Purchasing a Luxury Home: How To Avoid 6 Major Pitfalls

Entering the luxury home market can be an exhilarating experience. Before you get in, though, there are a few things about the search and acquisition process that you need to familiarize yourself with. It can help make the process that much smoother, and that much more profitable.

To begin, it’s important to realize that the luxury marketplace runs to rules that are somewhat different from the market for regular homes. Having a highly qualified real estate agent on your side tends to be far more important in this market. Many of the best homes, for instance, are never even listed. High-end homes often go into private or pocket sales — they sell through exclusive real estate agencies Fulfords.co.uk. If you don’t have one, you’ll miss out.

There are many other areas where being unfamiliar with accepted practice puts you at a disadvantage. It’s important to pay close attention to what your real estate agent tells you, and to go in with a degree of awareness of where the pitfalls are.

Making sure that you get the poker face right

Unlike with regular homes, luxury property tends to come with flexible pricing strategies. Since there aren’t that many luxury homes around, market forces do not play as much of a role as with regular homes. Owners charge whatever think they can get.

This means that keeping a poker face when you tour a home is a good idea — you don’t want to show the owner or his agent how much you love what you’re seeing. Many luxury home buyers make the mistake of betraying how enthusiastic they are, causing sellers become inflexible with their prices.

Some home luxury home buyers take the poker face requirement too far, though. They resolve to show absolutely no interest — to their own real estate agent or the seller. This can be a problem as well, because the parties that deal with you need to know that a buyer is genuinely interested before they will go to the trouble of taking up the deal. You can hurt your chances as a buyer if you aren’t taken seriously. It’s important to strike a balance between too much poker-face, and none at all.

Neglecting to put in a counteroffer

Luxury homes can be hard to sell. Often, sellers who have been through a great deal of back-and-forth on offers and counteroffers are sick of the whole thing. These sellers are usually willing to sell with only one reasonable counteroffer. If a home that you really like seems somewhat outside your range, you should still ask your real estate agent to put in an offer. The seller could be willing to deal with you.

Rejecting anything that isn’t presentable

Real estate agents usually encourage sellers selling with them to stage their homes properly. Most real estate agents do a great job themselves. The idea is that a home that has peeling wallpaper, an old front door and dirty windowpanes will not impress, and will command a lower price. As sensible as this advice is, many sellers simply do not go to the trouble, and will try to sell their property just as it is. As a buyer, you need to be able to look through the superficialities, and identify quality when you see it. If a poorly maintained home is a bargain, you should jump for it.

Not taking title in the correct way

You could be faced with different kinds of tax implication, depending on how you hold title to home. It’s important to talk to a tax advisor prior to the actual sale, so that you can receive advice on how it is to be done.

Not going in ready with cash

Cash rules the luxury real estate market today. If you can possibly manage it, you should attempt to start the process with the money ready in hand, and with no mortgage involved. This will give you the pick of the best properties on the market.

Not being willing to prove your net worth adequately

With some kinds of luxury cars, you can’t even go buy one if you have a suitcase full of money with you to spend. The car manufacturer needs to know that you are a high net worth individual, someone that they would be proud to be associated with. It’s not very different with luxury homes. Sellers often want to see proof of your success before they even talk to you. Usually, a letter from your bank that you have net worth sufficiently high is a requirement.

It’s important to play by the rules of the luxury real estate market. The better you understand it, the more profitable your dealings will be.