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Why buyers are turning away from luxury property?

Posted by Park Place Realty Network on January 24, 2020 at 6:10 PM

Selling luxury properties and becoming a top-notch luxury real estate agents takes a lot of work. However, even when you do everything right, some homes simply won’t sell soon enough. That’s why real estate agents need to understand the needs of their buyers, and most importantly – what are the things that buyers don’t like. The current situation in the real estate market is that everything is booming, except for the high-end, luxury part. That’s why we’ve made a list of reasons why buyers are turning away from luxury property – a simple guide that will help real estate agents sell properties like that much faster.




What are the reasons buyers are turning away from luxury property


Even though luxury homes are attractive, real estate agents are having trouble selling them in recent years. Here are some reasons for it.


● Is money the problem?


Actually, not. Affordability is not the main issue of why buyers are turning away from luxury property. The truth is, now more than ever, people can afford expensive luxury homes. So, the reason must be something else.


● Location


No matter the house price and its characteristics, the location is the most important factor when buying a luxury home. This may be the reason why buyers are turning away from luxury property, but also why some housing markets remain strong whatever happens. Some locations are simply more popular among high-end buyers, which definitely shows a change in how fast home sells there.


● Taxes


Some states have changed their rules of tax deduction, which results in high-tax states becoming less desirable for high-end buyers. Apart from the houses being sold less frequently, this resulted in more relocations – especially to states like Florida or Nevada, that have a more attractive tax system. So, if you’re thinking of becoming a Florida real estate agent, now is the time to do so. With a simple relocation anywhere in Florida and a positive start, you can start selling homes immediately.


● High-end buyers are not taking risks


When it comes to wealthy buyers, they are for sure aware of all the financial uncertainties and most importantly, their own budget. And that’s why they won’t take any risks and buy a luxury home until they are sure they’re doing the right thing.


● More options in the luxury housing


Another reason why buyers are turning away from luxury property is the excess inventory in the luxury real estate market. As the supply is not limited, the prices are going down, which results in buyers being pickier. This means more time for luxury homes to stay on the market and less fun for real estate agents.


● Many millionaires don’t live in luxury homes


The most surprising item on the list is definitely the way millionaires live at the moment. If you’re wondering why buyers are turning away from luxury property – well, they enjoy living next door. According to a recent study, most of the rich Americans don’t choose luxury properties as their homes. Only 16% of wealthy homeowners live in luxury homes priced at $1 million or more. Others choose to live in properties that are far more affordable – mostly $250 - $500 thousand.



How to sell a luxury home? Tips for real estate agents


As a luxury real estate agent, you may find the current situation troublesome. That’s why you need to do everything you can to sell luxury homes faster and be more successful. Here are some tips on being more effective in the real-estate business.



Understand your buyers’ needs


Whatever homes you’re selling, you need to understand the needs of your buyers and get to know them better. For example, most of the buyers nowadays are millennials, and they happen to have more specific and different needs. The biggest difference is the size of the properties. Millennials are not looking for huge luxury homes, but rather high-quality and practical homes that aren’t that spacious.


So, be sure to investigate more about your clients and address their specific needs. Also, make sure you ease their purchase and relocation by recommending them the right companies to work with. For example, a positive relocation experience with a reliable company like Best Cross Country Movers will give a more complete picture of you as a real estate agent, and bring you more referrals.



Choose the neighborhood correctly – actually, the neighbors


One valuable piece of advice for selling luxury homes is picking the right neighborhood for your clients. You should know that most wealthy buyers like their neighbors to be the same. They tend to choose homes in areas with wealthy residents.



Don’t force it


As we mentioned, wealthy buyers are probably aware of all the aspects of a home purchase, so you shouldn’t force them to make the decision. It’s best to present the properties well and gather all the necessary information about it, and let the buyer pick his own home.



Advertise the property to attract the buyers


It’s important to advertise the property you want to sell in such a way that buyers are immediately attracted to it. One of the ways to do it is to host an event or a party, that shows the true potential and strengths of the property. Be sure to know who are the people coming, so you can adapt the event to their taste.



Give your high-end buyer a high-end treatment


You already know that you need to know your buyer in order to sell them the right home. However, as you’re dealing with wealthy buyers, you need to give them a special, million-dollar treatment to convince them to buy a property. This includes a high-quality showcase of the property, a premium meal when showing the place, etc. Spending some money on treating your buyer well will definitely pay off in the end.



Accept the changes


When you take a look at the reasons why buyers are turning away from luxury property, you need to notice that the real estate market rules are changing. And that’s the key to successful sales – accepting the changes. A good real estate agent will find a way to adapt and use his experience and skill to work at different times and circumstances. A positive attitude brings more sales!



 

Written By: Lisa Robert with US Moving Experts

 

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