Luxury Real Estate Begins with People and Ends with Brand

Luxury brands have proliferated rapidly in the real estate landscape, with the latest entry being Forbes. There are two observations that are based in transaction data. The first observation is that the most expensive 10% or 20% of properties that define the luxury market in a given area are not always dominated by luxury brands. They are dominated by agents who understand the luxury market. The second observation is that having a luxury brand does not correlate with dominating the luxury market. Again, the agents make the difference along with the leadership of the brokerage.

The DNA of a luxury brand is a set of characteristics and attributes that define its identity and set it apart from other brands. In real estate, these characteristics are measured by superior agents who draw from a well of relationships to high-net-worth people, engagement in high-net-worth society, and the backing of a brokerage who delivers remarkable marketing and client relationship tools.

When you compare and contrast the luxury brands in real estate, it is difficult to measure the attributes that define their identity and set them apart from other brands; the agents make the difference. If you hand to consumers a list of brands in their area and ask them to circle the brands that they believe are luxury brands, some brands like RE/MAX, EXP, Keller Williams, or Century 21 might not get the circle – but I can tell you that there are real estate markets across the area where those brands do absolutely dominate the luxury market. The same is true of many independent brands.

Luxury brands definitely make a difference and have power to impress. If you roll up in a luxury car, it makes a first impression. If you step out of the car and you are nicely dressed and groomed, it augments that impression. If you follow that up with posture and diction, the impression continues to build. Ironically, if you are rolling up like this to sell a vineyard or a ranch, you would make a better impression driving a 4-wheel drive, with a deep understanding of water rights and soil composition.

As Forrest Gump might say, luxury brand is what luxury brand does. I will never forget driving to Los Olivos, CA with Marc Davison from 1000watt. We passed a doublewide trailer park home in ill-repair with a Sotheby's sign on it. Probably not great for the brand, but it happens. Agents don't turn down listings, nor turn people away that need real estate services. I am okay with that.

Before COVID, real estate marketing was dominated by the idea of lifestyle. For a brand to be a luxury brand, it must be defined by the lifestyle of its owners, agents, staff, and clients. A luxury brand lifestyle is better reinforced though a black-tie gala than by giving out hot dogs at the county fair. Luxury fits with the America's Cup better than NASCAR. Luxury agents and brokers understand this.

A client of ours is the exclusive partner with a professional sports teams in their market because they deliver a concierge service to athletes moving into town, which often includes plugging them into the best country clubs and introducing them to the headmasters of the exclusive private schools (where they are members and where their kids go to school). Interestingly enough, today's luxury is defined more by these things than price. Luxury means that price does not matter; it's more about aligning the customer with the treatment and lifestyle they want for themselves. Brands don't do that; great agents do that.

Get the people right, the service right, and any brand in real estate can be a luxury brand.

To view the original article, visit the WAV Group blog.