Statistics says that greater than 90% of the population begin their home search on the Internet. Realtors spend millions of dollars and countless hours trying to figure out how to capture leads from the Internet. They place ads, buy zip codes, build fancy sites, post blogs, work their Facebook sphere, etc., etc., all in hopes of getting that Internet lead. Using these methods, many agents have done very well in accumulating hundreds of leads every month, but the million-dollar question is how many do they convert to actual buyers or sellers? Better yet, are any of those leads million-dollar buyers? Answer: not likely! It’s just not the way that the Luxury Real Estate Business works.
Don’t get me wrong; wealthy people do use the Internet and do look for homes online, but they use the Internet more as an online brochure rather than use it to look for a Realtor who can help them. Let’s face it: if a consumer is buying a 1-, 2- or 3-million-dollar home, this would not be their first rodeo. Chances are they have owned many homes before buying a luxury home. That means it is most likely that 95% of luxury buyers already have a relationship with a Realtor, or at least know of two or three that they would do business with.
After years of working in the luxury market, we have come to the conclusion that you can spend a ton of money and time trying to capture new luxury business online, but at the end of the day, it’s not going to yield you the results you were looking for. Luxury real estate is all about relationships and personal contact. It’s about referrals, your past client data base, networking, plenty of phone calls, and lots of dinners and lunches. Luxury buyers and sellers, more than any other group, really need to feel like they know you, like you, and trust you before you gain their business. The good news is that once they do business with you, they are most likely to use you again or refer you to a new client. They would do that provided you did a great job for them, stayed in touch, and showed them that you care.
I am sure that there are more than a few stories of an Internet buyer who logged on at an agent’s website and bought a 2-million-dollar house with no relationship to that broker. It does happen; it just doesn’t happen in the same frequency as in the non-luxury market.