Los Angeles has long been considered one of the premier residential real estate markets in the country, with exclusive addresses in communities ranging from Beverly Hills to Malibu that often sell for top dollar. Navigating that market has always required expertise and a keen understanding of value, and that is more true than ever amid rising interest rates.
“We’re continuing to see a high level of demand out there from buyers. Volume is down, but if you can buy smart, there are still good prospects out there,” says Colin Wellman, real estate broker and principal at the Los Angeles-based real estate firm Campbell Wellman. Buying “smart” means avoiding a common mistake — focusing only on price per square foot as the benchmark to determine value.
Buyers need to drill down past the per-square-foot price on a property to be able to answer the “why” behind that price, says Todd Stein, real estate agent and principal at Campbell Wellman. What’s going into that price — is it the lot, the location, the condition of the home? “If you don’t understand the ‘why’ behind the price per square foot, you might end up overpaying,” he says. “On the sell side, you might be leaving chips on the table because you didn’t drill down enough to look at other attributes that can add value beyond just square footage.”
Understanding the different ingredients that drive value is an important component that sets Campbell Wellman apart from other real estate brokerage firms. The firm’s founders, Wellman and Stein, started the company more than 20 years ago as a residential appraisal business and added real estate brokerage soon after. Campbell Wellman has performed more than 30,000 appraisals across the L.A. market over the past two decades.
Know the “why” behind values
That appraisal foundation has served the firm well in providing a keen understanding of property values and pricing. “We are data-driven, and we are able to break down attributes beyond the realm of price per square foot,” says Stein. For example, The Real Deal reported on the sale Campbell Wellman listed for a 2.9-acre property in Beverly Park for $28 million. In that case the land, along with a “once-in-a-lifetime” opportunity to gain entry into a gated community, was what drove the sale price.
We are very focused on helping our clients understand land value. With knowledge beyond price per square foot, our clients can make informed decisions during a deal to maximize their value, says Stein. They can’t delineate the difference in how much you are buying is the land and how much of what you’re buying is the home. You need to separate that out to get a better sense of what you’re buying.
For both buyers and sellers, value and price are often at the heart of key decisions. To better serve its clients, Campbell Wellman also obtained a contractor’s license several years ago. That contractor’s license allows the firm to not only provide seamless service in overseeing projects, but it further enhances their expertise when it comes to value. For sellers, what’s the business case for making improvements that can help to maximize the sale price? Where is spending warranted and where is it not?
“Being able to communicate and show that value proposition has been incredibly helpful for our clients, because we are able to provide them with that additional level of service and knowledge,” says Wellman.
Oftentimes, when a client is buying a property, they want to make changes to better suit their needs or create that dream home. Everyone has a “wish list” of what they would like to do. Instead of farming that out to a third party, Campbell Wellman can step in and provide those services, which also helps to better serve clients and strengthen relationships. “The appraisal and construction background that we have gives our clients an added layer of confidence in the expertise and high level of service that we deliver. This also helps fortify our relationship with our clients long-term, which is our main goal,” says Wellman.
Building long-term relationships
Wellman and Stein grew up in the West L.A. communities of Brentwood and Pacific Palisades, which gives them the added advantage of an insider’s view of the local market. “We are both third-generation West Los Angeles natives, and we know every nook and cranny of this market,” says Stein.
When we started the appraisal business, we were going up and down streets that we grew up on, and we very quickly elevated to the top because of our local knowledge.
These days, Campbell Wellman services clients across the broad L.A. market. Wellman and Stein alone are nearing a billion in real estate sold, and word-of-mouth referrals are the main source of new business.
Campbell Wellman also distinguishes itself in its approach to the business, as its agents are not just chasing commission checks. The firm’s team of Realtors focuses on achieving value for clients, whether they are buying or selling a property. On the buy side, Campbell Wellman agents make a point to discuss the positive and negative attributes of a property. It’s important that clients can make a purchase with confidence and not end up with buyer’s remorse and a home that is not going to be a good fit, notes Wellman. “When a client hears that their agent doesn’t want them to make an offer on a property because the agent is looking out for their best interest, that becomes a client for life,” he says.
On the sale side, that means working with clients to understand the current market value of a property and what property improvements might be prudent to help maximize the value. “We are always upfront with our clients on where we think a home will sell for and why — even if it causes us to lose a listing,” says Stein. “At the end of the day, we’re not going only for a sale, we’re focused on the relationship and what is best for our client.”