Buying a new home can be a difficult and confusing process. Oftentimes, there are many unknowns to be answered: How much home can I really afford? Do I qualify for a home loan? What size do I want my home to be? What kind of community do I want to live in? With luxury real estate, the stakes are even higher.
Nowadays, luxury properties are no longer limited to mansions in a city’s most coveted neighborhoods. With vacation homes, condos, penthouses and secluded properties all on the market, it takes some extra effort to find a property that really fits your needs.
Luckily, there are many experts out there who have shared their tried and true tips and strategies for buying a new luxury home. Here are some of the ones that we think are especially important:
- Do your research.
- Work with a local expert.
- Obtain a pre-approval record.
- Due diligence.
- Think about the future.
While this tip seems like a no-brainer, research is a step that shouldn’t be overlooked. The internet is abound with resources about the market and will allow you to form ideas about what you want and don’t want. According to the 2013 Profile of Home Buyers and Sellers published by the National Association of Realtors, nine out of 10 buyers used the Internet at some point when looking for a home, and 43% of recent buyers first found the home they purchased online.
Said agent Elizabeth Blakeslee, “It’s critical to have a good buyer agent who is familiar with the area you want to buy in. There’s a bit more control on access to high-end properties in terms of fewer open houses and more appointments have to be made to see them.” While using a good buyer’s agent is critical in any type of home purchase, it is especially important when purchasing luxury real estate. One of the most important considerations is price – you certainly don’t want to overpay for your new home. An agent familiar with the luxury market may have inside information about listings before they even hit the open market.
The loan process for luxury real estate typically takes longer than for smaller mortgages. When you get to the upper end of a market, there will be a lot more financial scrutiny. Even if your financials are in good order, it may take 45 to 60 days to secure a loan. While a pre-approval letter doesn’t ensure you’ll be approved for a mortgage, it will put your seller at ease.
It’s important to take some time to properly inspect your potential new home before purchase. In many cases, luxury real estate will have amenities that may require specialized home inspectors, such as: pools and spas, fountains and ponds, exterior fireplaces, automatic systems, and more.
Even more, look beyond current condition and realize that any property, whether it is luxury real estate or not, can be personalized.
“Make sure you know what building is planned around you. What happens if someone pushes the bar and builds another building even taller?”
“Know the timeline. You don’t want to tie your cash up for a long period of time if there are any kinds of construction delays.” Alexander Chaparro, @properties, Chicago