Believe it or not, many times, wealthy and/or famous individuals do their own real estate Googling. It’s true. You know what else is true? They, many times, end up risking their privacy and harming their buying power. Having our own Celeb & Sports Division, we have seen numerous high-profile transactions. From developments taking years longer than expected, to “luxury agents” Facebooking the private addresses of famous names in the music industry, bad things happen. It’s hard to believe.
One of these individuals’ most common mistakes is browsing and registering on developer websites without proper representation. This action could potentially sacrifice their right to sole representation. Ask yourself – why would you want to buy real estate directly from the developer when their sales team represents the DEVELOPER? Why do wealthy people think it is smart to contact a developer directly? In most cases, it is NOT a smart idea.
Benefits Of Representation:
Another pitfall that wealthy or famous individuals fall into when buying luxury real estate is thinking one dimensionally. Not only do they tend to buy directly from developers or listing agents (who already represent the seller), they end up making bad investments. Look throughout the history of wealth and fame and you will see stories of bad real estate purchases. Of course, if you buy enough real estate, you WILL end up losing money somewhere. But why is it so many celebrities end up buying the WORST properties?
Privacy is another big concern when dealing with high-profile clients. There is a right and wrong way going about showing real estate to someone with high wealth or status. WLH’s Celeb & Sports Division prioritizes confidentiality. It is a REALLY big deal to us. Currently, we have 40 unique individuals registered for sales at the upcoming Fendi Private Residences project. The types of people seeking this project are the wealthiest in the world. Protecting the privacy of our FENDI list is a massive priority of ours.
Let’s look at a real-world example to illustrate privacy is important in the real estate industry. This particular story involves a famous hip hop group that bought a property. Upon closing escrow, the group’s agent shared the news on social media. This wasn’t a calculated move nor was it part of a marketing campaign. No, this was the agent, perhaps innocently, but definitely irresponsibly, broadcasting their client’s private business.
This anecdote reminds us all, famous or not; real estate transactions should be treated with gravity. Ever felt a sense of regret or unease after buying a car? Ever wonder if you made the right choice or got a good deal? Multiply that feeling a hundredfold when it comes to buying real estate.
Another point of discussion that comes up in high-end transactions is the idea of proof of funds. If a seller’s agent requests proof of funds, does sharing a high account balance harm a wealthy home buyer’s negotiating power? While there are MANY steps that should be taken when it comes to ‘proofing up’, it does not automatically harm a buyer to show they have a high-balance account. Wealthy individuals buy and sell real estate all of the time. If they each have a good agent, it is each agents’ duty to negotiate for their client. A person like Elon Musk could never buy a piece of real estate (in a fair manner) if this wasn’t the case. With that said, going into a dual agency transaction as a wealthy person without being a good negotiator (or having a good negotiator by your side) could be disastrous.
In this blog, we’re not trying to just educate the wealthy and/or famous. This is a post about raising awareness for everyone. Why? Because regardless of wealth or status, it’s essential to educative yourself. And then to protect yourself. Rich and famous people might recover from their mistakes, but the average buyer might not. We hope this makes sense. Thank you for taking the time to stop by LUXE BLOG. We will see you next time.