Ahead of Inman Connect New York, The Agency Principal Santiago Arana talks about how he made his way into the luxury real estate niche and the mistakes he sees new agents making.
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From waiting tables to being named the no. 6 real estate agent in the United States, Santiago Arana’s success story is straight out of a Hollywood script — so it’s only fitting that he specializes as an agent to the stars in Los Angeles, where he is a principal at the international luxury brokerage The Agency.
Inman caught up with Arana ahead of his appearance at Inman Connect New York to speak about how he made his way into the luxury niche and common mistakes he sees newer agents making. What follows is a version of the conversation, edited for brevity and clarity.
Inman: What is the L.A. luxury market like these days?
Santiago Arana: It’s been very busy. I think established agents have taken advantage of a market like this. Somebody like me, I consider myself a listing agent mainly, so having inventory right now is key. That’s been one of the trickiest parts of working with buyers right now, is that there is very, very low inventory.
How did you make luxury your specialty when you were starting out?
I picked the most expensive neighborhoods and I went door-knocking there almost every day.
What are some common mistakes you see newer agents make?
They just focus on seeing what the big agents are doing and wanting to be there, but there’s a disconnect from being there and what it takes to be there. And I think that there are a number of other mistakes like not really understanding the business. A lot of them don’t understand the contracts; you should know the contracts left and right and understand what each contract means to protect your clients.
As a company owner I can observe the mistakes and errors that happen, and a lot of times it’s because agents don’t understand the contracts. They get licensed and write offers and they want to jump into business but they don’t really have an intimate knowledge of what each page and paragraph of the leasing agreement and the purchase agreement mean and why all that is very important — because that’s how you protect your clients.
Another one is not having an intimate knowledge of the market. You should pick an area that you want to work in and really understand everything about it, what’s happening there, what sells, how much it sells for, what new construction sells for, dollar per square foot, how much older houses sell for per square foot, how much land sells for per square foot for tear downs, what has sold off-market, what has sold on market — you’ve just got to understand the market intimately.
What do you think are the general public’s biggest misconceptions about the real estate industry?
Real estate agents, unfortunately, have a reputation of just being salespeople. We are, but for the ones who take it seriously, it’s a lot more than that. The misconception is that you just put [a house] on the market, take a few pictures and then you make a big commission, but we do invest a lot of money into that commission with splits to companies out of that commission. We pay ordinary income taxes on that commission, so it’s not as glamorous as it seems and it’s a lot of work. It takes a lot of work to emotionally walk a client through a whole process and handle a number of different things from transactional to emotional and psychological.
We’re coming up on the 25th anniversary of Inman Connect. Do you have any standout memories from past events?
I remember maybe about four, five years ago at Inman in New York … I spoke with Dolly Lenz. We were on the same panel, and I had an incredible experience, met a lot of great people there and I’m looking forward to speaking again in this next one.
I also have a great memory … last year they named me the number one agent for Luxury in the United States, so I’m very grateful for that recognition.