Selling luxury homes is not all about high heels and hair extensions. That’s the trouble with the Netflix show, Selling Sunset — and its more recent iteration Selling The OC — they’re not quite reality.
Set in big-money real estate firms in Los Angeles and neighbouring Orange County, the show’s Amazonian women realtors make seven-figure commissions with little more than a champagne viewing and glossy Instagram account. Irish realtors operating in some of the most expensive postcodes know that’s not how it really happens.
“Is it as entertaining as that in real life? No it’s not,” says Alan Stenson of selling high-end property in New York. The Mullingar native is a director at Brax Reality, a boutique investment sales firm in the Flatiron district of Manhattan. He specialises in properties worth anywhere between €5 and €50 million ($5 and $50 million), and his clients are high-net worth individuals from all over the world.
The New York real estate market is cut-throat. It’s survival of the fittest. “It’s 100 per cent commission-based. You eat what you kill and if you are not killing on a weekly or a monthly basis, you starve,” says Stenson.
The amount of commission to be earned on a property is a key hook of the “Selling” franchise, with some properties generating fees in the seven figures. But does the agent get to keep all of this?
Realtors of course, are tight-lipped about their earnings, but it’s generally understood that a property offering 5 per cent commission will be split between the person who represents the seller and the person who brings the buyer. After that, the brokerage gets a cut. So of the 2.5 per cent made by the agent, the brokerage might get 30 per cent.
Stenson arrived in New York a decade ago and his early years transacting property there were far from glamorous. “When I landed in New York and I first started brokering, I was given a computer and a phone and a certain area and left to my own devices. If I didn’t make commission, I didn’t get paid. What people don’t see from shows like that is the amount of work and time and energy that goes into getting your business off the ground.”
“In my first year and a half, I made no money. But then my business skyrocketed and that was down to putting in 80-90 hour weeks every week. Working six or seven days a week for a two-year period. People don’t see the blood, sweat and tears you put in, especially with these TV shows.”
“You think you can just start selling a $20 million building or a $50 million building with a click of the fingers and that’s it? What people don’t realise is that you have to start from the ground up.”
Some of Stenson’s clients are looking for a home, but they want a good investment too.
Properties in Greenwich Village and 5th Avenue on the Upper East side are in high demand. His clients typically want an entire building, delivered 100 per cent vacant.
If you combine a public figure and a property that is terribly overvalued, that is going to get in the press
“I’m doing a couple at the moment where I could have a five or ten-unit multifamily building with ten apartments. My job is to work with a building owner in getting the unit vacant for sale. If there are ten tenants, there are ten leases. We would be waiting for these leases to expire or we would be negotiating terminations with maybe some monetary compensation of tenants,” says Stenson.
Wealthy buyers want to put their own stamp on things. “They have their own preferences and their own styles. They don’t particularly like walking into a building where some guy has lived for 20 years,” says Stenson. When it comes to refurbishments, the sky’s the limit. One buyer installed two heated swimming pools and another, a top-floor tennis court.
[ Come for the houses but stay for the drama: Selling Sunset is backOpens in new window ]
Rising interest rates will impact some parts of the market but not all, says Stenson. “The New York market is nearly bulletproof, there is always a constant flow of money. In a rising interest rate environment, cash is going to be king, it’s as simple as that. There are a lot of people sitting on the sidelines waiting for things to stabilise a bit and then you’ll start to see a new wave of opportunistic funds and money coming back into it.”
Dubliner David Johnson is the founder of London-based property brokerage, INHOUS, which also operates in Dublin too. He acts for sellers and clients are ‘typically public figures, international individuals and very prominent individuals in the business world’, says Johnson.
Knightsbridge, Belgravia, Notting Hill, Chelsea, Kensington and arty Islington are his clients’ preferred areas. On his books right now is a property in excess of €33 million (£30 million), but his agency’s sweet spot is anything between €3.3 million and €22 million (£3 and £20 million).
The stars of Selling Sunset freely name-drop famous clients from the worlds of tech, sport and entertainment. Johnson’s lips however are sealed. When it comes to transacting luxury properties, discretion is part of the deal.
“I’ve seen so many individuals get it wrong. Because of who they are, an agent will maximise the situation and get as much of that as they can into the public domain and that doesn’t do the client any good,” says Johnson.
Vendors, particularly those from outside the UK, can be easily misled by the wrong agent, he says. Clients value straight talking, but they don’t always get it. “Some agents are happy to take these properties on and tell the seller they are worth such and such and on the back of that, they will win other instructions. They are using some vendors as bait to build their own pipeline.”
I’ve seen videos where you might see the agent driving a borrowed Aston Martin to get to the property and it’s all about them
Marketing a property at the right price is crucial. “If you’ve got something you know there are a lot of buyers for, you’ve got to place it right. We want to attract three or four hot buyers and that generates that competitiveness that you want to see.”
“We’ve seen scenarios where properties have been overvalued by millions. They were never going to sell at that price,” says Johnson. “If you combine a public figure and a property that is terribly overvalued, that is going to get in the press. If it hasn’t sold in six months, then the press are all over it. It just depletes the value of the property.”
Agents are becoming increasingly individualistic, he says. “You see it in London, they are Instagram-heavy and they are using their clients’ properties to promote their own status,” he says.
“I’ve seen videos where you might see the agent driving a borrowed Aston Martin to get to the property and it’s all about them. It’s this fantastic image, but you ask, have you sold the property and they say, no, I haven’t sold it.”
Seattle has a lot of tech money because we have a lot of tech industry and everything that goes with it. And there is just old money in Seattle too
Dubliner Fionnuala O’Sullivan has a long track record in the Seattle, Washington real estate market. Her clients are all from personal referrals. “They come to me because they kind of know about me up front, and that’s from being in this business 22-plus years,” says O’Sullivan.
Her adopted city is in the top 10 most expensive for real estate in the US. Home to large tech companies like Microsoft and Amazon, Seattle has an affluent and progressive-leaning population and a thriving music scene. In 2000, O’Sullivan joined an independent boutique-style company called GBK, a real estate firm of four female owners who ran the business while raising their kids. She became the designated broker at the firm which merged with large national agency Compass in 2020. Compass went public on the New York Stock Exchange last year.
“Seattle has a lot of tech money because we have a lot of tech industry and everything that goes with it. And there is just old money in Seattle too. There is just a lot of money in Seattle,” says O’Sullivan.
Properties on her books this year have included condos from €415,000 ($400,000) and homes for more than €5.1 million ($5 million).
May this year was a shifting point in the Seattle market, she says. “Up until then, there were crazy hot prices, ever-increasing, a ‘when will it stop’ market. It was overly seller-friendly, really kind of ridiculous,” she says.
Properties were getting 30 to 50 offers and cash buyers prepared to go hundreds of thousands above the asking price were failing to land something. “We are not seeing the same type of bump because people just don’t have the cash,” she says. “I would say we are now post-crazy. Buyers don’t feel as compelled to rush to buy anything unless it’s very special.”
O’Sullivan doesn’t do reality show hyperbole. Sellers expecting a roaring market may no longer get the ‘crazy number’ they expect. “If they didn’t have a frank conversation with their broker, you would see a lot of houses that were just sitting on the market overpriced.”
One thing that can grease the wheels of a sale and is far more common in the US is staging. “When I first started, I pushed back against it. I thought that’s a lot of money for a seller, is it really necessary? But I’ve come 360 on it. Staging is so important, it’s incredible. When you move to the €4.1 million to €5.1 million ($4 to $5 million) property, which would not be luxury in Seattle — I think luxury in Seattle would be more than €10.3 million ($10 million) and beyond — it has to have a certain look. All of that is important.”
Fans of the Selling Sunset genre will know that buying and selling property works differently in the US. “The buyer has a broker and the seller has a broker and it’s really the brokers on either side who drive things along,” says O’Sullivan.
If I have a buyer client, I work in their best interests, we look at houses together and I negotiate on their behalf. It doesn’t seem like a very transparent process in Ireland
A buyer faced with multiple competing offers can use an escalation addendum, she says. “This is where a buyer might say I will pay up to €1.03 million ($1 million) for this home, but if the seller receives another offer higher than mine, I’m willing to increase my offer by €20,700 ($20,000) also,” says O’Sullivan.
Another term familiar from the TV series is escrow — agents on the show often ring the bell and gleefully declare that their sale is in escrow. But what is it?
Well, it’s a neutral third party, which replaces the slow motion ping-ponging of solicitors here. The escrow is licensed to close the transaction and it holds the assets or funds before they are transferred from one party to another. Most buyers close in little over a month. Cash buyers can do it in days.
It’s very much a different approach to Ireland.
“I find it very difficult to understand how a buyer could not have representation. If I have a buyer client, I work in their best interests, we look at houses together and I negotiate on their behalf. It doesn’t seem like a very transparent process in Ireland.”
