Posts Tagged ‘Luxury Insider’

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Luxury Insider: Facebook vs. Greece

By Alain Pinel | May 23rd, 2012 0 Comments

Do you believe in Santa Claus? I do. I did not when I was a kid, but now I do. I have to. I am so sick and tired of the dull-to-bleak-to-depressing news about the economy that I am now looking to Santa for help. He might as well do something for the adults for a change. Kids cannot have everything. Not in my house anyway.

Today, Santa looks a bit like Mark Zuckerberg. Forget about the beard and the red stuff. Don’t personally know the guy –although he lives a few minutes away-, but I like what he can do for the grown-ups. He can make us believe that people can still make the difference, no matter how badly our political leaders can mess up our affairs. He can bring back the invigorating will of success, the excitement of creating and winning. We used to call that the American spirit.

I know that the stock has been heckled a bit since Day 1, “morning after” syndrome I guess. So what? This IPO thing is still giant and should be celebrated as such, rather than described by some blasé and hard to please commentators as a dud. Everything is relative, to say the least. Are we losing our common sense? As we say in my old country: “Let’s not be more royalist than the king!”

If I were to write a serious book today, I would title it “Facebook vs. Greece”. That’s the 2012 version of “Ambition vs. Complacency”, or “Standing up vs. Laying down”, or “Making money for others vs. Burning other people’s money”. I don’t know what’s going to happen to Greece (or I am afraid to tell) but I was trained to always propose a solution whenever confronted with a problem. Here is my recommendation and my silent prayer to Santa Zuckerberg: “Mark, listen to me, buy Greece, make it a resort for the employees or something like that, today the price is good, you don’t have to say I am the one who told you.”

I have been preparing for the big IPO. I am now waiting for the Facebook lottery winners to buy some nice homes over the next few months. A Realtor friend of mine, someone who is nearly always right when he agrees with me, tried to temper my enthusiasm (should I say my expectations?), suggesting that many new techie millionaires were the subdued type and might not buy a bunch of pricey homes when they finally clear their cash. Well, I’m not sure I buy that.

When a guy wakes up with, say, $50M in his back pocket, I don’t care how subdued he is, he buys real estate. He might put half, that is $25M aside to create another Facebook, but I guarantee that he will put much of the left over on a nice pad with a roof on top….$25M can still buy a decent home in the US!

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The Luxury Insider: Do You Really Need a Realtor?

By Alain Pinel | May 2nd, 2012 0 Comments

Every so often, when I feel like a sponge for professional knowledge or when I want to justify the hefty dues I have to pay to NAR -the National Association of Realtors-, I read the “Economists’ Outlook” blog. The other day, 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 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 today than ever before of the value of trusting a Realtor with 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 and 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.  In the high end, using a pro is not an option: there is 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 to the NAR “2011 Profile of Home Buyers and Sellers”, a record 89% of recent buyers purchased their home through a real estate agent or broker. On one hand, I am pleased to learn 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, just a few years back, “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 2011 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 the 10 year stretch of time, jumping from 69% to a record of 89%, 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.

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The Luxury Insider: Want a Piece of the City of Lights?

By Alain Pinel | April 25th, 2012 0 Comments

Last week, I wrote about the power of the “Leading Real Estate Companies of the World” network and their “Luxury Portfolio” high end division. They are our partners in the marketing and sale of upscale homes and estates all over the globe. Our counterpart in France is a firm by the name of FEAU,” Daniel Feau Conseil Immobilier” to be exact. They are to luxury Parisian real estate what Cartier is in the jewelry business. It can be said that they have their stamp on the most desirable and expensive apartments and mansions in and around Paris and they are the place to go for the fortunate few who want to buy them.

A few days ago, Charles-Marie Jottras, their President whom I have known for several years, sent me a study they just completed of the captivating high end market in Paris and the Western suburbs. I thought you would enjoy reading some of the findings. Perhaps you are looking to buy in Paris, or perhaps you just want to do some free “window shopping “…. Or maybe you are curious to know who the people who buy those multi-million dollars condos in the City of Lights are. Well, whatever your motive may be, enjoy!

The first thing that jumps at you at first glance is that the Paris market traits, as far as the buying demand, are pretty similar to what we are observing in other European capitals, like London, or in our own large metropolitan city centers, like New York, Miami, Los Angeles or the San Francisco Bay Area, to name a few.  There are two kinds of buyers: the domestic buyers and the foreign buyers. They are not targeting the same real estate…Question of means. The foreign buyers now represent the lion’s share of the qualified demand, and the higher the price, the bigger the share. And you know what? At the very top of the price scale, it looks like we are competing for the same exact buyers!

Basically, the domestic demand in Paris is confined to a relatively small range, between roughly $1.5M and $3.5M, the entry level to what could be considered the high end in the region. Above $3.5, the large majority of the French buyers are out of the picture. Enter the foreigners…  They are having a blast buying the crown jewels, right and left, up to $100M, or whatever.  Who is counting?  They buy beauty, they buy financial security (kind of), they buy in full ownership (which is not necessarily the case where they come from), they buy glamour and fame.

FEAU went as far as determining who, among the foreigners, was buying what and in what price range in Paris. Take a look at the findings of their study based on recent months and compare with your own big city market. I know that Paris, at this point, is ahead of the pack, but this will give us the flavor of things to come in our most desirable and very pricey US markets.

  • European buyers (euro zone) represent, together, 13% of the foreign buyers in Paris. Just like the French locals, they are in the $1.5M to about $5M max and prefer the historic districts.
  • The British (they are European too you might say, although they don’t admit to it) represent 10% of the buyers. They are shopping for the same goods mentioned above and in the same price range.
  • The Swiss count for 15% of the sales (which was a big surprise to me) and they buy up to about $13M. Their economy is doing alright. They have quite a bit of the world’s money; maybe some of yours.
  • Africans have an 8% share of the Paris luxury stock and buy also up to about $13M.
  • The Middle East buyers represent 12% of the total. They start their shopping at roughly $10M and go up to $100 or so. Whatever it takes.
  • We, Americans, together with our Canadian friends, account for 10% of the Paris buyers according to the study. We have more modest means. Our range is $2.5M to $6M, mostly in historic districts. Nostalgia.
  • Brazil and the rest of South America is good for 4%. They spend up to $6M but want the money districts.
  • The Russians absorb 20% of what’s offered and they want the best of the best, up to about $25M.
  • Finally, the growing numbers of Chinese buyers represent today 8% of all buyers in the City of Lights. They too want the cream of the cream, at least what they can buy up to $13M.

That’s it. What do you want to buy? What’s your budget?

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The Luxury Insider: Alert: Sellers Wanted!

By Alain Pinel | April 11th, 2012 1 Comment

If you own a high end home in Silicon Valley and you are considering selling your property at some point in the near future, I have a question for you: what exactly are you waiting for?

Please understand. My question is totally earnest: no tricks, no ulterior motive. I would love to know what is actually causing you to delay putting your property on the market. I am sure you have a good reason; I am just curious as to what the reason is.

You see, I am a little puzzled because, from my point of observation, it seems like the right time to sell. If you are in the San Francisco Peninsula, the South Bay and much of the East Bay, the market is buzzing, particularly in the million dollar range. You list a property one day and there is a good chance that it will be gone in a matter of days if the price is within shooting range. There is also a good chance that a few would-be buyers will fight over it since there is so little inventory available to be sold.

The MLS stats reflect the fact that new sales are outnumbering active listings about 2 to 1. Looking at the number of multiple offers on homes priced between $1M and $2M, you would have to conclude that you have 3 buyers for each home. I am not surprised that buyers are coming out of the woodwork in masses after years of economic slowdown. This is clearly shown in a recent NAR study which points to the fact that in 2011, “typical sellers” sold their home after 9 years, while between 2001 and 2006, the sellers’ tenure in a home was only 6 years. That can only further exacerbate the pent up demand phenomenon.

So, no surprise there. What does surprise me is the fact that so few sellers are taking advantage of the opportunity this above reality is offering them on a silver plate. Hence my original question: if you are thinking about selling, why not now?

Let me list a few reasons, pertinent or not, to try to guess what yours might be, and then I will give you my take:
• Prices are just starting to go up; I don’t want to rush selling if it ends up costing me plenty in potential appreciation over the next few months…..
AP: OK, I hear you, you may not lose much by waiting, unless of course you are buying up, in which case your argument is working against you: the more expensive property you are looking to buy will logically appreciate more & faster than the one you need to sell.
• When Facebook’s IPO strikes in May, a crowd of jackpot winners will pay a lot more for my home….
AP: Perhaps but I hate gambling on future bonanza since much of the fuzz about forthcoming IPO’s has been in the news for months and the real estate values correction has already been integrated in today’s prices. There is not one single listing on the market which does not reflect this anticipation.
• I read that next year the market might be even stronger….
AP: We’ll see. Nobody knows. To be honest with you, I too thought a few months ago that 2013 would be a dandy. I still kind of feel that way but I don’t know anymore whether it is because I successfully convinced myself or because I have objective tangible indicators proving the point. The fact is the economy is so manipulated by politics these days that you just cannot smell the market more than 6 months at a time.
• Mortgage money may get even cheaper….
AP: I don’t buy that one. It would be more reasonable to assume that if the rates move this year, it will be in the other direction.
• I would love to sell but It’s awfully tough to find the right home to buy and then to move quickly before another bidder snaps it!…
AP: I know, and that’s the whole point of what I am saying. We need a lot more listings to choose from to satisfy the demand. Is it likely to happen? Well, a lot more new properties are going to hit the market in April & May but…a lot more buyers will be in line to get them. No change really. The market is what it is. Persistence leads to winning.

Conclusion (strictly from my perspective): if you wish to sell and buy something else, do it. You may not find and buy the perfect home in the perfect location and at the perfect price, but you know what? Nobody does, irrespective of the market. Love is rarely at first sight.

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Luxury Insider: Open House in the High End?

By Alain Pinel | March 28th, 2012 0 Comments

I often hear from both home sellers and real estate agents that it is neither appropriate nor recommended to hold an open house for the public if the subject property is a multi-million dollar luxury home. In fact I heard the comment so much over the years that I almost got to the point of believing it! Well, I still don’t, generally speaking.

Before I dig deep into the arguments which may be used to validate one side or the other, let me state clearly that I understand the difference between an estate-quality property and a more standard home. I made a good living understanding and leveraging such difference. The marketing strategy and scope are indeed altogether different because we are not dealing with the same buyers, in terms of means and needs. That’s why Intero has a “Prestigio” Division, by the way.

However, if we agree to keep things simple, we will probably agree that, irrespective of means and needs, buyers, in all price ranges, are…buyers. They share the same emotions and desires. The same thing can be said of sellers. Principals, on either side, always appreciate when we make their objective easily achievable.

If they wish to sell, their chances of winning largely depend on the number of prospective buyers who get to see the house. If they wish to buy, their chances of finding the right home largely depend on the opportunities they have to access and visit any given property. That is of course the value of the open house option.  It is easy: buyers can look at various homes, with or without the family, whenever they have a little time and when they are in the mood.

Of course Realtors are best to guide buyers through the maze of options and explain the pros & cons of each location and property. Still, sometimes it is fine to stroll around town, relaxed, and do home shopping as we do window shopping in a mall. My wife loves to do both!

So what’s wrong, if anything, about an open house in the high end?

Here is a list of the legitimate arguments being presented by the critics or the skeptics, followed by the counter-arguments, whether legitimate or not:

  • “It makes no sense to have an open house in my price range” – Maybe it does not but we should not disqualify the option. The open house could very well be attended by…wealthy people too.
  • “My house is way too large to be held open” – If it is too big for one agent, it might not be for two agents. If pertinent, we can plan for three agents to be present.
  • “I would rather have my agent welcome visitors and show them the house” – Sure, and this is exactly what is likely to happen, but this preference should not necessarily eliminate the open house option.
  • “I don’t want undesirable people to see my house” – This one is a little tougher since we cannot judge people on a quick look. A wealthy friend of mine was prevented one day from  entering The Ritz (where he had a room for the week) in Paris because he wore jeans! .. He canceled his reservation…  Of course, on the seller’s advice and his consent, we can demand name, contact info and even proof of identity to visitors whenever needed.
  • “I have too many valuables” – When a house is for sale, whether open or not over the weekend, there are elementary precautions to take to reduce or avoid altogether the risk of a visitor stealing pricey objects.  Anything small and of great value, such as jewelry or art should not be offered to the eyes, they should be under lock or in a different place.

The open house option adds a new dimension to the marketing of a property. Many homes, regardless of price, sell on open house or as a direct result of an open house. This option needs to be discussed with the agent on a case by case basis and never arbitrarily be discarded. Good luck.

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The Luxury Insider: The Tale of Two Cities…

By Alain Pinel | March 14th, 2012 0 Comments

What about an easy multiple choice quiz to start the day? Here is the question: How is the real estate market at the high end today?

a)     very good
b)     good
c)      bad

OK, so maybe the quiz was a little bit unfair since it was one answer short: the right answer is “all of the above”.  How can this be? Well, the answer really depends on the famous “location”- “location”- “location”: the specific state, the specific region, the specific town, the specific district, perhaps the specific street or even which side of the street. It is that complicated.

Today, with all the uncertainty still reigning over the national economy, the job situation and the dark clouds blanketing much of Europe, people are looking for security for the money they can invest, because buying a home today is more than putting the family under a roof, it is indeed an investment. It can be good but it can also go bad.

With the sudden revival of the high end market, the pricey towns, the “money towns”, are very much wanted under the circumstances. Typically, real estate values there are more stable over time, because of a multitude of factors: school ratings, zoning homogeneity, setting desirability, not too far from the work hubs, etc…Not to forget the encompassing reason: that’s where people who have lots of money want to live. Period.

Palo Alto, in the heart of the San Francisco Peninsula, is a great example of the phenomenon. The median price there is about $2M. That market is hot, which corroborates our predictions. Listings don’t stay on the books more than a few days. Multiple offers are the norm.

Does it mean that the entire Peninsula is feeling the same heat? Not necessarily. Not yet in any case. It will happen though. The fever from the high end is progressively spreading into the surrounding areas like ink on blotting paper. How far and how long it will spread is still an open question. Looking at the map of the Bay Area, we see a significant difference between the hot Peninsula & South Bay, the warming up East Bay, and the North Bay which, aside from the buzzing traditional pockets of wealth, is mostly lukewarm. Some regions, where distressed properties represent the lion’s share of the market, are still a bit cold and may not catch the fever before next year.

The tempo at which it will spread is also an interesting point. For example, we see that in the select high end towns, a large percentage of the winning offers are over the asking price, while outside of the best zip codes, winning offers are still below asking even though multiple offers are becoming more common.

Last observation about this evolving market on the Peninsula: so far this year, the most active price bracket has been the bottom segment of the high end, between $1M and $1.5M. It is gradually moving to the next level, over $2M and up to $3.5M. We can realistically expect that the top end, from $3.5M to the moon will be sizzling by springtime.

If you are in the mood to buy, it would not be a bad idea to act on your desires now. If you are in the mood to sell, the time is ripe too: you may have buyers waiting to make you an offer you cannot refuse.

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The Luxury Insider: The Price Per Square Foot Fallacy

By Alain Pinel | February 22nd, 2012 0 Comments

I never ceased to be amazed at the fact that many Realtors are judging the value of a luxury home on the basis of its square footage. For a bank appraiser or a home builder to think that way, I can understand, it can indeed be part of the valuation methodology, but for Realtors?

In the high end, not two homes are the same, even when they are….or they appear to be. Take two identical penthouses in New York, both brand new; same top floor, same square footage, same layout, and same amenities. I guarantee that one is worth more than the other, often a lot more. Perhaps one has a better sun exposure, or a nicer view, or sits next to another beautiful residential building while the other one has a service station for a neighbor, or one is further away from a noisy school yard, etc. Are these two properties identical? Of course not.

I remember looking at fancy real estate while in the South of France, a few years back. One town got my interest, and yours too, probably, given the opportunity: Cannes, the site of the international film festival, stretching beautifully along the crystal blue Mediterranean sea. Right in the middle of “La Croisette”, Heaven’s local version of a boardwalk, there is a nice white building where, every so often, condos are “offered” for sale. I saw one I liked –of course I am easy to please. Third floor, bay windows and a balcony open to the ocean, the harbor full of the most amazing yachts, and a full view of the street action underneath, at the level of Cartier, Hermes, Prada…You see what I mean. That little pad was available for the taking at over $10,000 per square foot. No, I did not buy it. In the back of the building, another condo was unofficially on the market. Bigger and on a higher floor, but the asking price was not even half that of the first. The view was nice but who wants to overlook a pool, a garden and a bunch of rooftops when the alternative –for only twice as much- is a panoramic piece of the Mediterranean?

Square footage is largely irrelevant in the high end. Buyers buy benefits, real or perceived. Bigger is not necessarily better. Depends what you really want, or what you really need. It’s OK to want to live in a 20,000 square foot  home. It might even be pleasurable. But please understand that if & when you decide to sell it, it may fetch only what a nearby property of similar quality but smaller size will obtain in the open market. Size usually needs to serve a purpose to be worth the money it costs to build. For example, you can get your money back and sometimes make a little more if you put a home theater in your home, or a library, or a wine cellar, or an indoor pool, or a racket-ball court and perhaps even a ballroom, why not? However, if you have a huge house just to have huge rooms, square footage could be more a handicap than an added value.

Having said that, if you want a huge home because you like the feel, the space and have no concern about an eventual resale, don’t listen to me. What do I know, for the time being I live in a condo! A nice one though.

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Luxury Insider: TSUNAMI WARNING!… IT’S OK!

By Alain Pinel | February 15th, 2012 0 Comments

Have you been watching the Nasdaq lately? Of course you have. So have I, like a hawk, particularly over the last couple of months. What do we see? We see the late 90’s all over again!

2011 was not too bad for the Nasdaq. It played the little train that could, grinding most of the year, an inch at- a -time. The tempo accelerated a bit mid-December and that train now looks like nothing is going to stop it. There is no better bellwether of things to come in the Valley than the Nasdaq. Sure we are still far from the March 2000 peak of 5134 but the uphill direction in which the tech heavy index is headed and the pace at which it is moving make a statement: happy days are ahead.

There are some differences though between, say, 1998 and today. For one, we had plenty of homes to sell back then; today we have little inventory where the demand is hot, particularly on the mid-Peninsula. Also, mortgage money is still hard to get today while it was flowing during the dotcom boom. Finally, the escalation of Bay Area real estate prices in 98, 99 & the first half of 2000 was mirroring almost perfectly the progression of the Nasdaq; today, they are still slow to warm up and the thawing process is likely to be very spotty on the regional map for a while.

The barometer, irrespective of the above concerns, is indicating sunny & dry tomorrows. The “Facebook effect” you might say. Hundreds of employees and paper millionaires are already counting their money, waiting for pay-day. It might take months before the lucky jackpot winners free their cash, but they will, and just as surely, that cash is going to turn a lot of California real estate into gold. We have been there before, when regional tech IPO’s were hitting the market every week in the late 90’s. The Facebook phenomenon is going to change the Bay Area real estate landscape in a hurry.

Yes, the tsunami is coming. We don’t see the wave from shore just yet but we can already hear & feel the vibrations. Other IPO’s are lined up through the year to keep the momentum going. Looks like there is enough on the horizon to bring wealth or at least financial comfort and security to many.

The Silicon Valley, as it is often said, is the land of fear and greed. Greed is winning again. Considering the alternative, it is a very good thing. We may thank for that the genius of local visionaries, from Steve Jobs to Mark Zuckerberg, but also the background actors & directors without whom the Silicon Valley may only be another valley: the VC people. They have been using their brain cells and risking their money for nearly two decades to guarantee that the sun would keep on shining in Northern California and beyond.

In fact, they may be the true engine of growth. Obviously innovation is the necessary ingredient to produce economic success, but, by itself, it is rarely enough to leverage & multiply the opportunities and considerably accelerate & amplify the resulting benefits. By discerning the right ideas and bringing them to market, the VC companies are fueling innovation. In a way, they are “manufacturing” growth. We sincerely appreciate it. After years of bad news, we will happily reap the benefits of their good work.

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The Luxury Insider: Luxury Homes, Yes, But Where?

By Alain Pinel | February 8th, 2012 0 Comments

Between 11pm and 5am, when I don’t have anything better to do, I sometimes fantasize about what home I would buy, in what town and in which country, if I did not have to worry about such trivial financial concerns as paying my bills & feeding my family.  Judging by the success of “voyeur programs” like HGTV’s “Selling New York”, “Selling LA” & “House Hunters International”, I may not be alone in dreaming wide-awake.

Dreaming about buying a luxury home can be exhausting. First, you have to think about where you would like to live: Location…Location…Location… Paris comes to mind but San Francisco would not be bad either, not to mention New York, Rome, Barcelona, Rio de Janeiro… And of course exotic places would be in the mix: The Maldives?  The Seychelles Islands?  Bora Bora?  Maui?  Nantucket? ….Tough to decide, don’t you think?  We may have to buy more than one place after all, one in the city, one on the beach somewhere in the Pacific or the Indian Ocean, and perhaps one in the countryside.  OK, now, what are we going to live in?

Nice dream, right? Well, a lot of people are actually living that dream rather than… dreaming about it. The world has never been so small.  It makes no difference for thousands and thousands of people whether they live in a luxury top floor condo in a Manhattan high rise or a beachfront mansion in Santa Barbara or even a villa in Tuscany.  With the ease of travel and an internet connection, you can now run your business from anywhere you happen to be on the map.  When money is no object, you just have to choose where you want to wake up in the morning.

Back ten years ago or so, a friend of mine, head of international for a major US hi tech firm, did not care to work at headquarters.  He was told that it was OK with the executive team if he chose to live elsewhere.  And so he did, he found himself a nice pad on the French Riviera.  It could be worse.

Amazing how the world has changed over the last 15 years in the high end.  Many Bay Area residents who, back then, were contemplating purchasing a weekend home in Carmel or the wine country, are now considering looking for a flat overlooking La Seine, a chalet in Aspen, a townhouse in Hawaii or perhaps a far-away beach front retreat on a man-made island in Dubai.  At the same time, a host of wealthy foreigners are buying right and left in the US, happy to make a good deal and keep away from the political/economic tribulations in their home country.  Without the European demand, Miami might still be a depressed real estate market.  Cash buyers from India, Russia and China are now coming in waves into the Bay Area looking for huge homes with what they perceive as a very affordable price tag.

Just last week, I met a topflight Indian businessman who told me he knew of a small naked residential lot in New Delhi offered at $2,000 a square foot!  Keep these stories in mind when determining whether to pay what you think is a lot of money for a beautiful home somewhere in the US.  Believe it or not, our prices at the top end of the ladder are not so high anymore.  Other similar world cities aligned their prices on ours long ago since they were catering to the same exact buyers.

Our prices, today, may in fact be low and getting lower relative to the “competition”:  other similar homes in a “comparable” town in Europe, Asia or the Middle East.  Yes, our luxury real estate is a good deal considering new international standards.  Perhaps we are due for a raise and with what looks like a mini-bubble in the making on the West Coast; we may very well get it.

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Luxury Insider: Walking the Talk in the High End

By Alain Pinel | February 1st, 2012 3 Comments

I don’t know if real estate companies are created equal but they sure don’t evolve the same way after birth. Some remain small although they would like to be big and some big ones may be nostalgic thinking of the days when they carried less fat. All of them, irrespective of size, are only as good as the weight they can lift, or, to put it in real estate terms, the power they can demonstrate to properly market a home.

Marketing a home today is not just a question of good intentions and noble promises. It’s a question of means. As a real estate company, you have them or you don’t.

Take a very pricey estate for example. What are the Sellers’ expectations when choosing an agent? Well, they want the Realtor to use diligence in trying to produce a financially qualified buyer ASAP. It seems simple enough. It used to be somewhat easier in the old days because we were looking for buyers in our own backyard so to speak. The promotion of the property rarely went beyond the regional boundaries. Well, at the risk of hurting the feelings of some brokers, this is not quite enough in the high end. Not even close.

In the high end, looking for a buyer is no small task. There are only so many people who can play in that league. The challenge is to find them since, otherwise, they may not find the house, and we might not sell it. How do you go about searching for buyers since you don’t know who they are and you don’t know where they live?  Well, It is entirely possible that buyers who can afford the property live nearby. After all, we are in Silicon Valley country where money grows on trees it seems like when the market is good. But it is just as possible -if not more likely- that the buyers are from Los Angeles, or New York, or London, or Dubai, or Hong Kong, or Moscow, etc.

Now, ask yourself: knowing the above, what should you really expect from the agent you will need to trust with the marketing of your luxury property? Here is a list of questions to ask: Where will the house be showcased to maximize the opportunities to connect with prospective buyers? Can the agent, or rather his company, actually do what they say? Do they have the necessary technology tools? The marketing services? Do they have a specific high end marketing program? If yes, what does it entail? Are they affiliated with a global network of specialized brokers covering all continents?

Last bottom line question: Do they really have the power & the money to do what may be required to do the job?

These are reasonable questions. Frankly I am amazed that some homeowners in the most coveted zip codes are not considering them when signing a listing agreement. Having a nice & seemingly impressive agent is wonderful but can he walk the talk? Your call.

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