Buying Luxury Properties: What You Need to Know

Written by Posted On Wednesday, 27 August 2014 10:40

Across the United States, the sale of luxury homes and condos has increased and hitting new records. Thanks to the many different designs, styles, and sizes that are available for luxury homes, sales in 2013 reached an all-time high in sales of homes priced over $2 million. There are many different reasons for this increase including a better job market, rise in international buyers, and out of the places that have luxury homes, the United States is considered relatively inexpensive. Here are some things that you will need to do or know in order to get best deal on your new luxury home or condo.



Before you can begin to even think about purchasing a luxury home or condo, you need to know what kind of financing you can do. Only around 31% of people pay in cash, and as long as you are making an attractive offer, you can be in equal position with a cash buyer that is offering less than the market value for a home. But, financing for a luxury condo or home can still be difficult. Some things to remember about obtaining a loan for a luxury home or condo:

·         Lenders sometimes will require more than one appraisal

·         Extra documentation requires extended verification periods

·         Bring the following with you when talking to you lender: asset statements, tax returns, employment verification, proof of cash reserves

·         If you own more than 25% of a corporation you will need to show additional documents. This includes: profit/loss statements, k-1s, 1120s, and supporting schedules

It’s also good to remember that even if your finances are in good order, it may take 45 -60 days to secure a loan for your new luxury condo or home. Having your mortgage broker, loan officer, or personal banker obtain your financing approval early on in the process is a good thing and may save you a lot of time.   



As with any real estate purchase it is good to do your research before approaching a real estate agent or going ahead with the buy. In many cases, luxury homes or condos are larger and have amenities that you will need to do further research on. For example, Privé offers many comforts for their residents including: private elevator access, massage rooms, toddlers’ playroom, two-story gym/spa, concierge, and pools. It’s up to you whether or not you think that you would use amenities such as these that are offered at many luxury condos and home complexes. There are many that would find certain amenities frivolous, and others that would use them every day, it all just depends upon your lifestyle. It's always good to search online for different areas within the same city, compare them to each other, determine what you do and don't like about certain places, and bring it all to an experienced real estate agent that can help you find what you are looking for.


Find a Good Real Estate Agent

One of the best things that you can do when searching for a luxury home or condo is to find a qualified real estate agent that knows the luxury market. They may be your best bet on finding the properties that are for sale but are not necessarily easy to find because of privacy because of their inside information and connections. The most important thing that a luxury real estate agent can do for you is determine the market value of a property and tell you if you are paying too much. The real estate agent should be well versed and have much experience in how much luxury properties should cost. Valuing luxury properties can be a challenge since there are usually not similar properties in the area, so the real estate agents knowledge is invaluable. There’s a bonus too! Depending upon their connections, they may know ahead of time if a property is going to be listed and hit the open market, and in return tell you about the property.


Is there anything that I missed? Any other information that you think buyers should know about luxury properties before making a purchase? Leave a comment below, I would love to hear your thoughts.  

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