Photo: Courtesy of Douglas Elliman
Working in the luxury real estate market means high risk, but the potential for huge rewards.We’re reading “Selling Luxury Homes,” by Jack Cotton, who founded Cape Cod’s Cotton Real Estate (now part of Sotheby’s International Realty). He broke down how being an agent in the high-end market is different than in the regular market.
From his book:
“If you specialize in high-end versus low-end real estate, your fees are higher but most likely the number of transactions you complete is smaller. Plus if you list and sell dozens of less-priced homes, it’s not as painful when one transaction fails.
On the other hand, if a $5 million sale falls apart, may months of hard work can be lost. To make matters worse, you might not have a significant number of other transactions in the pipeline to make up for the shortfall.
What benefit do most agents expect to gain by selling luxury real estate? Obviously, it’s earning higher fees than for non-luxury homes.
I won’t mention specific fees, but I assure you that, as a rule, selling fees for high-end homes tend to be larger — much larger — than most. Although many agents make $500,000 a year selling real estate, few have made $500,000 on one transaction. Holding that half-million-dollar commission check is exciting, I can assure you —if for no other reason than the well-earned extreme sense of accomplishment that far exceeds the dollar amount.”
Cotton also writes about how it takes much longer to show a luxury home, purely because of its square footage, therefore limiting how many properties you can show in a day.
Business Insider Emails & Alerts
Site highlights each day to your inbox.