The luxury home market is different from the regular real estate marketplace, and if you're in the market to upgrade to a higher-end home, then understanding how the luxury home market works will be crucial to finding and purchasing the home of your dreams. Take a look at some of the real estate tips that you'll need to know when seeking luxury homes for sale.
Know Where to Look
The first thing that you need to know when it comes to purchasing a luxury home is where to look for sales. Often, sellers of high-end homes leave their homes unlisted in order to protect their privacy, so you may not be able to find what you're looking for simply by checking the sale listings on the major real estate sites. These sellers may also eschew open houses in favor of appointment-only meetings with prospective buyers for the same reasons.
Because sellers of luxury homes tend to try selling through their personal connections first, you need to think about engaging a real estate agent who specializes in high-end homes to help you with your search. An agent that's familiar with the local area's high-end market will have the contacts that you will need to find the homes for sale that you're looking for.
Expect Increased Scrutiny
You'll have to document your income in order to purchase any home, but you can expect an increased level of scrutiny when you're purchasing a high-end home. And of course, the more complex your finances, the more difficult it can be to prove that you have the income that your seller and mortgage broker will be looking for.
One way to make this easier is to begin by working with a bank that you already have a relationship with. While you want to shop around for the best mortgage rate, you may find that working with a financial institution that already has your portfolio and is familiar with your financial profile streamlines the mortgage process considerably. You'll save time and aggravation, which might be worth something in and of itself.
Don't be Afraid to Negotiate
Just because you're buying a more expensive property doesn't mean that you can't negotiate to make the deal a little sweeter for yourself. There's always room to negotiate. However, the negotiations might take a somewhat different form when it comes to a luxury property. Instead of asking the seller to knock money off of the price because the roof needs to be replaced, you may find yourself asking the seller to bring down the price because of a custom renovation that you'll want to remove or change.
This can happen because high-end sellers have the means to customize their homes to their particular tastes, but certain renovations decrease the number of buyers willing to make an offer. For example, a property with both an indoor and outdoor pool will only be attractive to someone who's interested in keeping up both of those features or someone who's willing to put the money and work into turning those spaces into something else. If you are in the market for an uncommon home feature or if you're willing to make some renovations to turn the home into what you're looking for, you may be in a better bargaining position.
Don't Neglect to Buy Title Insurance
Title insurance is never a bad idea, but the more valuable the property you buy, the more you want to make sure that your investment is protected. If you're purchasing a luxury home, you need to include title insurance in your budget.
If you're not familiar with it, title insurance protects you from a variety of possible problems with the property, including an undisclosed mortgage, lien, or easement or the lack of participation of a party that should have been included in the sale decision, such as a spouse, an heir, or a corporate officer or business. You can also purchase an extended policy that can protect you from silent liens, pre-existing violations of subdivision laws, or incorrect land surveys, among other things.
A good real estate agent can make the difference between a positive or negative experience when buying your first luxury property. Contact an agent specializing in high-end homes in your area to help guide you through the luxury marketplace.