The New Money Real Estate Buyer

Good day readers,

While Crested Butte’s recent phenomenon of million dollar plus property sales continues to grow, it is crucial for real estate brokers operating in our market to adjust their understanding of the "new" Crested Butte real estate client. The skyrocketing number of affluent buyers demand special attention and better levels of customer services. The article below outlines some recent survey results regarding "new money" real estate buyers.

Thanks for visiting today,

Channing Boucher

Borrowed from Daily Real Estate News  |   February 26, 2007

Affluent Buyers Want Privacy, Confidentiality

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 homes is a self-made millionaire with "new money."

“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.

The top professions of luxury consumers include the following, according to the Coldwell Banker Previews survey:

  • Business or corporate executive: 88 percent
  • Physician: 37 percent
  • Lawyer: 31 percent
  • Financial professional: 30 percent
  • Entertainer, entertainment executive, or professional athlete: 14 percent

A typical down payment for luxury consumers is 20 percent to 30 percent, or about $400,000 to $600,000 on a $2 million home, according to survey respondents. Additionally, a quarter of clients put down as much as 30 percent to 50 percent of the sale price, the survey found.

Affluent Clients Want to Be Discreet

Practitioners serving affluent clientele are expected to provide a high level of personalized service to both buyers and sellers, according to the survey.

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,” Moore-Moore says.

Other necessary skills for real estate professionals working with luxury consumers, according to Coldwell Banker’s survey:

  • Customized service: 69 percent
  • Ability to work well with executive assistants, CPAs, and attorneys: 44 percent
  • Inside scoop on the market: 36 percent
  • Ability to provide emotional support: 17 percent
  • Personal rapport with clients: 11 percent.

Must-Have Amenities

When asked about "must have" amenities that buyers require in their luxury homes, 60 percent of respondents answered that their customers want media rooms and 60 percent said their customers want "wired" homes.

On the flip side, the sales associates polled said that their clientele believe that gourmet kitchens, granite countertops, and wet bars are no longer considered luxuries.

— By Camilla McLaughlin for REALTOR® Magazine Online

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