Luxury buyers different than rest - By: Groshan Fabiola

The luxury home market is a whole different ball park from the regularly priced single-family housing market.

Prices are higher, buyers are wealthier and overall trends are vastly different if you compare these two markets back to back.

In fact, most of the time it is pointless even to compare these two markets because they are so different.

Not only are the homes different in these two markets, but the buyers are different also.

A February 26, 2007 article by Camilla McLaughlin of Realtor Magazine, “Affluent buyers want privacy, confidentiality,” discusses some of the interesting trends and things these types of buyers want when buying a new luxury home.

The article looks at a survey completed by a noted real estate company, and they also found out some interesting stuff about the type of money these people have and where its is coming from.
“Forget preconceived notions of the wealthy as inheritors of family money. Rather, a recent survey of 683 Coldwell Banker Previews International agents reveals that the typical buyer of multimillion dollar home is a self-made millionaire with ‘new money.’”

Although many of these buyers are “new money,” there are some trends as to the type of professions these wealthy people are in.
“‘Successful business owners, self-employed professionals, and highly paid corporate executives are fueling the boom in new money households. Despite what many think, new money dominates’ [compared with inherited wealth], says Laurie Moore-Moore, founder of the Institute for Luxury Home Marketing.”

According to the Coldwell Bankers preview survey, most of the people buying a luxury home are business people. In fact, 88 percent were business or corporate executives.

Thirty-seven percent were doctors, and 30 percent were lawyers.

People in the entertainment field and financial professionals rounded out the bottom of the list.

What is also interesting about the luxury market is these buyers are typically putting down significant down payments, something that is becoming virtually obsolete in the regular housing market.
“A typical down payment for luxury consumers, say respondents, is 20 percent to 30 percent, or about $400,000 to $600,000 on a $2 million home. Additionally, according to the survey, 25 percent of clients put down as much as 30 percent to 50 percent of the sale price.”

Every real estate agent that works in the luxury home market knows that most clients demand a high level of personalized customer service; but privacy is also equally important.

This is even more important if the client is in the entertainment industry.
“The No. 1 special need that extremely affluent clients require, according to 78 percent of survey respondents, is privacy and confidentiality. ‘The ability to be discreet’ was also identified as a top criteria for selecting a real estate professional in research done by Unique Homes magazine and The Institute for Luxury Home Marketing. ‘Wealthy consumers want to know their agent isn’t discussing their transaction over cocktails,’ says Moore-Moore.”

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