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February 7, 2022

Avoid These 5 Mistakes When Buying Luxury Homes

By

Tim Clarke

Avoid These 5 Mistakes When Buying Luxury Homes

Buying a luxury home has several differences than most residential real estate purchases.

The approach to home searching, financing and your agent navigating you through the process is significantly different with luxury homes.

At any rate, it is of no surprise that many first-time luxury home buyers often fall victim to at least one of these five mistakes:


Choosing the Wrong Agent

Beware of newer agents trying to figure out how to become a luxury real estate agent.

Specialty homes require a higher skill set acquired by agents that mostly transact in that particular specialty.

An unqualified agent won’t have the necessary expertise to not only help you find the home best suited for you but to also help you successfully negotiate for the best terms.

Hiring an agent who specializes in luxury home purchases, you have an experienced and skilled resource who knows the market and how to navigate these transactions in your best interests.


Not Clearly Defining Your Goals

Many people have aspirations of  owning a luxury estate but few can actually articulate what specific features they desire in a luxury home.

Before beginning your home search, it is imperative to be clear about your homebuying goals.

This includes (but not limited to) details from amenities to customized floor plans and designs and other details about the community and where the house is positioned within that community. 

Shopping with Your Eyes and Not Your Head

Let’s face it, it's very easy to get overwhelmed by a luxury listing’s features, and these details can easily leave impressions that could deter you from something that could become costly in the future.

To be sure that you can determine if the home will suit your needs, look at each listing objectively.

Keep in mind, remodeling a kitchen is a lot easier than altering the original floorplan. 


Buying Outside of Your Budget

This is a rule with ALL residential real estate purchases.

Don’t fall victim to becoming house poor after such a huge financial commitment.

What is house poor? A person that doesn't have adequate money left after home expenses.

The purchasing and upkeep of a luxury home can be a consistently expensive feat.

Aside from the various costs and fees, these lavish homes require significant capital for décor furnishing and upkeep.

Many sellers won't even consider offers from buyers who cannot show that they can handle the financial responsibilities necessary to upkeep the home.


Blindly Overpaying 

Real estate is a free market. A property is only worth what a buyer is willing to pay for it.

It is not what the seller think its worth (i.e. List Price). This also applies in a seller’s market.

The listing could be over-listed and if you or your agent is unfamiliar with current market values, it may result in overpaying for the home.

Many first-time luxury buyers associate list price with purchase price and assume that there isn’t a negotiated price.

Owning a luxury home is definitely obtainable, but being aware of the pitfalls is paramount. 

Avoid these mistakes by hiring a skilled and experienced luxury real estate agent.

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