8 Tips for Buying a Luxury Home
8 Tips For Buying a Luxury Home
If you’re looking to be buying a luxury home, you aren’t merely looking to buy an “expensive house”.
You are looking at the crème de la crème of housing in an exclusive area.
Luxury homes have the most impressive architecture, best-looking landscaping, finest finishes and state-of-the-art appliances.
And they will undoubtedly provide ample space for your family and your fleet of vehicles too!
Buying a luxury home can truly provide a wonderful living environment in style for years to come.
Thus, needless to say, it is worth using the utmost care when actually buying a luxury home!
You want to make sure it’s the right investment for you and your family into the future!
Here are eight tips for ensuring peace of mind when buying a luxury home:
Buying a Luxury Home Tip #1 – Enlist the right real estate agent
First things first, you need to team up with the right real estate agent!
What does the “right agent” look like?
(1) The right real estate agent for you has experience and has shown good results in the luxury property market!
Past performance really matters! You want to make sure you’re being properly taken care of!
After all, this market is in a league of its own, and just because an agent has had success in a mid-range housing market doesn’t mean the agent will necessarily know the ropes in this unique sector of the real estate industry.
The right agent will have no problems furnishing you with raving testimonials of satisfied luxury market clients!
(2) The right agent for you not only knows luxury real estate, but s/he knows the area and the property in which you are interested.
The agent will be able to give you options and let you know what other similar-looking properties are on sale in the area, how long they’ve been on the market (Days On Market a.k.a. DOM), price adjustments and any other real estate data you desire!
A lot of times, the agent will be aware of so-called pocket listings or properties which are for sale but not publicly advertised. Here you think to you’re aware of all the available luxury homes on the market, and suddenly, a number more appear like magic!
(3) The right agent for you will have his or her own luxury website which clearly states their area of expertise or specialization i.e. “luxury homes for sale”.
(4) Immensely important is that the right agent for you will have a great network of peers and luxury home sellers.
As mentioned in the second tip, the agent will have knowledge beyond the online listings. This is where past performance becomes so important! S/he will be able to point you in the right direction no matter what specifics you are looking for.
(5) The right agent for you will be good at keeping your confidentiality as a priority.
Any information you are required to disclose will be completely appropriate and not be probing.
Remember, a good estate agent doesn’t make your decisions for you.
What s/he will do, is equip you with the correct information and professional advice so you can make a decision YOU are thoroughly happy with!
And the agent will save you time and money in the process!
Buying a Luxury Home Tip #2 – Mastering the financial considerations
The figures involved in buying a luxury home are substantial.
So, you will want to make sure you cover all your bases when it comes to all related financial matters.
Some sellers will want to have an indication of your financial situation before they enter negotiations or even allow viewings!
(This might be in the form of pre-approval from the bank or a letter of reference from your portfolio manager)
When it comes time to make the offer, some sellers will want you to verify that you have funds available to make the purchase and may ask for a bank statement.
Here are some tips for you for this:
- Make sure the statement is current and displays the details of the financial institution, and your name as well.
- You should redact your current address and your account number by blacking out these details on the copy you hand over.
Many buyers of luxury homes are in a comfortable position to consider whether to take a home loan or just pay it all in cash.
Although, there are some circumstances in which taking a loan is the right decision; a cash purchase is most often preferable for obvious reasons.
It is helpful to research the tax laws in the region in which you are buying, and obviously becomes even more relevant when crossing borders to buy in another country altogether!
You don’t want to have any upsets further down the line.
It is a good idea to expand your team when buying a luxury house, so work with a good real estate agent, a trusted financial advisor, an experienced accountant, and a lawyer who is familiar with local tax and property law.
Too many a deal that didn’t make it to the final finish line because of a ‘hiccup‘ in the above-mentioned composition of supposed professionals.
Believe me when I say that the right team will ensure that all your paperwork is in order!
Buying a Luxury Home Tip #3 – Know what you want ahead of time
While you will be working with a good team in making the move to your new luxury home, this does not negate the fact that the choice of home is completely yours.
The house must be a good fit for you and your family.
Sounds simple, doesn’t it?!
Without going into too much detail, before you get into a situation of liking two potential properties and aren’t sure which is the right one for you, try to map out your tastes and lifestyle beforehand.
- Which property will be best for my family and me?
- Which one affords me the quality of life I am looking for?
- Which one suits my tastes and those of my family?
Buying a Luxury Home Tip #4 – Do take your time
There are many reasons why buying a luxury home should never be a snap decision.
For one, you should never take any investment of this magnitude lightly!
Recently, this quote made me think twice: “We don’t buy things with money. We buy them with the hours of our lives.”
And it’s true, isn’t it?!
You don’t want to close any deal sitting in the multiple millions, only to have buyer remorse afterwards.
Sadly, some rush through the process only to face a level of disappointment in the end.
Because these buyers have not understood the differences between the top-end housing market and the lower tiers of housing.
One major difference is that there is far less competition in the luxury range of houses.
These homes are exclusive, which means that there will be only a handful of serious offers.
And, less buyer competition might work in your favour when buying a luxury home.
After all, it means that you can take your time and try to negotiate the best deal!
However, it is essential that you do your homework on the luxury home you are looking to buy.
And please, take the time to research the location!
It wouldn’t be the first time that an exquisite property with the most amazing views suddenly sees another development popping up in front of it!
Bye-bye stunning views!
Caveat emptor! Buyer beware!
Buying a Luxury Home Tip #5 – A picture’s only a 1,000 words
It doesn’t matter how good the photos and video walkthrough are on the website, or how glossy the fancy brochure is.
They’re more than likely professional photographs and will have been staged (plus post-shoot edited) to draw the attention of as many interested buyers as possible!
While I’m sure you can buy a house sight unseen, you really can’t get a feel for the luxury home unless you go there yourself.
Heck, it is a good idea to go more than once, and at different times of the day if possible!
Even if you have to travel in from abroad, it will be worth it to you to ensure the locale is a good fit for you.
Perhaps it might even be beneficial to stay over in a nearby hotel to see how you feel about the surroundings in the vicinity of the luxury home you are looking to buy.
Another caveat of going by online listings alone is that some sellers like to keep their sale confidential (‘pocket listings’ as mentioned earlier).
In these cases, you will miss out on some great prospective properties if you only look at website listings.
Buying a Luxury Home Tip #6 – Familiarize yourself with the area
Wrapped up in this major investment of buying a luxury home is the status of the area in which the home is situated.
Remember the old real estate adage of ‘location, location, location’?
The value of your investment is intrinsically linked to the well-being of the location, so get as much information as you can about the surroundings.
Besides doing a proper market research of activity nearby, if possible, try to get a comparable market analysis of similarly-priced homes which offer likewise features.
Your real estate agent should be a great help with this as well.
Be vocal – ask him/her what the future of the area looks like, which is especially true if a main feature of the property is a gorgeous view!
Make sure that there are no new developments or high-rises slated for the area, which could potentially block the view down the line.
Don’t leave any room for doubt and you’ll be glad you did!
Buying a Luxury Home Tip #7 – Home inspection definitely matters
Luxury homes are in their own league when it comes to its high-end appliances, newest technologies and advanced home security systems.
You will need home inspectors who are clued up on the top-of-the-range home features, as your average home inspector is likely to be unqualified for this.
Besides uncovering potential defects, the home inspection will also reveal recommended maintenance and upgrades for your future stay in your amazing new luxury home.
Remember the sale of Candy Spelling’s Holmby Hills mansion for a near all-time record price of $85 million in 2011?
The buyer, Petra Ecclestone, hired a team of forensic scientists to check the property for mold (95 samples were collected and tested right on the spot).
Buying a Luxury Home Tip #8 – Keep an eye on resale value
Although it is right to choose according to your tastes, it is well worth remembering that the house will be up for resale at some point in the future.
For example, you may choose a home decked out with elaborate Eastern ornamentation. Or, avant-garde architectural features, which might be exactly the finishes you are looking for!
However, that won’t appeal to every (future) buyer of your luxury home!
Having said that, should that stop you from spending your hard-earned money on something you want today?
Not at all, but one needs to remain aware of the impact of some of those features on potential future resale values!
Spare a thought for what the house may be worth to the next potential buyer – even if that only takes place a generation from now.
Even a fractional cut in the future asking price can be hefty in this price bracket.
In the end, there is one big rule one ought to keep in mind, which applies across the board in real estate:
That is, you should avoid buying the biggest and best house in the neighbourhood.
It will invariably lead to a lower return on your significant investment, so rather leave room for growth and improvement!
Other Buying Luxury Home Resources:
- Smart Tips For Buying a Luxury Home via Paul Sian
- Don’t Get Emotional When Buying a Home via Maximum Real Estate Exposure
- Great Luxury Home Buying Tips To Know via Ryan Fitzgerald
— Xavier De Buck (@XavierDeBuck) July 18, 2017
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About the author: The above article “Tips For Buying a Luxury Home” was written by Xavier De Buck, your top-producing Johannesburg real estate agent with the Luxury Portfolio team of Chas Everitt International Group. Xavier has been nationally recognized and awarded for providing service excellence, exceptional property sales, whilst exhibiting the highest level of professionalism. With over 15 years combined experience as a real estate agent and real estate investor, if you’re thinking of buying or selling luxury real estate in Johannesburg, Xavier would love to share his property knowledge and expertise.
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