Profile of Luxury Clients

1. Profile of Luxury Clients

2. Survey Methodology • 730 online surveys were received in November 2013. • Respondents are Luxury clients who purchase/sell a home for over one million dollars. • Maximum sampling error: ±3.5 percent at two standard deviations (a 95% confidence level).

3. Type of Client Represented Q: Who did you represent in your last transaction?

4. The Typical Luxury Client

5. Singles made up 48% of Luxury Clients in 2013

6. Over 70% of Luxury Clients were White

7. Client Profiles

8. Over 70% of Luxury Buyers were White

9. Over 70% of Luxury Sellers were White

10. More than four of five luxury repeat buyers owned more than one property Mean: 2.4 properties Q. How many other properties does your last luxury client own?

11. International Buyers Are Purchasing Properties in California SERIES: 2013 Housing Market Survey and 2013 Luxury Clients Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

12. Profile of Luxury Properties!

13. Majority of Luxury Transactions were Traditional Sales

14. Luxury properties often had a hilltop or ocean view

15. Luxury Buyers intended Largely to use their Luxury Homes as their Primary Residence

16. Property Value Breakdown Median Price: $1,375,000

17. Buying and Selling Process

18. Buying

19. Main Reasons for Purchasing a Home Q. What primarily motivated the client in your last luxury transaction to buy within the past year?

20. Reasons for Buying – All Homes First Time Homebuyers Vs. Repeat Homebuyers Q. What was the single most important reason for selling/buying the property? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

21. The Median Number of Years that Luxury Buyers Intended to Keep the Property was 10. Q. How many years does the client in your last luxury transaction intend to keep the property?

22. One –Third of Luxury Buyers Paid with All Cash • More than a third of luxury buyers paid with all cash • The share of all cash buyers had been on the rise for overall sales until this year SERIES: 2013 Housing Market Survey and 2013 Luxury Clients Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

23. Majority of Luxury Home Clients used their Personal Savings as the source of their down payment What was the source of the down payment in your last luxury transaction?

24. Luxury clients utilized their personal contacts to find their agents. Q. How did you find the client in your last luxury transaction?

25. How Agents Find Luxury Clients Q. How did you find your client in your last luxury transaction?

26. Agents spent about 5 weeks on average looking for properties with their luxury buyers A luxury buyer typically viewed 10 properties with his/her agent before making a home purchase. A traditional buyer viewed 10 properties with his/her agent before making a home purchase Q. How many weeks did you spend looking for a property with your client in your last luxury transaction? Q. How many properties did you view with your client prior to the client making a purchase in your last transaction?

27. Luxury Home Buyer Made Fewer Offers Than a Typical Home Buyer Q. How many offers did your last client make on other properties?

28. Selling

29. Main Reasons for Selling Luxury Home Q. What primarily motivated the client in your last luxury transaction to sell within the past year?

30. Traditional Sellers - Reasons for Selling Q. What was the single most important reason for selling the property?

31. Luxury Sellers Typically Keep Their Properties Longer than Traditional Sellers How many years did the seller own the property in your last luxury transaction?

32. Luxury Home Sellers Received Fewer Offers Than Traditional Home Sellers Q. How many offers did your last client received?

33. Over a Quarter of Luxury Homes Sold Above Asking Price A luxury home typically sold with 1 percent discount below its asking price in 2013 A traditional home typically sold with 0 percent discount below its asking price in 2013. Q. What was the initial/listing price of your last transaction? Q. What was the final sales price of your last transaction?

34. Over 9 out of 10 Properties were marketed through an MLS Q. How was the property in your last luxury transaction marketed? Select all that apply.

35. Marketing through the MLS was still the most effective way to sell a Luxury property. Q. Which of these marketing techniques was most effective in your last luxury transaction?

36. The Median Amount spent on marketing a luxury property was $1,000. Q. Which of the following professionals did you hire to help assist you market the property in your last luxury transaction? Select all that apply.

37. Marketing Breakdown • The median amount that sellers spent on a photographer was 300 dollars. • The median amount that sellers spent on a videographer was 250 dollars. • The median amount that sellers spent on a designer was 500 dollars.

38. Luxury Home Prices Are Expected to Increase Q Do you think home prices in the neighborhood where you purchased will go up, down, or stay flat … in one year, in five years?

39. What Luxury Clients Needed the Most Assistance with?

40. The Takeaway • Sales of luxury properties will grow steadily as the economy continues to improve • International buyers are purchasing high-end properties in California • Luxury clients need help, especially in the negotiation process • Keep in touch with your clients