This is Part One of an ongoing series about Luxury Home Buyers, their expectations, origins and trends.
This first article in the series will look at these buyers and what they expect from their luxury real estate agents. For some reason, I thought market knowledge and keen negotiating skills would head the list for luxury home buyers, but a recent 2007 membership survey conducted by the Luxury Home Council, and authored by Jim Remley, shows something far more basic.
So what to luxury home buyers expect? According to this survey of luxury Realtors, luxury home buyers want real estate representation that provides, in order of preference:
- 86% Help in finding a luxury home
- 56% Help in managing the transaction
- 43% Expert negotiation counsel
- 34% Advice on purchasing a luxury home
- 28% Assistance with paperwork
- 13% Help understanding the process
- 9% Help locating jumbo financing
- The average down payment for the luxury home buyer is 33.6 percent.
- The typical luxury home buyer spends 11 weeks searching for a home prior to purchase.
- Luxury home buyers, on average, look at 12 homes before making a final decision to buy.
- The typical (if such a thing exists) luxury home buyer is seeking a residence with 3500-4000 square feet, 4-5 bedrooms and 3-4 bathrooms. (Note: In the San Diego luxury home market, I believe the average square footage required by our luxury buyers will be higher.)
Like many, I might have guessed that the internet would have diminished the role of the real estate professional in the home search.
That appears not to be the case–and perhaps with good reason. Luxury home buyers, as a group, are more accustomed to seeking professional advice and reap the benefits of that counsel. Local luxury home specialists will understand market and neighborhood nuances that might not be revealed in internet searches. These luxury home Realtors will also, hopefully, have a good working relationship with other luxury specialists and will know of properties that may be available for sale, but may not be listed in the MLS. Those properties, of course, will not show up on any MLS search. They will also know neighborhoods, both private and public schools, country clubs and other factors that would suit a particular luxury home buyer–especially one is is relocating from another area.
Finally, most of us who deal in luxury real estate have found that our luxury buyers already have mortgage financing in place–and from our experience, it generally stems from a trusted professional advisor and financial institution.
The wealthy, it appear, tend to have trusted advisors in their lives–which leads us to wonder: Is that part of their wealth strategy and success?
I am inclined to think so.