Buying a luxury home is considered by many to be a part of the ultimate American Dream. Many people fantasize about owning a massive home, complete with gleaming crystal chandeliers, designer furniture, plush master bedroom suites, and acres of property to landscape to perfection. The reality is that these homes do exist and can be purchased, but they cost more than the average 3,000 square foot house. People who can afford these homes are not necessarily paying in cash, which is a common misconception. Many luxury homebuyers try to secure loans just like anyone else. In fact, only 31 percent of these buyers pay cash. Luxury real estate purchases take budgeting, careful planning, and, as some real estate agents put it, even more attention to detail than a lower priced home.
Because these homes are priced higher, a buyer will have to put more money down, sometimes as high as 30 percent. Even if a potential buyer comes in with cash that covers the entire purchase price, it does not always give them a guaranteed advantage either. Many cash heavy investors low ball the seller, making a clean offer from a person with a loan look more appealing. This debunks the idea that someone paying cash wins the home over a person who uses a lender to finance. A loan for luxury homes, however, does take more time to secure. The lender evaluates a person’s credit history, employment records, tax returns, and a number of other factors before approving a loan. This process can take upwards of 60 days, delaying the time it takes to buy the house. The elongated time frame needed to obtain a loan could potentially push a seller toward a cash only buyer.
The pressures and minute details associated with buying a luxury home lead about 65 percent of buyers to find a real estate agent to do the brunt of the work. Using an agent who specializes in luxury homes can alleviate complicated negotiations with a seller, and ensure that a buyer is not over paying for a home. These agents understand the market value of the houses in the buyer’s area, and will be able to find the best home to fit a homebuyer’s wish list. For example, many people prefer to spend money on a home with high-tech capabilities and top of the line upgrades. A real estate agent can spend time researching a high end home that fits this criteria, making the process less time consuming.
The dream of buying a luxury home has become a reality for many people around the country and the possibilities are endless. Italian-style villas, old English Victorian estates, and French chateaus are only a few luxury homes that are on the market. Newer homes that feature these classic styles are also available. With so many choices, buyers need to evaluate how much they want to spend, what style of home they prefer, and find a real estate agent that can walk them through the process. The most magnificent houses are not always the most expensive, but rather the ones that have been carefully decorated and styled to create a luxury experience.