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Buying high-end real estate is nothing to be taken lightly. Whether you wish to find a dream house for you and your family or want to buy and then lease the home, you should consider everything carefully, do your research, and go slowly.
Finding the perfect luxury real estate is a bit more difficult than it might seem. Listings are often private, so you’re not very likely to stumble upon the right home online. You also need to consider your preferred location, whether you’ll need a jumbo loan, and you should always keep in mind the potential resale value.
So, let’s take a look at some tips that’ll make the whole process of purchasing high-end real estate a bit easier.
Find a Reliable Real Estate Agent
It’s crucial to find a real estate agent who has experience in the luxury real estate market. Primarily, this is because the luxury market is in a league of its own, and requires some insider knowledge.
You won’t be able to find listings for high-end real estate online or in the papers, as most of them are the so-called “pocket listings”. This means that the listings aren’t advertised to the general public, and the seller’s real estate agent shares that information only with trusted sources.
Your agent will know about properties outside online listings and will help point you in the right direction, showing you other similar properties in the same area, and telling you about any price adjustments, etc.
Get Your Financial Information in Order
Most sellers of high-end real estate will want to see proof that you can afford to buy the property. Some might not enter negotiations or even allow viewings without an indication of your financial situation. This way, they ensure they’re only dealing with serious buyers.
Although it might be uncomfortable sharing your financial situation with strangers, it will make buying luxury real estate easier.
It would be wise to have your current bank statement with you. You can black out your account number and address in the copy you provide to the seller, but make sure your name and the details of the financial institution are clearly visible.
In case you’re taking out a jumbo loan, make sure to get pre-approved. The process of taking out a loan for a luxury home is often longer, and since the sellers are interested only in qualified buyers, having a loan pre-approval can help you immensely.
Consider a Jumbo Loan
Not many people can pay for a luxury home in cash, so if you’ve set your sights on a home that’s over half a million, chances are you’ll need to get a jumbo loan.
Fortunately, jumbo loans have loosened up on the down payment requirements. When it comes to the jumbo VA loan, for example, veterans are required to make a down payment of 25% on any amount over $417,000.
Interest rates on jumbo VA loans are these days on par with conventional mortgages, and sometimes even lower. Just make sure to do your research on any tax breaks that apply on jumbo loans in your area.
Of course, to qualify for a jumbo loan, you’ll need to ensure your credit score is great, typically about 700 and above.
Take Your Time
While you do want to hurry up and get your financial information in order and get pre-approved for a jumbo VA loan, you should take your time to do your research and consider everything before closing the deal. Such huge purchases should never be snap decisions.
Make sure to look into any future building plans in the area, especially if one of the biggest perks of the home you’re interested in is the view. Look into the neighborhood, and consider the possible future resale value.
Luxury homes are exclusive, and there’s less competition, which means you have more time to research other similar properties and more time to negotiate the best deal.
Get Proper Home Inspection
If you’ve found a high-end real estate that you’re seriously considering buying, make sure you get a proper home inspection.
It could prove to be a bit more costly, but if you avoid this, you’re risking buying a beautiful home with some serious problems that might end up costing you a lot more.
When selecting a home inspector, make sure they specialize in luxury homes since they often have sophisticated electronic systems and other amenities that might require great expertise.
Whether you have the cash to spare, or you need to rely on a jumbo VA loan to purchase high-end real estate, never take this decision lightly. Your new luxury home will probably serve you and your family for years to come, so take the time to research your options before you close the deal.