Chances are that you enjoy the finer things in life if you’re considering how to buy a luxury home. When you have the financial means to enter the luxury real estate market, you have room to dream big, whether you want to purchase a spacious ranch property with lots of acreage or a modern townhome outfitted with the latest smart home amenities.
When entering this highly exclusive market, it's crucial to fully understand the ins and outs of how to buy a luxury home because luxury real estate is an entirely different ball game than the general housing market. Since there are high financial stakes involved, the process can take longer and you'll likely have to jump through more logistical hoops to eventually close on the house you want. Therefore, in your quest to find the home of your dreams, it will be imperative to have a trusted agent who fully understands the local marketplace, and who has experience dealing with high-end sellers.
You’ve worked hard to have the means to afford this milestone, so do yourself a favor and enlist the help of a seasoned real estate agent to find you the luxury home of your dreams. That way, you'll truly feel like there's no place like home every time you walk in the front door.
Plan for a longer buying process
As a luxury home buyer, you’re entering a niche and exclusive market with higher financial stakes. Don't be surprised if the buying process takes longer than it does for an average home buyer. A luxury home is a significant financial investment, so buyers need additional time to evaluate all the home’s features, benefits, and drawbacks before making a purchase. Luxury homes are more customized than standard homes and no two properties will be exactly the same, so think carefully about what features are most important to you in terms of amenities, square footage, outdoor space, etc.
The seller will likely want preliminary assurance of your financial status before even inviting you to view the luxury home, given the higher listing price. Finally, when you are ready to make an offer on a luxury home, you will be subject to even greater verification to determine your financial stability.
While the process may have more steps, the good news is that since you're buying on a high-end market, you'll have fewer competitors since most buyers are priced out of the luxury market. Still, you should research the closing prices on comparable properties so you can compete successfully in a bidding war if one should come along.
In luxury real estate, it's all about who you know
Luxury sellers can be highly private, so many high-end properties are unavailable on the multiple listing service (MLS). You don’t want to miss out on a hidden gem, so leverage your agent's relationships and keep your eyes and ears open for leads.
Explore the neighborhood
Buying a home starts with imagining the life you envision for yourself and your family once you move in. Once you have a general idea in mind, you can begin scouting potential neighborhoods to see if they match the lifestyle you're seeking. It’s sound practice to make a list of your wants and then visit each community in person to see how they stack up, especially if you’re moving to a new city and aren’t totally familiar with the area.
Find a buyer agent you can trust
You're making a significant investment, so don't hesitate to ask the agent for client references and contact them about their experiences.
It is important to vet your agent thoroughly to ensure they have a high success rate in securing the best deals for their clients since you are dealing with a higher dollar amount in the luxury market. If your agent doesn't have experience, you can lose a lot of money at the negotiating table.
As the same rules do not always govern luxury sales as other sales, agents must understand the nuances of this niche market to thrive in it. A high-end agent should have experience handling public and private transactions because many luxury real estate transactions occur off-market.
Work with a bank that knows your financial story
Because you’re purchasing a luxury home, the seller will likely want a bank statement, especially if you’re buying the home in cash. It’s best to work with a bank you have a prior relationship with since they likely have your existing portfolio on file.
Photos are no substitute for an on-site visit
A picture is worth a thousand words, but when it comes to luxury real estate, photos rarely do the place justice since they tend to distort the image quality of larger homes. To truly experience what it's like to live in the space, visit the property in-person and walk through all the rooms and outdoor areas to see if the property has exactly what you’re looking for in a home.
Just be aware that luxury properties are less likely to be open for public viewing, so you may need to schedule an appointment to visit the home.
Are you searching for luxury homes for sale?
Buying a luxury home is a significant investment, so when you’re ready to start your homebuyer journey, enlist the services of Mary Ann Teixeira to help show you how to buy a luxury home