Buying a luxury property is a more complex process than buying a regular home. There are six steps to take to ensure a successful transaction that I want to share today.
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What’s different about purchasing a luxury property versus purchasing a regular property? There are several steps you need to consider to ensure a successful transaction.
The first is establishing a great search process. You need to define how you plan on finding these types of properties because, oftentimes, they’re not even on the market—they may be pocket listed. You not only need MLS and Internet access, but also access to private networks of properties through a variety of sources.
The second step is finding the right set of reliable photos. Typically with luxury properties, the property itself doesn’t encompass just one building, but several. It might be an estate, for example, with grounds involved and amenities (helicopter pad, vineyard, multi-car garage, etc.) that are hard to photograph in their proper context. Furthermore, there may not be many photos available due to privacy restrictions, so the more photography you can access, the better. That’s the best way to know that the luxury home you’re looking at matches your needs.
Step number three is to ensure you have the right types of documentation. There’s not only a standardized purchase agreement you can use, but you have to account for all the upgrades that could happen with a property if there’s work that has been done recently, like renovations or additions. You’ll want to track whether there is appropriate permitting involved in these processes.
Buying a luxury property is more complex than buying a regular home.
Step four is to find the right team of advisors. With luxury properties, there’s a complexity that doesn’t exist with traditional transactions. In this case, a real estate agent will also work exclusively with a family office, a financial planner, a corporate attorney, a family trust, and any number of other intermediaries. Having the right team in place and having them work in harmony will carry itself in spades and make the transaction that much smoother.
Step five is to look to the future. Know that in buying a luxury property, oftentimes, it won’t just appraise like a standard home because there is no inventory to compare it to. By looking into the future, you’re making sure that your asset will continue to gain value and that there are other comparables to work off of.
Lastly, remember that there is usually room to negotiate. I’ve seen luxury properties listed between $30 million and $50 million sell for 10% to 20% less than their asking price. That’s millions of dollars of discounting achieved through effective negotiating.
There are a number of other tips and trends that we can share when it comes to buying a luxury property. If you have any questions regarding this topic or are interested in buying or selling a home, don’t hesitate to reach out to me. Looking forward to connecting with you soon!
