Purchasing a luxury property is quite different from buying a traditional home. Therefore, as a luxury home buyer, it’s important to have a good understanding of the process. By doing your research beforehand, you can make the best possible purchase for your needs.
Let’s take a look at eight essential things to know about buying luxury real estate.
1. You Must Invest in an Experienced Real Estate Company
Just as you would enlist the help of a real estate agent while looking for a traditional home, you’ll also need one when buying a luxury property. However, you’ll need to work with a real estate agency that has experience with high-end homes. Often, luxury property owners choose to sell their homes privately, opting to keep them off of multiple listing services (MLS). Therefore, you need a knowledgeable real estate agent who has access to unadvertised properties.
If you decide to buy a luxury home at auction, it’s still advisable to have a trusted representative. Additionally, once you identify a property that you would like to bid on, you should speak with its listing agent. That way, you can ask questions and learn more about the residence before you make an offer.
2. Comparables Are Irrelevant
When you buy a traditional home, your real estate agent may present you with comparables (also known as comps) from the area. These help you ensure you’re not overpaying for a property. However, with luxury home purchases, comps are almost completely irrelevant. This is because luxury residences typically have many custom features and finishes that are not standard in any sense. Therefore, it’s unlikely that you’ll find a similar property in the area to compare the price to.
3. Due Diligence is Necessary
When you buy a luxury home, you and your real estate agent must be diligent throughout the entire transaction process. There is no substitute for careful research before making an investment as large as a luxury property. Therefore, once you’ve found a home you like, you should complete a title search and review the home inspection report. This will ensure that your expectations are met, and you don’t run into any surprises after the transaction is complete.
4. Consider the Surrounding Area
Before bidding on a luxury home, you should explore the neighborhood in which you might live. The property may appear to be perfect, but you still must consider whether or not you’ll be happy spending time in the surrounding area. Are there suitable schools for your children? Is there a reputable hospital nearby? These are all key questions to ask before you purchase a property.
To determine this, many luxury home buyers ask their agents to provide them with neighborhood reports prior to making an offer. Additionally, you can request a personal tour of the area to ensure it’s right for you.
5. Be Prepared to Face Competition
There are a significant number of people in the market for luxury homes. Therefore, you shouldn’t be surprised if you discover that there is a lot of competition for the property you’re interested in. If you’ll be bidding on the home at auction, have a clear budget in mind and be willing to meet or exceed the highest bidder. As with other types of auctions, expediency is your best friend. Delays could cost you the luxury home of your dreams!
6. Consider Resale Value
A luxury home is an undoubtedly large investment. Therefore, you need to make sure you can recoup your money when it comes time to sell. One of the most important determiners of resale value is the property’s location. Quiet neighborhoods with easy access to grocery stores, schools, and restaurants are the most desirable. The property’s condition will also factor into its resale value, so it’s wise to ask the listing agent for details about the home’s systems. You should ensure that all HVAC, plumbing, and electrical equipment is in good shape before you make an offer.
7. Documentation is Key
When buying a luxury home, you’ll likely be subject to intense vetting and scrutiny. This is because sellers want to ensure they find a highly qualified buyer for their home to avoid any setbacks. Therefore, it’s essential to document all of your financial information before you move forward with a purchase. That way, you can prove your ability to afford a high-end home.
8. You Can (And Should) Schedule a Private Preview
Whether you’re purchasing a luxury property at auction or in a more traditional way, it’s important to see the home in person before making an offer. However, because few luxury homeowners offer open houses, you’ll need to request a private showing through the property’s listing agent. By taking the time to view the residence in person, you can better determine how much you are willing to spend on it.
Interested in Buying Luxury Real Estate? Contact Elite Auctions
Before you can purchase your dream home, you must understand how to buy luxury real estate. Luckily, Elite Auctions is here to help. Our expert team will walk you through the entire auction process from start to finish. For more information about our services, or to speak to a listing agent, contact us today!