Are any of these items near the top of your clients’ wish lists? A designer kitchen, even if they’ll only use the microwave; a media room where they can kick back in plush theater seats and watch the latest “Terminator” in private; a wine cellar that doesn’t necessarily have to be in the basement; a tennis or basketball court where they can keep fit or, better yet, an indoor pool; or perhaps they have a yen for a ballroom or cigar room. If your clients are asking for these features, they fit right in with buyers of homes costing upwards of $1 million, according to a survey of real estate agents specializing in luxury houses.
Coldwell Banker surveyed 200 of its sales associates who had sold homes valued at $1 million or more between May 2002 and May 2003 to find out about buyers of luxury houses. The findings not only verified some of the assumptions I’ve held about this group, but also gave me a few new insights into what motivates these buyers. If you know your buyer profile, see if it matches up with the results of Coldwell Banker’s Luxury Buyer Profile.
I wasn’t surprised to learn that two-thirds of these luxury home buyers are baby boomers and that all but 12 percent are married couples. But I was surprised that only slightly more than half of the couples have children. The second largest group of buyers are empty nesters 56 years and older, with a mere 4 percent under 34 years of age.
Nine out of 10 buyers want a four- or five-bedroom house, and half wanted their house to be between 4,000 and 6,000 square feet. Twelve percent wanted a house bigger than that, while 37 percent thought 2,400 to 3,999 square feet was just right.
About a third of the luxury buyers paid cash for their new homes and another 17 percent put down 50 percent or more of the home’s price. That means that a huge portion of the high end of the housing market is not affected by rising interest rates. That may or may not sound like your buyers, but this finding probably will: Most buyers’ negotiating styles were described as “close to the vest, minimum divulgence.” That fit 63 percent of buyers, and another 24 percent were described as “hardball” negotiators. Only 13 percent fit the “money is no object, I just want it” category.
These negotiating skills were probably honed on the job. The top job description was “business executive of a large corporation” followed closely by “entrepreneur.” Only 11 percent of the surveyed agents’ buyers inherited their wealth.
If you don’t know whether your clients fit the Coldwell Banker survey profile, it’s time you did some buyer profiling of your own. Think about conducting a similar survey of your own market. Call the top agents serving your segment and ask them to tell you about recent buyers of houses similar to those you build. You could confirm that you’re right on target, or you might find out that you need to learn a lot more about designer kitchens.
