An imposing Georgian colonial with seven bedrooms and a supersized lap pool was on the market more than 18 months before it sold for $2 million, a steep drop from its original price. By then, its sellers, a wealthy family seeking a more child-friendly neighborhood, were exhausted by their long struggle to locate buyers.
As this story illustrates, those trying to sell an upper-end home in this market can face significant challenges - particularly if they strive for too high a list price at the opening, says Mark Nash, a real estate broker and author of "1001 Tips for Buying and Selling a Home."
"Even for high net-worth individuals, there can be obstacles to financing one of these exceptional properties," Nash says.
One factor is that in this phase of the economic cycle, interest rates on very large mortgages - known as "jumbos" - are higher than rates on less expensive home loans, known as "conforming mortgages."
Another factor is that even those in the upper brackets are now more cautious about housing expenditures, according to Nash, who adds that the market for top-end houses has also declined because fewer senior executives are currently being transferred.
Still, he says the wannabe sellers of luxury homes should work closely with their listing agents to set a strategy and tactics tailored to the high-end market. Here are pointers:
- Seek a sophisticated listing agent.
Many real estate agents have the expertise to market average properties. But fewer have experience selling upper-echelon homes, says Monte Helme, a former Century 21 executive and consultant to HouseHunt Inc. (www.househunt.com)
"The upscale community is a totally different marketplace. This is no place for beginners," Helme says.
How can you find the appropriate agent to help sell your luxury house?
"Referrals are the way to go. As with any real estate you're selling, word of mouth is the best way to find a pro," Helme says.
After you've assembled a short list through references, he says you should do in-depth interviews with all the agents on the roster before making your final selection.
"Ask for details about their marketing plans and how they'll follow through to close a sale," says Helme, noting that buyers of high-end houses typically expect more help with their housing transitions than do average purchasers.
- Price your place by consensus.
The sellers of a cookie-cutter home in a tract subdivision normally have an easier time setting their list price than do those who own a luxury place, Nash says.
"Most estate homes are one-of-a-kind custom properties. So it's harder to figure out the right price tag to hang on them," he says.
As a basis for pricing, the owners of any "For Sale" property should analyze the results of comparable recent sales. But, as Nash says, home sellers in the upper echelon usually need to make more adjustments.
"Don't just rely on your one agent for a recommendation on the appropriate list price. Ask the agent to draw colleagues from the same office into the discussion and maybe their broker, as well. That way you'll get more of a consensus on the correct price," he says.
If in doubt on the appropriate price for your luxury home, Nash says you should move to the lower end of the suggested range.
"The buyers of these houses may have money. But in this market, they'll still demand a deal," he says.
Nash, who represented the purchasers of the seven- bedroom Georgian colonial, says it wouldn't have languished on the market so long had it been priced more realistically from the outset.
- Emphasize the quality of your local public schools.
Given that school quality is important to buyers in all income categories, make sure the marketing materials developed to sell your home highlight statistics that show the strength of the local schools.
"Also list the tuition costs for the nearby private schools to show potential buyers how much they'd save if they sent their kids to public schools," Nash says.
- Go for "killer curb appeal."
While a handsome front door with polished brass hardware and meticulously pruned shrubbery, such as topiary gardens, are status symbols that matter for many high-end buyers, Nash says no home seller should expend a fortune to make a property more appealing to prospects. However, a sizable investment in curb appeal could help hasten the sale of a luxury home.
"In some cases, spending the money to install that circular driveway with the fountain in the middle could be justified if it gives your house killer curb appeal," he says.