When I was just starting out in real estate, I remember a top broker at the time telling me that the High end was easier to navigate than the entry market. It seemed too good to be true. Having since navigated my way through Brooklyn and Queens co-op boards, West Village sublets, and then eventually Manhattan and Brooklyn Luxury Condos and New Development sales, I can tell you that this salty old veteran was right.
Luxury buyers not only have the benefit of larger budgets for nicer homes, they enjoy some advantages in the both the clarity of the information presented and the purchase fundamentals that go into buying a luxury home. The luxury market is defined as the top 10% of homes for sale by price. In New York City the luxury market is $4,000,000 and above.
Listed below are some of the advantages luxury buyers enjoy.
Fewer competitors
More negotiability
More time to negotiate
Better staged homes
Better sales materials
More transparency regarding negotiability
More accommodating agents & showing times
Fewer qualification questions asked
Fewer competitors - Even though the New York Luxury Market is having its third best start in the past 10 years, there are still dozens of competitors or less for a typical listing - certainly not hundreds or even thousands as you can sometimes have in a tight market in the under-a-million price range for a well priced home.
More negotiability - 10% or more off the ask is not uncommon in larger priced homes, although this will vary based on the uniqueness of the property and how well its priced to begin with. New developments frequently throw in transfer taxes and even mansion taxes as part of a sale, saving buyers hundreds of thousands of dollars in closing costs above and beyond any sale price discount.
More time to negotiate - The average days on the market in the luxury sector is currently at 157 Days vs 70 days for the under a million properties. When I'm working a luxury market buyer, we typically negotiate deals over the course of 1-3 weeks. With lower priced homes, its typically less than a week by necessity and sometimes even within hours. It just moves much quicker.
Better staged homes - it’s not unusual to see 3,000-5,000 sf homes decorated wall to wall including artwork, knick-knacks, full libraries and even closets in an effort to effortlessly display the kind of lifestyle and enjoyment a new buyer would experience if they purchased. With entry and mid-market homes, its more typical to get only digital staging only if the home is not furnished by the residents.
Better Sales Materials - In addition to better photography and videos, the luxury sector buyer is frequently presented with a gift bag or swag at newer developments, bottled water, full color brochures, and often an additional list of resources including interior designers, nearby restaurants & schools, concierge services and housekeeping options.
More transparency regarding negotiability - I have very little resistance getting listing agents to share their negotiability when working with a luxury buyer. Sometimes the agents will even tell me in front of a buyer. Of course, any shared 'bottom lines" must be taken with a grain of salt, but in general both buyers and sellers seem less hesitant discussing the endgame at the higher end in my experience.
More accommodating agents & showing times - The flexibility and deference given to luxury buyers is real. Evening, morning and holiday showings are offered more readily and it’s not just a reflection of a motivated listing agent, it’s also a reality that many buyers in this range have very limited schedules.
Fewer qualification questions asked - although recently I was asked by a Billionaire's Row listing agent for proof of funds from my buyer prior to booking an appointment, in the end she was satisfied with a simple Google search. Sometimes even a Linked-in search will satisfy a seller /sellers' agent that a buyer is qualified. In many cases just a name is required, and sometimes no further questions are even asked up to and even through the contract signing.
_ _ _
These are some of the major advantages luxury buyers have when purchasing a home. There are certainly challenges of course like greater risk & higher carrying charges, but these can be offset by thorough due diligence and meaningful negotiations.
* New York City was recently ranked the richest city in the world again by Henley & Partners, with 340,000 millionaires living in and near greater Manhattan.
