What Does a Luxury Real Estate Agent Do? [Explained]

Like other forms of investment, there are tiers to investing in real estate.

As the amount you’re investing increases, you eventually tap into the world of the luxury real estate market, where a single property can cost more than $1 million.

As a medical professional, you might be new to this side of real estate.

If you would like to buy, sell, or invest long-term in luxury properties, you’ll have to find a luxury real estate agent you trust.

Here’s a breakdown of who they are, what they do, and the different types of luxury real estate they deal with.

What Does a Luxury Real Estate Agent Do?

A luxury real estate agent specializes in dealing with high-end homes and properties.

These are defined as properties that exceed a specific market value, usually $1 million.

Since most luxury buyers are not first-time property buyers, they ask for more from their realtors.

That’s why luxury realtors tend to have a unique set of skills that gives them an edge in the ultra-competitive real estate market.

The skills include:

• Studying the luxury market they’re targeting. This helps them form an all-encompassing idea about the strengths and weaknesses that appeal to or deter high-end clients from investing in a specific property.
• Experimenting with different marketing strategies that attract investors to these luxury homes and properties.
• Handling luxury listings, as the window through which a capable realtor can cultivate interest.
• Networking with people who lead a luxurious lifestyle also comes in handy when it’s time to introduce potential buyers to sellers.
• Discretion and a professional demeanor are of the utmost importance since many of the clients dealing with the luxury real estate market are rich and powerful people.
• Understanding and respecting boundaries proves to high-profile clients that they’re being taken seriously and aren’t being exploited because of their status.

What are the Types of Luxury Real Estate Agents?

Depending on the type of properties they sell, luxury real estate agents are categorized into:

Residential

Luxury homes make up a considerable percentage of the real estate market.

Realtors who specialize in residential properties usually have a clear idea not only about the property they’re brokering, but also the surrounding community, amenities, and level of privacy afforded to potential buyers.

Commercial

Commercial properties can be an exceptional way of generating mostly passive income from rentals.

That’s why upscale hotels, office buildings, and luxury retail properties (like shopping centers and boutique malls) are a specific niche within the real estate market.

Agents who have experience brokering this kind of property sales usually have higher education in the business field.

They can provide insights to the potential buyer about how to best utilize the property they’re investing in based on similar spaces.

Recreational

Resorts, villas, luxury chalets, and beachfront vacation homes are all examples of recreational luxury properties.

Agents with experience in this field usually inform the potential buyer of all the perks of choosing a specific location or property.

These include proximity to services like hospitals and restaurants, whether or not the property comes with hotel services, and nearby attractions that can drive up property value.

Rural

Recently, demand for properties away from the hustle and bustle of cities has grown considerably.

Expansive ranches, vineyards, equestrian estates, and other rural properties are now a sign of appreciating the luxury of a quiet life in the countryside.

Luxury realtors who have a background in agriculture, equestrian amenities, and rural property upkeep are better equipped to handle clients who seek this kind of privacy and exclusivity.

They can answer questions about the available service contractors, local and state laws, and the level of comfort expected when relocating to the property area.

Developmental

Newly built luxury single-family homes, condominiums, and “gated community” type properties also need to be marketed to buyers.

That’s why some developers hire experienced luxury real estate agents to build brand awareness and find the right market for the new project, sometimes even before it’s finished.

These real estate agents usually have their work cut out for them, as most buyers trust the present more than the potential future.

Unless success markers are obvious and the new development is backed by other heavyweight investors, it can be difficult to carve a niche in the luxury market doing just this work.

International

Many luxury buyers look to invest in properties overseas.

These can function as vacation homes, a secondary residence, or an investment opportunity, especially in countries with low or no property tax.

Luxury realtors who specialize in this niche are well-versed in international law and understand the delicate nature of cultural differences and how foreigners are treated in the places they market.

Tips for Collaborating with a Luxury Real Estate Agent

Here are a few tips for choosing a luxury realtor to help you invest in a new property:

Find the Correct Realtor Niche

The world of real estate is incredibly vast, with categories and subcategories that create specific niches a good realtor will try to occupy.

As an investor, it’s wise to have someone with experience dealing with the kind of property you’re targeting.

This saves you the back and forth of dealing with novices who can’t get you the best deal on the property you want.

The luxury real estate niches you can target while looking for your next purchase include:

Luxury Historic Properties

Many luxury homes were built at the turn of the 20th century, and they usually remain in the owners’ family for a couple of generations before they make their way to the real estate market.

Though some are in excellent condition and the paperwork is clear, some of them might cause trouble for someone who’s not experienced in owning and caring for an old property.

Working with a luxury realtor who has previous experience dealing with historic homes makes your job as an investor much easier.

They can run background checks to make sure you have all the right paperwork and even hire contractors to test the building’s condition and determine the amount of renovations needed, if any.

Some historic buildings also require special permits if changes are to be made to the floor plan or surrounding structures.

An experienced luxury real estate agent can help you along the process so the investment doesn’t drain your time and resources.

Properties Designed by Famous Architects

Although in most cases the name of the person who designed a property doesn’t really matter in its selling price, it becomes an asset in and of itself when the name of the architect is prominent,

In some real estate luxury markets, like in Los Angeles, California, the realtor can use the property’s pedigree as leverage in negotiations.

Having a complete analysis of the building’s history (including the name of the architect, original owner, and the contractor who built the property) and its architectural significance can drive up the listing price.

Eco-conscious Properties

A large faction of prospective luxury homeowners are moving toward more eco-friendly building designs and features.

Aside from saving on resources, like how xeriscaping saves water in drought-prone areas, it can also drive up the market value of the property.

If this is something you deem important but have no previous experience in, then you can look up luxury realtors who regularly deal with eco-conscious properties.

They can verify the design features and whether they support the claims of the previous owner, or at least point you toward professionals who are able to do just that.

Beachfront Properties

Waterfront properties sometimes have specific regulations regarding zoning, private beach areas, and water access.

These have to be negotiated with municipalities to provide legal grounds for land use and amenities.

If the previous owner of the property hasn’t already figured the regulations out, having a savvy realtor can spare you from running into dead ends with governing bodies.

Private Islands

As a very specific niche of the international realtor category, private island property ownership requires dealing with a real estate agent who knows international property and taxation laws.

Moreover, since there are specific logistical challenges to remote island ownership, an experienced real estate agent will also provide you with the necessary information to safely and effectively provide utilities and amenities to the island.

Fix-and-Flips

If you’re entering the luxury real estate market to buy dilapidated houses in foreclosure and sell them at a premium price, you might find fewer opportunities than with properties with lower market value.

That said, you can still buy fixer-uppers that require more care and attention to restore them to their former glory, then sell them with the help of an experienced realtor.

Ask as Many Questions As You Can

Any investment requires thorough planning and research for it to be rewarding in the long term.

Since the real estate agent acts as the middleman between the buyer and the seller, you’ll find that your realtor will become a point of reference for many of your questions.

No question is too shallow or unintelligent.

You can inquire about anything regarding the property, from the history and the floor plan to the number of previous owners and the contractors they hired to do any kind of work on the property grounds.

A capable real estate agent will not dismiss any of your concerns and address all of your questions with the attention necessary.

If you feel ill at ease with any particular aspect of the sale, be upfront with your realtor so they can investigate further before proceeding.

Explore All the Available Financing Options

Financing a luxury real estate purchase can look a little different from a regular mortgage.

Here are some of the options available for this kind of purchase:

Traditional Mortgage

Although it comes with the somewhat unsettling name of “jumbo loan,” a traditional mortgage can be taken out for properties that cost $750,000 to $1 million.

That said, these loans can only be granted to individuals with an impeccable credit score of over 700, and have very strict regulations because they’re considered high-risk.

Private Lenders

Private lenders usually have a little more flexibility with the amount of money loaned out and the repayment schedule.

Bridge Loans

Similar to other loans by private lenders, bridge loans are considered the equivalent of a payday loan, which means they are speedy but have a very high interest rate.

Equity Financing

Using your own equity as a method of financing a luxury property purchase is a common method that high-end investors use.

The three most common methods of equity financing are cash-out financing, a Home Equity Line of Credit (HELOC), or taking out a second mortgage on a property you own.

Plan Your Future with Physicians Thrive

Luxury real estate is a lucrative investment opportunity. Finding the right agent for the job can be tricky, but we hope to have provided you with the right tools to start looking!

If you want insights into your investment portfolio, opportunities to grow your medical practice, or ideas on how you can plan out your retirement, Physicians Thrive is the right place to start!

Contact our team today and explore how we can help you thrive!