Shopping for luxury real estate requires a slightly different tack. From searching for properties to evaluating value, negotiating the deal and financing, every step of the process is just a little bit different.
The more familiar you are with the nuances of buying a luxury home the happier you’ll be with your investment.
Not just any agent will do
Finding the right realtor can make or break your luxury home search. Here are 3 boxes to check before you hire an agent:
- Considerable experience in the luxury real estate market
- A minimum of 2 referrals from past high-end clients
- Is located in the area where you wish to buy
An agent who is plugged in to the price bracket and market where you wish to buy will be better equipped to evaluate a home’s value vs. listing price and be able to let you in on undisclosed “pocket listings.”
Pocket listings are homes for sale that never officially hit the market. If your agent isn’t connected to the right people, they won’t be able to let you in on pocket listings.
Sellers aren’t always motivated
High-end homes typically stay on the market longer than standard properties. Unlike a regular listing that can “go stale” after a few months, there’s less of a stigma placed on luxury houses that don’t sell right away.
In many cases, owners are not necessarily motivated financially to sell– even to the extent that they will turn down reasonable offers to wait for the “right” buyer. There’s no reason to believe that there’s something wrong with a house that’s been on the market for a long time. Nor should you presume that the owner might be getting desperate.
Get your documents in order
The application process for jumbo home loans can take up to 60 days for final approval. If you plan on financing, pre-approval is a better way to go.
In fact, many listings won’t allow viewings until the prospective buyer provides proof that they are financially capable of purchasing the home.
Valuation is tricky
Luxury homes are appraised on intangible qualities so it’s not always easy to know how much a specific view, location or feature is worth. To complicate things, the unique nature of these properties leads to a dearth of comparables when evaluating for value. This is why you must hire a team of advisers you can truly trust – and who have extensive experience in the local market.
Take your time
There is a lot less competition in the high-end market and the buying process is slower. You needn’t worry about pulling the trigger “before someone else does.” Be patient and wait until you are 100% certain you’ve found the house that’s right for you.
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