Seth Godin is an author, marketing guru and blogger whose posts are often short and sometimes cryptic but always interesting. This is a short post from June 20th that has relevance in the Durham luxury home market today.
Your sales force and your customers may scream that you need to lower your price.

It’s not true.

You need to increase your value. If people don’t want to pay, it’s because you’re not delivering enough value for the money you’re charging.

You’re not selling a commodity unless you want to.

How does this advice apply to real estate, especially luxury real estate?

As the CEO of a small business with one purpose…to sell your home…in a slow market it is quite conceivable that your marketing director/listing agent and potential customers would put pressure on you to lower the price. The irony is that often you don’t have to add value as Godin suggests, all you have to do is point it out. Levittown, PA was the original “commodity” suburb, with row after row of similar houses…six models actually…built after World War II. Luxury homes are the antithesis of commodity homes. Yet so much copy written about luxury homes focuses on commodity features such as size and rooms and not the experience of living in the home or the community. Size and quality in the shelter component of a luxury home are a given. The added value comes from the less tangible things. To get the best price the marketing materials need to illustrate these things.

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Lot’s of buzz last week at Rotary about the Somerhill Gallery grand opening event the previous Saturday at the old Venable warehouse in Downtown Durham. The relocation of this long term fixture of the Chapel Hill cultural scene to Durham is just another thing to brag about when marketing Durham’s luxury homes. This video was the fourth of four posted on YouTube about the move. View this one here or click YouTube and view all four.

The Venable Center is another project of Scientific Properties, one of the development companies making a big impact on Durham. Click on the link for more about Venable Place and other Scientific Properties projects.

Caught in the dialog on the video is the strong possibility of the opening of another new restaurant in Downtown Durham adjacent to the gallery. Can’t wait to visit myself.

Since about 1987 except for a few years when I was living in Durham but working in Raleigh I have been a member of the Downtown Durham Rotary Club. This club is over a hundred years old and Durham’s largest Rotary Club. For the last couple of years the program committee headed by Don Stanger has had some of the best programs that the club has ever had. (Don is also the current president of the Hope Valley Homeowners Association.) The program today was the final one in a series of five programs about media that Don organized with the help of Dr. Phillip Meyer of UNC’s journalism school.

The topic today was “new media” and the panel included two of Durham’s most prominent bloggers, Kevin Davis of Bull City Rising and Gary Kueber of Endangered Durham. Although the goal of these programs has been to share insights about the evolution of the media, because both Kevin and Gary blog about Durham the discussion ended up more enlightening in terms of Durham’s transformation. I highly recommend that anyone interested in civic life in Durham, take the time to use one of the free services like Google Reader to subscribe to these blogs. One of the interesting aspects of the program this afternoon was Professor Meyer’s attempt to elicit some indication from these panelists about how they might “monetize” their efforts or, in other words, make some money doing what they do. It’s pretty clear that neither has that in mind or even thinks it’s possible in the near term. They do what they do more out of service and passion for the community than any hopes of making a lot of money. My motives are not that pure.

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Barbara Corcoran, according to Fortune Small Business via CNN.Money.com is the self-proclaimed queen of New York real estate. Corcoran founded the Corcoran Group 35 years ago and sold it in 2001 for $66 million. To put it mildly, she is colorful. The profile reports that when sales of her business book Use What You’ve Got were disappointing she renamed the paperback version If You Don’t Have Big Breasts, Put Ribbons on Your Pigtails…obviously not concerned that the males left in the industry might not look for her advice. The gist of the article is that her new ambition is to become a TV personality. Indeed, she’s a regular commentator on the Today Show on NCB where I saw her this morning.

The segment this morning was addressing the issue on everybody’s mind these days about buying and selling in a down market. There is no question that Ms. Corcoran is up to the role of providing an interesting segment on TV but there are some reasons to question some of the advice. First of all, all real estate markets are local and general advice from somebody with 35 years of experience in one of the most atypical markets in the country should be examined closely. But she is thought provoking. (more…)

One section of the Newcomers Guide to Buying Luxury Homes in Durham specifically addresses some of the technical issues that can vary from state to state. The most important of these is the concept of agency. Until a few years ago, all real estate agents technically represented the seller in a transaction, even when that agent was engaged by the buyer. The real estate commission decided that buyers deserved equal representation and formally established “buyer agency” with its own set of practices and requirements. All licensed agents are licensed to represent either buyers or sellers and under certain circumstances they can represent both in the same transaction. When an agent or broker (all licensed agents in North Carolina are now brokers) signs a listing agreement with a seller, or a buyer agent agreement with a buyer, they assume some important obligations to protect their clients’ interests. When interviewing buyer agents it is important to be careful about what information you share with them about your motivations or financial situation until you actually sign an agreement. An agent may show you homes without a buyer agent agreement in place, however, at that point the agent is technically representing the sellers and should use any information they have learned from you to get the best deal for the seller, not you. This troubles some buyers who do not want to commit to a buyers agent that they may have just met. However, most buyer agents will work with a client with a short term agreement or readily release a buyer from an agreement if some conflict develops. Per the Commission regulations, one of the first things any agent you talk to in a
“meaningful” way should do is explain these agency rules. This is not only a NCREC regulation, it makes sense and protects the buyer’s interests.

One of the first things I like to do with a new buyer client after discussing agency is review a flow diagram I put together that illustrates all the steps and different professionals that are typically involved in the home buying process. This only takes a few minutes but it makes subsequent communications much better and minimizes surprises in the process.

The link is to a terrific post last month to Reyn Bowman’s Bull City Mutterings. It relates Durham’s growth to the growth in the number of hotel rooms and the importance of tourism. Very interesting way of looking at things. Reyn is the leader of the Durham Convention and Visitor’s Bureau and has been aggressively selling the community’s image for many, many years. His leadership is responsible for the “branding” effort that was discussed in a post here this week. I’ve added Bull City Mutterings to the blogroll on the left and added it to my Google Reader and encourage anyone interested in a unique perspective on Durham to do so also. As mentioned many times before, Durham’s image, or brand, has to catch up with the remarkable developments that are taking place to really ignite the luxury home market.

I began this blog a few months ago after watching the luxury market in Durham for several years. For most of that time I was a licensed agent but not actively seeking clients.  For almost two years I was helping manage another firm and my bosses wanted me to focus on that and not my own clients.   I left that firm and did a renovation of an investment property that I sold last year.  As I refocused on what it would take to market homes in the luxury segment it became clear that there was nothing wrong with the “inventory” in Durham. The real problem was the Durham “brand.” I began to feel strongly that reviving the luxury market in Durham was going to require that sellers in Durham and their agents adjust their marketing to address this directly. The Durham Luxury Home Report suggests a number of ways to do this.

As the blog started to appear in the search results for key phrases, I realized that potential buyers were going to find the site too. I needed to add some emphasis to why this is such a great place to live.  I started posting more about the things that make it desirable and made available another report for Newcomers to the Luxury Market in Durham.

The information needs of sellers are different than those of buyers.  Straddling the line between providing candid marketing advice to sellers and selling the community to buyers is difficult.  Ironically, I think it reflects one of the things I love about this community. We have a remarkable capacity for arguing out our problems in public. For the last few years, the finer neighborhoods in Durham have been one of the region’s best kept secrets. It’s time for us marketing real estate to help share with the world what is great about this community.

A friend and reader of the Durham Luxury Real Estate blog forwarded an article to me about branding in real estate. The analysis was primarily intended for large national developers but it made some points worth considering in our effort to improve the marketing of luxury properties in Durham.

This blog has taken the point of view that one of the reasons, if not the primary reason, that the luxury home market in Durham is not more vibrant, is that the Durham “brand” has not caught up with the emerging reality. This is not a unique observation. During the last couple of years the Durham Convention and Visitors Bureau has headed up an effort to brand Durham as the city “Where Great Things Happen.” The group that developed this slogan and the the graphics associated with it represented a broad spectrum of community groups. As you might suspect, some compromise would be necessary to reach a consensus. Nevertheless, if promoted aggressively and adopted widely, this will improve the situation. To put some legs under it, it needs a more concrete emphasis. Just like marketing homes, the community needs to emphasize what marketers call a “unique selling proposition.” (more…)