Things That Potential Buyers Must Consider Before Buying a Luxury Home

 

There is not one design, size or style that personifies a luxury home.  It could be a French manor on several acres, to a penthouse with an amazing city view.  Usually luxury homes start around $1 million in secondary markets and $5 million for higher end markets such as Chicago, New York and Los Angeles.

Although it is hard to quantify what luxury means to you, chances are that you are counting on knowing it once you see it. This is not always the case, however, so we have put together a mini-guide to shopping for Chicago, New York or Los Angeles luxury real estate. There are things that you must consider before buying a luxury home – besides finding the luxury you are seeking. The following steps will help guide you through the searching and buying process.

1.  Prepare Your Wish List

Look for specific features and amenities in luxury homes that you want.  The ideal skyline views, water access for a 30-foot yacht, or a private manor in the woods are all things that could go on a wish list. As well, the more money you have to spend, the more wishes you will have on your list.

Things That Potential Buyers Must Consider Before Buying a Luxury Home

2.  Learn How to Search for Luxury Homes

Most potential homebuyers begin with an internet search, but most high-end properties are not posted on major search engines, or MLS websites. This is because many luxury home sellers want to protect their privacy and do not put photos and information on the web.

If you are looking for a luxury home, prepare to expand your search; we will give you some tips to do this in the next point.

3.  Find a Qualified Real Estate Agent – Luxury Home Search Tips

You need to have a qualified real estate agent who specializes in the luxury market to assist you with finding luxury homes for sale.

•  Tap into a qualified real estate agent’s network – one who has an expertise in the local high-end real estate market. Find one with experience and credentials to advise you about luxury property specifics, markets and nuances. They will know of properties that are for sale, but are not known to the general public.

•  Focus on your top luxury property picks by going to see them in person because they may not share photos due to privacy concerns.

•  Make sure you trust the real estate agency because they can help you through the buying process as well.

4.  Evaluate What you Find in the Marketplace

An experienced real estate agent specializing in luxury real estate can help you determine the market value of the property. Most properties are valued based on comparing similar properties that sold in the surrounding area recently, but valuing a luxury property is challenging because there are often no similar properties to compare it to.

5.  Consider Financing and Your Down Payment

The high-end luxury home market is not affected by current strict lending restrictions as other markets are, because they are not connected.

Large Banks such as JPMorgan Chase, Wells Fargo, and Bank of America issue jumbo mortgages (http://www.investopedia.com/articles/personal-finance/102015/what-are-your-options-bigmoney-mortgages.asp); and most lenders require at least 15% to 20% down, however, more commonly those in the real estate industry are saying that 35% to 50% is more the norm.

Financing Tips

•  Be prepared with your W2s, tax returns from the last few years, bank statements and other financial statements.

•  Get your financing approved early on in the process and expect a longer approval process.

6.  Remember the Details

The scale and complexity of luxury properties raise the stakes. You should consult professionals in other industries such as attorneys, bankers, financial planners, and tax experts when you are evaluating your financing.

7.  Be Aware That you are not the Only Buyer

Do not be surprised if you are not the only buyer in the luxury marketplace. The luxury real estate market entices consumers across the globe, as investments and as homes.

8.  Due Diligence Still Applies

As with other real estate purchases, but more importantly because of the raised stakes, make sure you get the property inspected. Luxury homes are much larger with amenities that often require specialized inspections such as heated floors, pools and spas, fountains and ponds.

Before you start shopping for luxury homes make sure you follow these 8 things that potential buyers must consider before buying a luxury home.

Previous Post
Next Post

Leave a Reply

Your email address will not be published. Required fields are marked *

Share This

Share this post with your friends!