to continually try to provide the associates with what they need for them to get better and excel, for their benefit and that of the broker.

Agents and companies share mutual benefits. The best agents, all over the world, are associated with a company rather than try to open their own individual business. The company contributes to their strong identity, their image and their batting average. Agents understand their limitations in a competitive environment where clients’ expectations require more and more financial strength, global connections and all the bells & whistles necessary to run a successful business.

On the other side, it is more and more obvious that companies rely on top agents to carry the torch. Only the best agents can give credibility, legitimacy and effectiveness to any company’s programs. The company creates but the agents deliver. They are on the front line. They are the ones sellers and buyers want and ask for. They are the ones who are liked and respected. They are the ones who are trusted with the task of selling a home or buying a new one.

Know, Like, Trust: the magic words in any lasting relationship. That goes for our agency obligations to the clients, and that goes for the “partnership” between agents and companies.


Luxury Insider: A Digital Magazine for Intero’s Premier Properties

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This month marks the release of the 14th issue of The Intero Prestigio International Magazine. Composed of some of the finest luxury estates Intero has to offer, this Prestigio International Virtual Magazine gives you a glimpse into the world of high-end properties. Since it is an online piece, feel free to enjoy it at your leisure, whenever you can take the time to relax and open your eyes to an album of beautiful homes. This also allows you to instantly share it with friends and family through social media, websites, or email. Browse through the gorgeous photos and find the property information and unique qualities of each one of the exceptional properties featured.

Prestigio International is a division of Intero Real Estate Services, a Berkshire Hathaway affiliate, specializing in the marketing of high end homes and estates in all relevant markets, whether local, regional, state-wide, national and international. We offer the widest scope of marketing coverage to multiply the opportunities to reach out to the most qualified buyers.

It is wonderful to see how this global high-end marketing program has become the reference in the industry for this type of publication and the standard by which others are judged. The release of our fourteenth issue attests of the mark that Intero has established in this prestigious market. Take a look at the beautiful homes that are the finest in the San Francisco Bay Area and beyond… you just might find your next home!

PM_I14_COVER sm

View the virtual magazine for yourself here.


From Luxury Retreats to Mountain Mansions, Prestigio’s Digital Magazine Has It All

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Over 90 pages of luxury homes to browse online.

Intero Real Estate Services, Inc., a Berkshire Hathaway affiliate and wholly owned subsidiary of HomeServices of America, Inc., is releasing their largest issue yet of Intero Prestigio International digital magazine. The digital magazine is a combination of the innovative, tech savvy power of the Silicon Valley real estate company and their division specializing in high-end real estate, Intero Prestigio International. This issue includes everything from a Mediterranean luxury retreat in Atherton to newly built County Club homes nestled in foothills of the Sierra Nevada Mountains.

PM_I14_COVER smThe magazine offers enhanced and global promotion for Intero’s most exclusive homes and estates. Designed with ease of circulation in mind, it can instantly be shared through social media websites and email. As if reading a handheld magazine, online viewers can browse through gorgeous pictures and enjoy articles written by the luxury real estate icon, Alain Pinel. The digital magazine aims not only to raise awareness of properties offered in the Prestigio International collection, but also to exhibit their finest qualities. This piece only touches the surface of what is offered through the Prestigio International marketing program.

Renowned real estate entrepreneur Alain Pinel, Senior Vice President and General Manager of Intero Prestigio International, is the primary mastermind who pioneered and launched Prestigio International as part of his goal of expanding Intero’s luxury brand. From local print advertising to international display, properties in the Prestigio International collection have an elevated level of exposure to help them sell quickly and efficiently.

“Technology has linked all corners of the world together on an unprecedented level and it is clear that we are only going to grow more connected,” states Alain Pinel. “We no longer have high-end buyers confining their search for luxury homes to their neighborhood––or even to their own country. Nor are people searching in the conventional ways of decades past. Globalization has been the buzzword for some time now, yet nowhere is it as real and apparent as in the high-end real estate market. We, at Intero, put the puzzle pieces together. That’s why, among a host of innovative tools and services, we created this online magazine to reach the worldwide audience using the digital means that connect us together.”

View the digital magazine for yourself here.


Luxury Insider: False Expectations

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A couple of months ago, I wrote about the headache that Realtors have today trying to put a price on a listing. A price that makes sense, and therefore can be rationalized when talking with the seller, potential buyers and cooperating agents. The task is getting to be hazardous in a hot market when real estate pros are using all kinds of bizarre strategies and tactics to yield the best deal for the owner while forging for themselves a reputation of superhero.

The one scenario (gimmick?) that has been in vogue the last two years or so, consists of putting a price on a property well below what the listing agent perceives to be today’s market value, in order to create a bidding war that may result in multiple offers well over the asking price.

The technique sometimes work to the benefit of the seller… And always work to the benefit of the listing agents. They can brag in the media that they are so darn good that they get top dollar (like 10-20% more than the list-price) for their listings. Obviously a bunch of would-be sellers are supposed to be so impressed by the performance that they will want those superheroes to list their homes and duplicate the magic.

Between you & me and the rest of the world, I have a hard time understanding how reasonable home-sellers can fall for such a deceptive marketing formula. I mean, if you have a $2M home which may go for $2.2 in a “sellers’ market” and you list it at $1.8M, it does not take an eagle to predict that the house will likely sell around the same $2.2 or so. Hello?

Such edgy way to do business, in my opinion, is not only dangerous but is creating lots of unwelcomed side-effects. Let’s deal with these two points, one at a time:

  • Dangerous: when we play games with the market, the market can play games with us. Real estate is not an exact science. If you deliberately underprice a property, there is no certainty that the gimmick will work every time. When it does not, the seller (and the perspiring agent) may be faced with a nasty dilemma or how to respond to clean offers just matching the asking price. At the high-end, you never can count on a host of qualified buyers fighting over a property. Often, there is only one candidate writing a bid, and he sure does not want to pay a dime more than he has to.
    Also, after months of madness in the marketplace, mostly due in many areas to a record low inventory, many are the buyers who are emotionally exhausted. They keep on writing offers and get rejected time after time, losing to the one buyer who cannot live without that particular home, at any price. The excitement of trying to buy can quickly become the discouragement of over-negotiating and coming up empty. Most buyers are no longer willing to play games. Sellers beware.
  • Unwelcomed side-effects: Not all sellers, on the advice of their agents, underprice their home… to get more. The great majority of the sellers list their homes at market, if not a bit over. Makes sense. The problem is that, even though they are told by their agents that the listing price is indeed on the high side, lots of sellers, intoxicated by ads suggesting that some brokers routinely sell homes 5/10/15/20/25% over asking, fully expect that they too will get a heck of a lot more than the advertised price. It’s contagious.

One humble and practical piece of advice to Realtors out-there: when you think of a price (“rational” or not) for a listing, be sure to have a good/clear talk with the seller, to explain what your strategy is and what he can reasonably expect in the way of offers. Not a bad idea to repeat the explanation again & again. Nothing is more deceiving than a false expectation. It’s a relationship killer. You want a win-win, not a lose-lose. The time to prepare the minds and set up the stage for what’s coming is before you jot down the price on the listing contract. Good luck!