TIPS FOR BUYING A LUXURY HOME
A luxury home falls into a category of its own that requires everything associated with that home to be on a high level than ordinary homes. Just because a home is similarly priced to others or is priced “high enough” does not make it a luxury home. When buying a luxury home in order to make your purchase a successful one you should follow the tips laid out below.
ARE YOU FINANCING YOUR LUXURY HOME PURCHASE?
If you intend on financing the purchase of your luxury home it is always best to seek preapproval for your loan. The preapproval process will expedite your ability to buy the luxury home by making sure the sellers know your offer to buy their home is a great one since the preapproval letter you included with the offer shows you can afford to buy their home. Additionally the preapproval process provides great information as to the type of loan you are preapproved for, the down payment that you may need, and how much home you can buy.
Depending on what amount you will want to borrow to purchase your luxury home you may end up needing a Jumbo Mortgage Loan. Borrowing above the conforming limit of $417,000.00 in the Greater Cincinnati area (Ohio, Kentucky, Indiana) requires the use of a jumbo mortgage loan. Some high cost of living counties around the United States have a different limit for their conforming loans that would require the use of a jumbo loan so check with your local mortgage loan officer to see what applies in your area. A jumbo loan is different in that the government sponsored mortgage entities will not purchase these loans so the banks must keep them on their books. While a jumbo loan is no better or worse than a conventional loan due to the fact that banks must keep them on their books (banks can sell them to other banks) banks usually require more stringent lending criteria in terms of credit rating, borrower asset profile, and down payment requirements. Interest rates for jumbo loans are marginally higher (0.5 – 1%) than what would be found in a conventional loan.
WORK WITH A REALTOR TO HELP YOU FIND A LUXURY HOME
The process of finding a luxury home that is the perfect fit for you can be a challenge in and of itself. Try to find that luxury home on your own and you are likely to come up short and will not be able to see everything that is available by shopping only on Zillow. It has been shown time and time again that Zillow is inaccurate as to home values and does not have all the home listings out there. So your best bet is to not limit your home shopping to a site like Zillow and instead work with a real estate agent.
Often times as luxury home buyers are getting ready to sell their home they speak with a real estate agent to get input as to how to prepare their home to best sell. Those sellers are not yet on the market but that does not mean they are not willing to sell to the right buyer. The only way of knowing about that home that is soon to be on the market, be one of the few who gets a preview, and a chance to buy the home before others have a chance is by working with a Realtor.
A Realtor will not only get you setup with a home search that will notify you the instant a new luxury home is listed but they will also know about homes that are coming soon to the market and homes that are ready now but not listed anywhere. Sometimes when dealing with a luxury home, sellers are more interested in discretion and safety rather than letting anyone come through to see their home. Those home sellers who want to sell their home but don’t want to publish the fact to the whole world will instead give their real estate agent a “pocket listing”. A pocket listing is something the agent and homeowner know about but is not available on the MLS nor is it available on some of the common real estate portals. This gives the seller the confidence to know their agent is only bringing through qualified buyers who will treat the seller’s privacy needs with respect. If you are not working with a Realtor then you will miss out on these pocket listings and possibly miss out on getting that dream luxury home you have always wanted.
Additionally a great real estate agent and their team of experts will help you through the home purchase process and make sure things proceed smoothly for you. Your real estate agent will be responsible for getting you into the luxury homes you want to see, offering their expert input on questions you may have about the home purchase process, preparing your offer, negotiating on your behalf and more. Your agent is there to represent your best interests in what will be a large transaction. Due to the large amounts of money involved in purchasing a luxury home the chances of lawsuit if a transaction does go bad are high. By working with professional real estate agents you help ensure the process is smoother and issues are handled appropriately as they come up.
WHAT ELEVATES A HOME INTO LUXURY STATUS
As noted above just because a home is priced high does not necessarily make it a luxury home. Luxury homes are about the location. Usually they are located where other luxury homes are situated in order for each home to support the property value. Luxury homes have extra refinements that put them into a category of their own. Luxury refinements such as the latest and greatest in premium brand smart appliances, cabinetry, carpet, hardwood and tiled floors are expected to be found in a luxury home. The bedrooms and bathrooms will be extra spacious and have large showers along with hot tubs. Luxury homes will have 3 or more car garages and may have separate buildings for uses such as in-law suite, pool house, garden tool storage and more. The landscaping on luxury homes will also be on a level above other homes and usually was professionally done and professionally maintained. Luxury homes will have the latest and greatest in features like smart home technology, green energy, water efficient landscaping and more.
GETTING YOUR LUXURY HOME INSPECTED
Once you have decided on a luxury home to purchase an important part of the process should be having the home inspected. A home inspector will go over various aspects of the home and give you a report as to the condition of the home and its systems. Since your home is a purchase involving a large sum of money and you will be living in that home for some time to come it is best to have it inspected not only to know about what repairs may be needed or what issues may exist but also to get a full understanding of everything in your home. A good home inspector not only inspects your home for issues but also will take the buyers through and educate them on the home in general and how to get maximum life out of home components.
Some savvy sellers may opt for a home inspection prior to listing their home for sale and will have repaired any major issues brought up by the seller home inspection. The sellers may even share with potential buyers their home inspection and the repairs done but that does necessarily mean you should forgo your own home inspection. Certain issues or conditions could have developed after the home inspection and repairs were made. If the repairs were made by a contractor who was not skilled in making the repair then the repair could be faulty or the repair could have caused damaged to some other part of the home. It is always best to have the home you are about to purchase inspected by someone who will represent your best interests.
Purchasing a luxury home represents a large purchase that will house you and your family for a long time to come. By working with a Realtor and having your luxury home inspected you ensure a smoother process in the purchase and successful long term ownership of your home. By getting pre-approved with your mortgage you ensure you will be in the best position to make and offer on a home and have it accepted when you do find the perfect luxury home for you.
This article was originally published on CinciNKYRealEstate.com