The high end of the property market has always been more than just another price category or segment. In simple terms it is made up of the villas and penthouses that command the highest values because of their location, facilities and level of quality and luxury. Where exactly such a category starts in terms of price tag is up for debate, however it usually begins in the lower millions and in the case of the most exclusive estates can run into the tens of millions.
It stands to reason that properties of this kind do not change hands every day, so the process of putting one on the market, promoting it and selling it is a lengthy and highly specialised procedure. It takes not only years of experience, skilled staff and a large network of appropriate contacts, but also the right kind of inclination to be successful in this highly demanding sector of the property industry.
Listing and Valuing
Technically, all properties should be valued by professionals trained specifically for this task, but in reality smaller homes are usually ‘priced’ by experienced sales staff, who use price comparisons and their knowledge of the local market to do so – and usually within a very acceptable degree of accuracy. It is only when a potential buyer needs a mortgage that a bank will appoint a valuer to confirm that the quoted sales price is indeed reflective of market value. In spite of all his slide rules and formulae, however, the valuer will be largely led by the same criteria of recent sales price track records.
In the case of larger properties, however, marginal deviations can mean tens of thousands of euros. For this reason, and because far larger properties and sums of money are involved, listing agents such as DM Properties work closely with professional Chartered Surveyors before suggesting a suitable market value. “Most of us have a tendency to over-value our own properties,” says Diana Morales, founding director of DM Properties, “and sometimes people are offended by the figures mentioned, but ultimately it is a question of whether you are speculatively putting your property on the market or really want to sell it. In the latter case it doesn’t help to list your property with whoever gives the highest valuation, as it doesn’t alter the property’s actual market value.”
“We always value properties in such a way that there is some room to come down a bit during negotiations, but someone who really wants to sell his home will be wasting his time allowing it to be put on the market for an amount that will simply put buyers off.”
Marketing and Promotion
It goes without saying that the budget for producing marketing material and advertising a luxury property is larger, and there is more attention to detail when it comes to design and presentation. After all, potential buyers in this market can be expected to be sophisticated and well informed, so it is important to present such a property in the right way and to know where to market it. This is where experience and personal contacts come into it. The high-end segment of the property market is very international in nature, so companies like DM Properties reach a far wider audience through their networks of associated agents that are similarly specialised in exclusive real estate. “Our personal contacts have been built up over many years,” says Diana, “and they are augmented through specialised organisations such as Christie’s Great Estates, the European Real Estate Network and the Luxury Portfolio, in which likeminded professionals come together.” Organisations such as these, with their specialised websites and dedicated magazines, but above all with their longstanding relationship with clients and investors, offer a range of very important marketing tools that also include joint advertising and presentation at exclusive exhibitions around the world. “Networks of this kind allow us to show and market luxury properties to a clientele that is truly international.”
In many cases, such efforts are unwittingly hampered by the desire for privacy and security of the owners themselves. Something as straightforward as showing the property can be quite complicated, with owners requiring agents to ‘vet’ potential buyers. In cases where the property stands empty for long periods, the agent may need to include a property management service to avoid the home from looking run down or unattractive to buyers. This process, from listing to sale, can take quite some time, during which the agent will incur high marketing and operational expenses, although this can of course be offset by a good commission should they sell the property. By that time they will, however, have earned their money after having been involved in an often lengthy and very labour-intensive process in what is a highly bespoke segment of the market.
“The final stage is the role an agent of this kind plays during the negotiations between the owner and a prospective purchaser,” says Diana. “As the agent, we represent the owner, so it is our task to ensure he/she receives the best possible price for his/her property, yet it is also our task to sell it, so our role often includes helping to take the emotional element out of the process and finding a satisfactory compromise between what the buyer offers and what the vendor is willing to accept. It’s a tough and highly specialised field, but like all specialisations it becomes your trade and something that you wish to excel in.”
By Michel Cruz
Copyright of Diana Morales Properties, March 2007