Written by Robert Price, Bōde CEO
Luxury listing sales are the highest they have been on recent record, why is this? They are similarly exposed to the same factors as the rest of the market – low interest rates, increased savings of disposable income, and historically low supply. Additionally, the hottest property type is detached homes and the majority of luxury listings fall in this category.
Traditional real estate agents have long had a stranglehold on selling luxury listings, why? A home is a home is a home is it not? Is it their reality TV shows? Is it their exotic sports cars? What makes an agent more valuable in a higher end property?
Let’s separate vanity from substance and further investigate.
Market Behaviour
Myth: An agent finds you the buyer through their network
According to the Canadian Real Estate Association, 95% of buyers use online search as their primary method of initially searching for properties and it is growing year over year. Buyers are finding properties directly online through the use of filters, honing in on the price range, location, and properties that fit their eye through pictures and 3D tours. On top of this, Agents are not permitted to mass email any other agents by regulation so their direct sales efforts are both not possible and not aligned with buyer taste.
Time Required
Myth: You are too busy and an agent saves you time
An agent becomes an additional party through the course of a transaction in terms of their schedule, priorities, and dealing with multiple clients. Showings, questions, and negotiations all require their involvement without any capacity to make decisions, creating a long, analog game of phone tag. With an empowered, online experience you take action directly and efficiently saving you time and headache when selling your luxury listing.
Tech Savvy Older Generation
Myth: It is too complicated to learn how to do it online
If you have a smartphone you can transact a property online- what is the smartphone adoption of all adults in Canada? 95%. Between 50-70 it is still 90%. Quantum leaps in convenience and control permeate the entire market. AirBnB luxe is a great example of significant luxury listings participation. Travel agents didn’t move from mass market to the luxury market… they found a new niche of complex trips for huge groups.
Value
Myth: You have a lot of money so you care less about paying commissions and maximizing value
If you are selling a $5M property paying 5% in traditional fees, you are paying $250,000 in commissions to sell your property. That is the total cost of your child’s Stanford education. According to Bōde’s data you are also selling for 1.3% more than if an agent represented you given an agent incentives only marginally change with big swings in equity equating to $65,000 more. Last time I checked, those that have earned significant wealth were the most effective at managing their money, especially if we are talking about hundreds of thousands of dollars, especially when there are better solutions.
Negotiation Value
Myth: An agent is a better negotiator than you
Irrespective of your wealth level holding a $5M property is a significant asset- you thought critically about location, micro and macro economic forces, interest rates and long term market positioning when you decided to buy that property. When you sell it, you are the most sophisticated, knowledgeable and passionate about the financial and emotional aspects of that home, there is nobody better to sell it than you.
Summary
The real estate market functions similarly for luxury listings as it does the rest of the market – with higher stakes. The only difference is paying more to agents for the same commoditized service they offer everybody.
Want to sell your own home without an agent?
Welcome to Bōde
Bōde has created a marketplace to allow you to get transparent home data, find homes for sale, and list your home on MLS (and 100+ more listing sites). We will advertise your home and walk you through the whole sale process for just 1% up to a ceiling of $10L – only when your home sells.
With your free Bōde account, you don’t need an agent – you are completely in charge of your home sale and get to keep more of the money you invested in your home!
Why Bōde?
