There are many advantages to real estate agents that choose to pursue a niche market, whether that’s specific to Toronto real estate or Ontario real estate. One of those markets is the selling and listing of luxury estates. Selling a luxury home is not much different from selling a regular property, but there are differences and nuances when it comes to selling strategy and buyer psychology.
The opportunities in sales commissions and earnings differ quite drastically as well. We analyzed some of the differences between selling luxury properties versus traditional residential homes and why real estate agents may want to take on the challenge. We are happy to help guide new real estate agents in honing in on their craft and desired market.
What to Expect as a Real Estate Agent in the Luxury Market
Reality series such as Selling Sunset and Million Dollar Listing Los Angeles showcase the glamorous world of luxury real estate. They also deliver a generous dose of drama that makes for exciting television. In reality, the path to become a real estate agent in the luxury market isn’t much different from traditional real estate agents, although there are some key differences.
Listing Agents are More Present at Showings
In luxury real estate, listing agents tend to be very involved at showings. It’s often best to let them lead the tour as they are there to assess the client’s suitability for the home. Following the showing, do your diligence and speak with your client privately about its features.
Buyers Are More Emotional
High emotions are one aspect of luxury estate that reality shows get right. After all, we’re talking about lavish, multi-million dollar homes going up for sale. Luxury homes stir up so much emotion due to their status and what they say about the owner.
For example, the cost of a luxury home and its associated features or renovation needs will often revolve around the seller’s opinion, not market costs, which can be a curveball for potential buyers. Buyers in this market often want to add specific amenities to their luxury home or live in a particular neighbourhood, so buyer expectations may sometimes surpass what is available.
Luxury Properties Are More Expensive/Lucrative
Higher prices and, by extension, higher commissions are the most apparent differences between luxury homes and traditional ones. A luxury home that costs $3 million (or more) will yield a significantly higher commission once sold than an $850,000 home. It’s an enticing reason to become a real estate agent in Toronto’s luxury market, but it shouldn’t be the only incentive for doing so.
Smaller Customer Base
Luxury properties don’t sell nearly as fast as traditional ones. So if your clients are primarily those with luxury properties, you’ll likely find yourself with a much smaller client base. These clients will probably be more committed to the sale and pay more than the already high market price. Clientele may include celebrities, C-suite employees, and real estate investors.
Adding luxury real estate to your portfolio looks great! Selling a multimillion-dollar home has its challenges, but it can help you grow your career and adds credibility to your resume.
Additional Skills & Knowledge for Toronto’s Luxury Real Estate Market
- Strong Knowledge of Luxury Homes & Amenities – Luxury home amenities can be very sophisticated. It’s vital to know the intricacies of these features to give clients actionable tips that help them make the right purchase based on their needs and acquired taste. This can range from appliances to home security.
- Strong Insight on Buyer Psychology – Remember, buying a luxury home involves more emotion than traditional ones. A real estate agent selling these homes needs to know what makes their client “tick” if they want to make the sale. That may call for altering the sales strategy and approach they use.
- Marketing Savvy – It’s important to know how to sell a home to a client with different needs (and wants) than your average buyer. When dealing with luxury buyers, you might need to employ different marketing strategies to appease them.
- Networking and Support – Finding luxury clients (and leads) ultimately depends on your network, since they’re more challenging to find than traditional buyers. Here at Zoocasa, we provide our agents with leads (including luxury ones) that can help you build your client base.
Whether you dream of selling a home like Drake’s mansion on Bridle Path or Rachel McAdam’s Victorian pad, becoming a real estate agent in Toronto’s luxury space is attainable with the right mindset, brokerage and training.
Are you eager to begin your journey as a real estate agent in Ontario? Contact us to begin your journey today!