If you're in the market for a luxury home and this is your first time buying one, there are a few things you need to understand. Buying this type of property is not simply a matter of purchasing a home that is much greater in price than a median-priced home; there are other considerations. The following information contains just a few ways that buying a luxury home is different than buying a standard home and how you need to approach the process of buying one.
You need an agent with experience
Every real estate agent would love to make a commission on the sale of a luxury home, but this doesn't mean they have the experience to provide the necessary service you will require. You need to find an agent that has sold luxury homes in the past and has done so in the area where you are looking to buy. This type of agent will have an association with many sellers and buyers of luxury properties, so they will be able to go beyond the typical listings that any real estate agent has access to. This type of agent understands the importance of confidentiality for their clients and understands the unique needs that you have.
Visit the local area
Everyone buying a house will get a walkthrough and be told all the great features of the home. And, if you have already expressed your requirements, a good agent will find two or three properties that are attractive to you. However, you need to drive around the area to discover what is around the house. Look at how other properties are valued. You don't want to buy a high-priced property that is more expensive than the surrounding homes, or you may be buying a house that will not increase in value. Likewise, you need to look for types of businesses near the property and the condition of these commercial properties. They can be a window into the future of the housing market for the residential area. Pay attention to properties under construction as well as undeveloped land parcels. Are their plans for future construction? What is built there can affect the future value of your home.
Make sure your finances are in order
Lenders are more cautious with large loans for luxury homes. For lower-priced homes, income is straight forward, and there is a heavy emphasis on your credit report. With luxury homes, there is an emphasis on your income and assets. You need to make sure your income is well documented before you start shopping.
They are called luxury homes for a reason; they are not a necessity. They are more susceptible to a drop in price than other homes. Take your time shopping and find a real estate agent who has experience with them. Always keep your eye on the investment angle of a high-end home, and realize that even wealthy people can lose money on this type of house.