The pricing of Ultra Luxury Properties in Beverly Hills and surrounding: is it ‘Art’ or is it a ‘Science’?
Over the years, there have been numerous discussions about the ’Art’ or as some people call it the ‘Science’ of how to price Ultra Luxury Properties. I consider it a combination of Art, Science and Psychology. Clearly all three need to be balanced in achieving the clients wants and needs. This of course must be determined prior to accepting the property for listing and selling it. Sadly, many agents get too excited about being invited to the “dance” aka the opportunity to discuss with the seller the marketing and selling of their property. Hence, they fail to ask the most important questions about the motivation, as well as the goals of the owners. This of course leads to a long and expensive time and effort for the listing agent and a disappointment in not achieving the wants and needs of the sellers, because they failed to focus on what the seller wanted.
Some Reality Show TV Agents, who due to their position end up getting exposure which is perceived as an “authoritative positions” and then in turn some of the media outlets give them additional exposure, this is just a fact of life. Never the less, just because they are getting exposure of their point of view, it does not necessarily make their observation accurate. It reminds me of Politicians, just because their message received a lot of coverage it does not make their message “right” or “accurate”.
I keep hearing “…they don’t build them like they used to…there is really no way to assess the value, because there are no comps…” I beg to differ.
There are times when the list price is an “ego price”, with that said, I hold the listing agents responsible for not having a “heart to heart” discussion with the sellers. Amazingly sellers in the Ultra Luxury Market depend on the advice of the Agent, hence we owe it to them as Realtors to give them sage advice.
To give you an example, there was a parcel of land in Beverly Hills, 90210, which was listed on the market for just barely south of $50 million dollars. For an entire year I saw some aggressive marketing by the listing agent and it did not sell. Buyers and their agents can figure out what the value truly is and although the property is “very special” if you know what you are doing you can come up with a “sellable list price”.
That said, there is a formula that “The highest price listing” will cause a lot of buzz and short-term attention. Listing agents and sellers like that, because in a short amount of time a lot of eyes around the Globe get to see the property and if there is interest they can view and submit an offer. This in turn can be done only if the seller really wants to sell, otherwise the property will continue to linger on, no matter how much marketing is done after it.
The misconception is, that at these levels, the “property will eventually sell for whatever the market will bear”. Not really ,it depends on the “seller” if they really want to sell or not.
An example, that comes to mind to illustrate my point is a very large parcel of land, which was originally listed in Beverly Hills, 90210 for around $150 million dollars and as the offers came in the seller kept raising the price. Then, when the asking price was around $250 million plus, the offers continued coming in. Clearly the seller was looking for the highest price that is out there. Now that the asking price is $1Billion I am confident that the offers slowed down a bit. This is a clear example where the offers that came in were ‘real’ but the seller did not need to sell hence did not.
There are numerous other examples not just in the Ultra Luxury Land Market but in the Ultra Luxury Home Market as well.
Los Angeles real estate is probably the most sought after, not only in the nation but on the Globe due to being such a safe investment and our fantastic climate. If you are considering buying or selling a trophy property, please reach out to me directly! I will provide you with straight forward, no nonsense advice on how to sell or buy your Trophy Property in Beverly Hills and vicinity.
If you are considering buying or selling a home, a luxury home, luxury investment real estate, luxury vacation homes, or luxury beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Marina Del Rey, Venice or Malibu, feel free to contact me at 310.486.1002 (m) or homes@endrebarath.com or visit one of my websites at http://www.endrebarath.com. I am a Pet Friendly Realtor and I contribute a portion of my commission to local animal rescue organizations.
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