Owning luxury property takes a bit more time and a different approach than it would if you were buying a typical home. Luxury properties require a separate vetting process for financing and viewing and will often mean having an “in” that will be able to locate homes sold in a specific price range. If this is your first time considering a luxury property, you’ll get value from the following tips from real estate experts working in this niche market.
Work with an experienced real estate agent who knows the luxury home market
If you are searching for a home, you’ll find plenty with some keyword searches on the internet. In fact, you’ll be able to quickly find homes that fit your specifications and narrow them down to ones in areas you wish to relocate to within a few moments. With this sort of technology, you might be under the impression that a real estate agent for a buyer is no longer necessary. But nothing could be further from the truth. And when it comes to finding luxury property, a real estate agent that knows this niche market is a must.
Many luxury and ultra-luxury properties bought and sold are not listed publicly for sale. The sellers are many times higher profile individuals in their communities and wish to have their privacy protected. These homes will not be on the MLS but will be viewed and ultimately sold via word of mouth.
This means you need a real estate agent who knows your area's luxury real estate market. A luxury real estate agent will have spent years building and developing relationships with buyers and sellers within this niche and the professionals accompanying this market. Strong relationships with local bankers and contractors are a must for these agents, as they can tap into private listings.
Don’t settle on any agent when it comes time to buy a luxury home. When interviewing potential agents for your purchase, make sure that they are well-versed in the luxury market before committing.
Get your finances in order
An important tip on buying luxury properties that might get overlooked is how your finances should be presented. Your real estate agent and mortgage broker will need to know that you can easily afford any home you are looking for. This is especially important with off-market properties. The sellers will want to ensure that anyone touring their home has been properly vetted.
If you are wondering how to buy luxury property, first meet with a mortgage broker. They will use your income verification (tax returns and W2s) and a current credit report to determine your debt-to-income ratio. This number shows how much house you can afford and is your first step to pre-approval.
Your broker will generate a pre-approval letter for that amount. After you give this to your agent, they will use that letter to show sellers’ agents that you are financially capable of purchasing the properties that they represent.
Some luxury home sales are paid for with cash, making a mortgage broker unnecessary. But if this is the case, you will still need to prove that you have the money for the transaction. Your banker or investment advisor can provide you with this proof. A signed letter from them and accompanying current financial statements will be all you need to show your agent and the sellers’ agents.
Know what need
The fun part begins once you have settled on your agent and have proof of financial ability available. But how to buy luxury property will take some planning at this stage. Research your needs/wants for your future home and which neighborhoods would be the perfect fit for your lifestyle.
Begin with the home itself. List the must-haves first, beginning with the number of bedrooms and bathrooms. Then, move on to the indoor and outdoor amenities you require of any prospective new home. A fully finished basement? Indoor sauna? Ornate woodwork? Be sure you separate the must-haves from the wants.
Do you need to have a home with a pool? Is a lawn that has already been professionally landscaped a must? What about mature trees? When your list is complete, your real estate agent will have a great place to begin their search for you.
Next, consider where you’d like to live. Do you want a luxury mansion in a historic neighborhood? Or perhaps you have always enjoyed the privacy and seclusion of a private estate. Some seeking luxury property will do so in country club neighborhoods so their new home has a built-in community ready to welcome them.
Be sure to communicate your needs and wants to your luxury real estate agent from the beginning of the search so that time is well spent. Before you know it, you’ll find the luxury home you’ve always wanted and will be preparing to make an offer.
Ready to start your search?
The decision to buy any property should take careful planning and consideration. Buying a luxury property will require an even more in-depth skill set that only a real estate agent with luxury home experience will possess. The agents at The Sharma Group
have decades of combined experience in this niche market to help you secure the home of your dreams, whether listed or sold off-market. Consider a consultation with them today before you make your next move!
*Header photo courtesy of The Sharma Group