Buying a luxury home is a completely different process than buying a traditional home in a middle-class neighborhood. Then again, some of the same rules apply. But when more money and a bigger property are at stake, the risk and potential rewards get magnified.
If you keep these 10 things in mind when buying a luxury home, you’ll be in good shape. If you don’t, you could end up with a high-priced home that you can’t really live with.
1. It’s about more than bedrooms and bathrooms. Luxury homes come with a lifestyle attached. It’s a country-estate lifestyle or a gated-oasis lifestyle. Or it’s the lifestyle of someone who either wants seclusion or wants to show off. Be ready for what people will think about you — and for the realities of living in what some would call a mansion.
2. You should really keep your emotions in check. Whether it’s fear, guilt, excitement or greed, emotions aren’t the friend of a homebuyer. Look at tax implications of the home and other legal obligations, especially if your luxury home is a second residence. You need to balance emotions with what your business sense tells you.
3. Cash changes everything. If you can afford to make a cash deal, all the rules change. Cash talks in the luxury home market just as it does in many other kinds of transactions. Mortgage rates don’t matter, and proof of cash proves you’re serious about making a quick and simple deal.
4. You give up some things. If you move to a country estate or a gated home, you may have to give up walks around the neighborhood, chats over the back fence and perhaps quick trips to the corner store. And there’s almost never a McDonald’s around the corner from a luxury home.
5. Choosing a broker matters more. If you can afford a luxury home, you’re at the top of your game. Choose a broker who’s at the top of his or her game too. Select someone who knows the neighborhood and the market. And since you’ll be generating the agent a huge commission, expect to get some premium-level service in exchange.
6. You may have to prove you have money to even see any properties. Luxury home owners don’t like casual visitors, so you may have to prove you can afford the house before you even get a glimpse of it.
7. Laws aren’t the same everywhere. If you’re moving out of state, have your agent explain the buying process to you. It’s not the same everywhere, and big luxury home transactions may involve transfer taxes and disclosures that you haven’t dealt with before.
8. It’s best to consider a home’s relationship to your work. Settling for a small home near your work may give you a better quality of life than having to drive through rush hour to reach your oasis in an posh area.
9. You can change most things. You can put in a bigger pool, remove the dated décor and redo the landscaping. But if the house in an inconvenient, windy and isolated location, you can’t change that, so buy based on where a house is rather than just on how nice it is.
10. The basics still matter. A high price doesn’t always mean high quality. Check the energy efficiency, ventilation, structural integrity and foundation to make sure it’s a sound house.