By Sarah Max, CNN/Money senior writer
BEND Ore, (CNN/Money) – When money is no object and image is everything, house hunting is no small undertaking.
Among circles of the rich and famous, the names of the best real estate agents are whispered in the same breath as money managers and plastic surgeons.
What makes an agent good? “Around here it’s knowing secrets,” said Dianne Saatchi, vice president of sales for the Corcoran Group’s offices in the Hamptons, the seaside enclave on the eastern edge of Long Island. “It’s introducing your clients to houses before they go on the market, or having a list of buyers to offer to a seller.”
While big-ticket buyers want an agent who knows everyone else’s secrets, mum’s the word about their own plans to buy or sell.
“We’ve gotten very good at avoiding the tabloid people,” said Mike Deasy, a partner with Mossler & Doe, a Beverly Hills real estate firm that specializes in architecturally significant homes and celebrity clientele.
Open houses and virtual tours are generally out of the question. Many sellers, in fact, don’t even want their property advertised.
“It’s only at a client’s instruction that we will ever publicize the name of the owner,” said Laura Killam, senior vice president of marketing for Sotheby’s International Realty “It’s rare that we get that instruction.”
In fact, prospective buyers are often screened before they ever set foot in a multi-million-dollar house. “If the person is unknown by everyone in the office they do some discreet checking,” said Killam. How discreet? She wouldn’t say.
Not any house will do–
When it’s time to buy, clients usually have an idea of how much they think they should spend. “It’s usually not about the money,” Saatchi said. “There are times in the economic cycle when people like to say they paid a lot of money for a house and then there are times when getting a good deal is a trend.”
“Right now people want their real estate investments to make them seem wise,” she added.
Buyers who have only recently become famous are usually quick to make up their minds about a house. “They want to create the right image right away,” said Deasy. It can be quite another story when they’re ready to buy a second or third house. “We’ve had clients looking for houses for up to eight years,” said Deasy.
Although some wealthy buyers send business managers or decorators to screen properties, many prefer to work directly with the agent. “There is a peculiar amount of intimacy with clients,” said one agent who asked not to be named.
“You hear things like people needing two king-sized beds in their master bedroom, or they want ‘happy’ houses and have friends over to ask if the house is ‘happy,'” said the agent. “I had one buyer ask me if the architect was ‘the kind of architect she’d want to tell her friends about.'”
Agents who deal with luxury property have to be very comfortable in affluent circles, said Barbara Salerno, vice president of consumer marketing for Coldwell Banker. In order to be affiliated with the firm’s “Preview” brand agents go through a training program that specializes in this segment.
They don’t learn table manners per se, but they do learn how to “walk the walk and talk the talk,” said Salerno.
Closing the deal for “Mr. Smith”–
In many respects it’s easier to work with well-to-do clients, say agents. “They don’t sweat the small stuff. They let the lawyers handle it,” said Holly Fabyan, with Coldwell Banker in Manchester, Mass. “It’s very different from a buyer staking his or her life savings on a house.”
They typically pay cash or finance property by borrowing from their own investment accounts. “Sometimes they borrow from a large bank where loans are pretty cheap for high-net-worth clients,” said Saatchi. Recently, she said, a bank was offering clients a 4-percent interest-only loan fixed for 10 years, provided they had $6 million in liquid assets.
The agent’s take is generally around 6 percent for houses up to $5 million. “After that, commissions get negotiated down, sadly,” said Saatchi.
Does the house have good bones? —
It’s not enough to spend a few million on a house. According to survey by Coldwell Banker, more than half of all million-dollar plus buyers plan renovations.
“We just came back from looking at a 1920s house in Greenwich that’s drop dead,” said Ralph Gillis of Gillis Previti Architects in New York. “I’m ripping everything out.”
The 10,000 square-foot house was renovated four years ago, he said, and the buyers plan to spend $4 million renovating again. That’s not including decorating. This is par for the course. The kitchen is often the first room to get a make over, usually for a budget of $100,000 to $200,000.
Media rooms are another popular addition. “It used to be gyms,” said Saatchi. “Now it’s screening rooms.” In fact, the technology costs for a renovation can easily add up to $500,000, according to Gillis. Everything – the televisions, stereos, lights, heating and security – are consolidated into a touch-screen monitor that sits on the owner’s coffee table.
Recently, the most popular renovation of all is the tear-down. Buyers pay millions for a property, then demolish it and build a new one from scratch.
“People want to buy location, and vacant lots are hard to come by,” said Gillis. In fact, he’s recently decided to tear down his own summer home in the Hamptons and start anew.