Does your checklist for buying a property include a posh unit on one of the top floors of a skyscraper complete with a round-the-clock concierge and 360-degree views of the area below? If yes, then, you might want to look into some luxury real estate properties.
While the process of buying high-end properties is just similar to buying cheaper average homes, there are several traps that you need to avoid at all costs to prevent costly mistakes in the end.
Lack of Preapproval for Financing
Despite all the common misconceptions, only a handful of luxury homebuyers pay in cold cash in reality. Meanwhile, the rest of the homebuyers need to rely on financing. Sellers in the luxury market might restrict showings to people who are already preapproved.
This is why it is a must to obtain a mortgage preapproval first that often takes anywhere around 45 to 60 days. It is an important thing to do before looking for a luxury penthouse, loft, condo, or apartment.
Lack of Preparation
With the purchasing process a bit more detailed when it comes to luxury real estate, it might be necessary for you to provide additional information. It is common for both lenders and sellers to inquire about your current assets, line of work, and statements from accountants to confirm that your means are sufficient enough to be considered as a potential buyer. Be ready to present such documentation to score the deal.
Not Considering Down Payment and Taxes
Even people who are hoping to buy luxury real estate must set a budget. This budget must not just include the home’s list price but also the property taxes.
You also need to understand that the down payments required here will also be higher, and it is also likely that there will be different requirements for home insurance.
These factors will all affect your budget for the purchase and even your monthly payments and approval amount.
When it comes to buying luxury properties, nothing is as important as market research. As a buyer, you need to ensure that the asking and appraisal prices are in line with the present luxury market in the particular area. Buyers must plan to hire a trusted home inspector knowledgeable of the area to conduct a professional home inspection.
The traditional housing market is not the same as the luxury property market. It means that your usual run-of-the-mill realtor may still lack the experience necessary to guide you in your search for the best luxury real estate in your target location.
A qualified real estate agent who specializes in such properties in the area understands and is familiar with the valuations of high-end properties. Through their experience and knowledge, they can help you find suitable luxury property for your needs, discuss the amenities of each property, and guide you during high-priced negotiations.
Make sure you stay away from these pitfalls to ensure that you will be making the right decision when shopping for luxury real estate properties.