Real Estate

Marketing at the high end

Zillion-dollar properties require special effort by Realtors

Everyone knows the local real estate market is hot, with many homes continuing to sell almost as soon as they are listed, often with multiple offers and for well over the listing prices.

But there are local properties that often require a bit more work by Realtors, the ultra-high-end properties that fetch $10 million or even $20 million or more.

How does one find the right buyer for a $35 million, 92-acre five-lot subdivision in Woodside; or a 7-bedroom, 10-bathroom Palo Alto home on an acre in the foothills for nearly $12 million; or a 9,000-square-foot English Tudor mansion in Atherton listed for $28 million?

Increasingly, Realtors are reaching out to foreign buyers, often by making trips to where those buyers live.

Ken DeLeon of Palo Alto-based DeLeon Realty said he and a team will be visiting China in April to attend two real estate trade shows in Beijing. The company will be spending close to $100,000 on the trip, which will include two Mandarin speakers in the team of four, DeLeon said.

They will bring along marketing materials in Mandarin that are designed to impress, including 30-page brochures on expensive paper that cost $20 each to produce. "The Chinese heavily correlate the quality of the marketing materials with the quality of the home," he said.

His company has been successful in part because of relationships it has built in China over a period of years, a concept called "guanxi," DeLeon said. "Over the years they start to trust you and then they refer their friends to you," he said.

About half the very high-end buyers are "elite tech" and about half international, DeLeon said. Nearly 80 percent of the international buyers are Chinese, but some Russians, Indians and some Europeans also buy high-end properties locally, he said.

DeLeon's website content has also been translated into Mandarin. It features videos that cost up to $10,000 to produce, with professional actors and using drones for aerial shots. DeLeon says he recently sold a $14 million home, without the buyer seeing the home in person.

"They really go off our videos," he said.

Alain Pinel, who works for Intero Realty's Woodside office, recently visited Japan, China and Taiwan in search of new customers. Closer to home, Intero recently sponsored a tour of luxury real estate celebrating Chinese New Year. On two Fridays in February, potential clients could visit a selection of the firm's local listings, including Sand Hill Estates, a $35 million property located off Lawler Ranch Road near Interstate 280. The firm enticed visitors with treats at each property including wines from Thomas Fogarty and Woodside Vineyards, Wells Fargo Private Banking, Opera San Jose and San Jose Jazz. At the Sand Hill Estates property guests got a free lunch.

Realtors Dana Cappiello and Cutty Smith share the listing of the Sand Hill Estates property, and they say the event, which was Cappiello's brainchild, was a big success. While none of the homes showcased immediately sold, "through that event we brought in more interest that we foresee turning into sales by the end of the year," Smith said. "It brought in client interest, and we plan on doing more of these events."

DeLeon said it is common to have large events such as catered parties to let potential clients and neighbors know a high-end property is for sale.

Mary and Brent Gullixson, a mother-and-son team who work for Alain Pinel Realtors in Menlo Park, currently have an $18.35 million listing in Atherton, a new six-bedroom, nine-bathroom, 15,418-square-foot home.

"The difference in marketing luxury real estate from the average home begins with the agents themselves," Brent Gullixson said. "This is not a market where you drop the lockbox out front or send in your area specialist to show property. We are at every showing to help explain material knowledge about the home, property or surrounding area."

"As far as I can remember all of our sales at this level have been paid in cash," he said.

A 2014 report by the National Association of Realtors agrees. "International buyers are more likely to make all-cash purchases when compared to domestic buyers," the association reported.

According to the report, in 2014, nearly 60 percent of reported international transactions were all cash, compared to only one-third of domestic purchases. Why? It can be hard for foreign buyers to get a loan because they don't have a U.S. credit history, Social Security number or local banking history.

Between April 2013 and March 2014, Chinese buyers spent more than those from any other country, spending an estimated $22 billion, with an average sale cost of $590,826, according to the report.

China was also the fastest growing source of transactions, accounting for 16 percent of all purchases, up 4 percent from last year. Mexico ranked third with 9 percent of sales and India and the U.K. both accounted for 5 percent. Only Canadians made more purchases in the U.S., accounting for 19 percent of the sales, the report says.

Real estate agents also advertise in foreign language publications, such as the Epoch Times.

One of the homes featured on the Intero tour was a Woodside home listed for $17.5 million. Realtor Karen Gunn said the 8,660-square-foot home "really is a trophy property," with room for entertaining up to 300 people at a time. "Hotel-type tents can fit on that lawn," Gunn said.

The home, designed by architect William A. Churchill, has lots of teak, lots of windows, a sauna, pool, wine room, dance studio with a Murphy bed, amazing views, a billiards table, five bedrooms and six bathrooms. The master bedroom has a fireplace and a balcony; there's a full bar, a gym, and solar panels that assure the home has only $3,000 in annual power bills, Gunn said.

There is also a four-car garage with a Tesla charger and an office with room for four people.

While the market for high-end properties can sometimes lag -- the Flood Estate in Woodside has been on the market since November 2012, originally listed at $85 million and reduced to $69.8 million in April 2013 -- most Realtors are not worried.

Smith said that since the end of January, she has sold four homes in Woodside, with the listing prices ranging from $1.9 to $3.2 million, with more than one selling for more than the asking price.

Those commissions might help pay for a number of brochures and drone photo shoots.

Almanac Staff Writer Barbara Wood can be emailed at bwood@almanacnews.com.

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