Purchasing a luxury home

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Across the country, sales of luxury homes have been hitting records. If you are in the market for a luxury home, here are some things to consider:

You need a qualified Real Estate Agent

If you are in the market for a luxury home, a qualified real estate agent who knows the luxury market may be your best bet for finding properties that are for sale. An experienced agent will be able to help you determine the market value of a luxury property. Real estate is valued using comps (comparables) – similar properties in the area that have recently sold. Valuing luxury properties can be a challenge since it is hard to find “similar” properties.

Financing could take longer

The loan process for luxury homes in the larger mortgages that come along with them typically takes longer than for smaller mortgages. Even if your financials are in good order, it may take and average of 45 to 60 days to secure a loan. Since it can take extra time, and because the seller of a luxury home is often interested in showing only to qualified buyers, many real estate agents recommend having your mortgage broker  obtain your financing approval early on in the process.

Inspections are key

As with any real estate purchase, it is important to do a home inspection. Luxury homes may have amenities that require specialized home inspectors, such as pools, spas, fountains, heated floors, and exterior fireplaces (to name a few).

The bottom line is that a luxury home costs more, therefore, will require more time and attention. If this is your first luxury home purchase, you’ll quickly learn how the process differs from that of purchasing lower priced real estate. From determining how much to offer through the close of escrow, the luxury home purchase is more time consuming and requires much more due diligence than when purchasing in the lower price ranges.

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