Things You Should Know Before Buying a Luxury Home

Luxury New Market Realities

1. It's a great time to buy - really! Compared to real estate overall, the high end has seen a resurgence in sales but there is still no shortage of excellent buying opportunities. Equally desirable are interest rates, which even for jumbo loans are exceptionally low.
2. Trading up? Sell low, buy even lower. Even if you have to sell your current home for less than you want, chances are you still come out ahead. "Once you find out what a good deal you might get on your purchase, that big discount on your existing house will be much easier to stomach, " says Paul Boomsma, president of Luxury Portfolio International. Factor in ultra-low interest rates and the prospect of selling low becomes even more palatable.
3. Don't be surprised to discover you are not the only buyer in the marketplace. The opportunity to own a fabulous home for a fraction of the cost of only a few years ago continues to entice consumers worldwide; interest from international buyers in U.S. real estate has never been higher.
4. Multiple offers still happen. Even though there are a large number of homes for sale, really good inventory gets noticed. "When a property is done and priced at the market, it will definitely attract multiple offers and that's very surprising to buyers," says Betty Graham, president of the Coldwell Banker Previews International division for NRT.
5. Not all sellers are desperate. "Distressed sales are part of the market but they are not the whole market," observes Mark Nash, a Coldwell Banker Residential Brokerage agent in Chicago and author of "1,001 Tips for Buying and Selling a Home."
6. Taking a hard line in negotiations isn't always the best strategy; sometimes patience brings a better pay-off. It is important to "give buyers enough time so they will thoughtfully consider your offer," says Graham.
7. Cash is king. One of the biggest changes in the last five years is that more luxury buyers are opting for a cash deal. The motivation is not a lack of available loans; rather, luxury buyers understand they often can negotiate a better deal using cash, observes Joyce Rey, executive director of Coldwell Banker Previews International. "If there are fewer contingencies, then sellers are more likely to accept a lower price."
8. Don't worry if it's a buyer market or a sellers marketing; instead focus on getting a handle on what's happening today in your target location and price range.

Source: Unique Homes by Camilla McLaughlin