Having a real estate license does not lead you down any specific path. There are many real estate career paths that match the different skills and interests of those with a license. Choosing a niche is an important part of defining your career.
Due to the high earning potential, many people who go into real estate are interested in becoming luxury real estate agents.
What Is A Luxury Real Estate Agent?
A luxury real estate agent aids in the sale of high-end properties. These real estate agents serve wealthy clients in their search for expensive properties. This position involves a fair amount of networking, maintaining relationships, and providing exceptional client services.
Luxury real estate agents usually work with ultra-wealthy individuals with assets of $30 million or more. They're among the world's wealthiest individuals, and it is difficult to break into this real estate field without connections or a network already established.
Consider this specialty if you:
- Have connections who are looking for luxury properties
- Understand what puts a property in the "luxury" category
- Love diving into the latest trends and following the top brands
- Are comfortable working with ultra-wealthy clients
How Much Do Luxury Real Estate Agents Make?
Working as a real estate agent is a job with seemingly unlimited earning potential. Unlike the common salary-based or hourly-paid jobs, real estate agents make their annual earnings based on their real estate sales during the year.
The average real estate salary is $48,930, which is based on how much commission you earn. Many real estate agents at the top of their game make over a million dollars a year when working with wealthy clients.
The more expensive the property, the more money an agent can make. However, more expensive homes typically take a longer time to sell. There are far more people on the market for lower or mid-priced properties than high-priced properties.
You may make far more money selling multiple mid-priced homes than trying to sell one high-priced home. This is something that high-end real estate agents must balance to be successful in their careers.
Commission rates typically range from 5% to 7%. Upon a successful property sale, 5%-7% of the sale price goes to the real estate professionals as their commission.
If a property sells for 1 million dollars at a 5% commission rate, the real estate professionals involved in the sale make $50,000.
If a property sells for 10 million dollars at a 5% commission rate, the real estate professionals involved in the sale make $500,000.
That commission is usually split between the agent and the broker.
Typically, agents only get paid after the successful completion of a sale. If something goes wrong before the completion of a sale, agents receive no payment.
The salary of the agent depends on the current market, the number of sales, and the sale price of the properties.
How To Become A Luxury Real Estate Agent
Becoming a luxury real estate agent usually takes time and hard work. Unless you come from a well-connected background, it is a complex niche to break into.
There are usually fewer clients looking to purchase high-end real estate. However, once you land a few clients in this category, they typically buy more properties in comparison to other clientele. Many luxury real estate buyers have the wealth to purchase several properties at a time.
Many luxury real estate agents began their careers selling to the average buyer before working their way up to serving clientele looking for luxury homes.
Finding new clients as a luxury real estate agent can be challenging. The luxury real estate industry serves a limited number of people. If you are looking for ways to break into the luxury real estate market, here are our top tips:
- Become an expert on real estate trends for higher-end areas in your town, even if you are not yet serving these neighborhoods.
- Spend time in the wealthier neighborhoods. Drive the extra distance to shop, dine, grab a coffee, and exercise in these neighborhoods. This will allow you to become a familiar face and gain connections in the area.
- Spend extra on front-and-center advertising in higher-end neighborhoods.
- Participate in activities and events that allow you to network with your desired clientele. For example, playing golf, attending fine art events, and attending a show at a theater are great places to network.
- Relocate to the neighborhood you want to serve. Actively participate in your new community by attending neighborhood meetings and events.
Remember that word of mouth is the most important marketing tool you can harness. Once you land your first few luxury real estate clients, offer an incentive for them to share your information with their contacts. Incentives like lower commission on their next purchase are great ways to encourage your clients to spread the word about your stellar services.
After landing your first few clients, it is vital to maintain them as a client by providing exceptional service. It is essential to treat every client like they are your only client. Remember, these high-end real estate clients will pay you tens to hundreds of thousands of dollars for your services. It is important to remember that when working with them. These clients expect a certain level of service from their real estate agents.
Written and Published by: VanEd