How is buying a luxury home different than buying a starter home or other residential property?
I’ll go over a few points for you today.
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When you buy a luxury home, it’s a little different from buying a regular or starter home. There are several steps for you to consider.
First, you need to define your search process. Luxury properties are not always listed on the market; they are often pocket listings. So, it’s important to make sure that you have access to a private network of pocket listing properties in addition to the traditional MLS access.
Next, you need to find a reliable set of property photos. Luxury properties often have more than one building. You need photos of the grounds and other amenities, like a helicopter pad, vineyard, or multi-car garage. Many luxury properties don’t have as many listing photos for privacy purposes, but you want that kind of access upfront to make sure that the home will meet your needs. The more photographs you have access to, the better.
You will also need the right type of documentation. Not only will you need a standardized purchase agreement, but you may also need paperwork for all of the upgrades that could happen with the property. If there is work that has been done recently or if you are planning on making renovations or making additions to new buildings, make sure that you have the proper permits lined up.
It’s incredibly important that you find the right team of advisors to lead you through the luxury property purchasing process. There is a complexity in these transactions that is not present in the typical real estate transaction. Your real estate team needs to be able to work with your financial planner, family trust, attorney, and more. Having the right team in place will allow you to have a smooth transaction.
LUXURY PROPERTIES ARE LIKE SNOWFLAKES; THEY ARE INCREDIBLY UNIQUE.
Remember to look to the future. When you buy a luxury property, it won’t appraise like a standard home because there won’t be many homes like it on the market. Luxury properties are like snowflakes; they are extremely unique. You have to take that into consideration to make sure that your asset will continue to gain value in the market. Try to find comparable properties to work off of.
Knowing that your luxury property will be unique, it’s important to keep in mind that there will be room to negotiate. I have seen $50 million properties sell for 20% less than the asking price. Effective negotiating can save you millions of dollars, which is much different than the typical transaction.
There are a number of differences between buying a regular home and buying a luxury home, so I wanted to give you a brief example of what buying a luxury home looks like. If you would like to know more details, please don’t hesitate to reach out to me. I would be happy to help you!