Real Estate

Real estate: What's happening at the high end?

Local real estate moves slowly -- and very quietly

By Susan Golovin

As of mid-September, Multiple Listing Service (MLS) showed 25 Peninsula properties with asking prices at $10 million and above. The lion's share, 10, were in Atherton, with decreasing numbers in Woodside (5), Los Altos Hills (4), Palo Alto (3), Portola Valley (2) and Los Altos (1).

In fact, few people know exactly how many of these properties are actually available because a large percentage of these high-end properties are not on the MLS.

"If you think these homes aren't moving it's because it is so private, and I honor that," said Keri Nicholas of Coldwell Banker in Menlo Park. She sold four homes this year priced at more than $10 million, and only one was on the open market.

Ms. Nicholas said it is often the case that deeds are blocked, trusts re-named and addresses changed before the close of escrow. It is not unusual to sign a confidentiality agreement before you even meet one of these clients.

Aside from privacy issues, there are other reasons not to list a home. Both Tom Dallas of Intero Real Estate in Woodside, who along with his partner David Kelsey sold five homes for more than $10 million (two on multiple listings) this year, as well as Ms. Nicholas, say that these homes can take up to two years to sell.

"Once you put something on the MLS the Internet creates a permanent history of former prices. Some clients are savvy to this," Mr. Kelsey said. Mr. Dallas adds that there is a certain cachet to being privy to an exclusive showing.

How does the agent reach potential clients if a home is not on MLS?

"A very small percentage of agents deal with these clients," Ms. Nicholas said. Thus, there is a tight network of communication.

"You have to think outside the box and get people what they want," she said. What that seems to boil down to is cultivating relationships and being in constant touch with what is available and what is being sought.

"From a seller's point of view, it is good to market quietly at first," Mr. Dallas said. Sometimes Mr. Dallas and Mr. Kelsey will do a pre-launch to create buzz and then do a public launch.

"It's a balancing act. You look at each property and create a unique approach," Mr. Dallas said.

For Mr. Dallas and Mr. Kelsey, thinking outside the box can mean using the home as a venue for a major charity event. They have also partnered with luxury car dealerships, using product placement to announce a prosperous lifestyle.

It is expensive to market these homes. Agents have "go to" people who provide maintenance services that get the homes in tip-top shape, stagers, and professional writers and photographers who create glossy brochures.

Gail Rossetti of Rossetti Realty in Menlo Park says that she is beginning to break into this market. She paid $3,000 to hire a helicopter and made a five-minute video of a listing in Woodside, with "24 pristine acres on Skyline."

"We filmed the community and even captured the deer on video," she said. The video is available on the Internet so that the home can be marketed internationally.

Ms. Rossetti says that she has an Internet coach so that she can stay abreast of new developments, such as websites that alert people when a home with the specifications they have cited is available. (In turn, the Realtor is alerted to customer interest.)

Ms. Rossetti, who describes herself as the rainmaker, is heavily staffed, separating out such duties as database manager, listing and closing coordinator, sales, marketing and customer service.

Some of these homes are what Ms. Nicholas describes as "specific" -- for instance, a custom home in Atherton that has two bedrooms -- and thus, more of a challenge to sell. What they seem to have, however, is construction that features custom workmanship and rare materials; a prime location; or amenities such as a hair salon, spa room, media room, garages that can accommodate major collections, elevators, state-of-the-art security systems, infinity pools, commodious guest houses, or private lots with vintage trees.

Currently, West Atherton seems to be much sought after.

Although she would give no specific information on clients, Ms. Nicholas did say that she thinks that the offshore market for these homes is exaggerated.

"I would say it is about 20 percent offshore," she said. The majority, she said, consists of clients from such areas as venture capital and high tech.

"Palo Alto is now New York," she said. "Whole companies are moving here from Boston and New York."

Many offers are all-cash, she said.

Mr. Kelsey said that the typical real-estate transaction is based on price, size and location. For these ultra-expensive homes, he said the client's priorities are quality, size and location.

All Realtor commissions in California are negotiable, and the commission on a $10 million-plus home can be negotiated at a lower rate than standard. That said, it is a lucrative business, particularly for agents who can "double end," that is, represent both the buyer and seller and retain full brokerage on both.


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