From urban penthouses with amazing views to rural equestrian estates, luxury home settings can be beyond spectacular. Right now, the luxury market in our state is full of homes with prices that start just under $1 million to more than $24 million. Prices at the high end of the market, by the way, are rising only half as fast as those in the lower ranges according to a new study, published at Inman.com.
This only makes sense when one takes into account the law of supply and demand. Lower priced homes are at a premium right now and demand is still high. Those shopping for luxury homes can take their time, which is great news. Sure, it may sound trite, but it’s definitely true that now is the time to jump into the luxury home market.
If you’re considering purchasing a high-end home, consider the following:
1.You’ll need to develop a solid plan
Understand what you want in your new home before touring properties. If it’s a view you crave, looking at homes on the flats will be a waste of your time. If you have a particular architectural style in mind, let your agent know so he or she can search strategically. Knowing what you want is half the battle, so get clear on your needs and wants and we can take it from there.
2. Give yourself enough time
Evaluating high-end property isn’t something that should be rushed. Expect to take at least an hour or two to fully tour each home. You’ll want to pay attention to architectural aspects, amenities and, of course, the location.
Take a look at the disclosures about any homes that you’re interested in. Have your agent compile a market analysis, comparing the property you like to others that have sold recently. This way, you’ll know how to structure your offer to purchase and how much to offer.
If you won’t be paying cash for the home, understand that the lending process (see below) is more time consuming than you experienced when you purchased lower priced homes and the home inspection will take longer than it does for more conventional homes.
3. Cash or credit?
If you won’t be paying cash for the home you’ll most likely need to obtain a jumbo loan. Everything about these loans, from the application to the appraisal, takes longer than a standard loan. Be prepared to put down at least 35 and as much as 50 percent of the loan amount as a down payment, hand over volumes of financial paperwork and then “hurry up and wait.”
4. Don’t skip the home inspection
Regardless of how well-maintained the home appears you must have it professionally inspected. While one can never know what lurks behind the walls in a home (without opening them up!) the peace of mind that a professional inspector can provide is priceless.
Home inspections for luxury homes typically take longer and may cost more than a standard inspection. The most obvious reason for this is that high-end homes are larger, with more rooms and more systems. Consider just the HVAC system in a luxury home, for instance. They typically contain numerous systems with multiple zone controls that are quite complex.
A final word of advice: You may start your luxury home search on the Internet, as the majority of home buyers do, but keep in mind that not all luxury homeowners list their homes in the MLS. In fact, many don’t, for a variety of reasons.
We typically have access to even those properties that aren’t formally listed in the MLS, so contact us if there is something particular you have in mind.