Whether it’s your first time or the tenth, buying luxury property is always an important decision. You may want to enjoy the property or buy it as a pure investment. Or, maybe you want to use it as a store of value and gain leverage. Either way, you need to take your time and be careful so you don’t make crucial mistakes. The good news is that many have made those mistakes before you, so you won’t have to commit them yourself. Here are some crucial mistakes to avoid when buying a luxury home.
Not Being Pre-Approved for a Mortgage
One of the mistakes when buying a luxury property is coming in without being pre-approved for a mortgage. You also don’t want to mistake pre-qualification with pre-approval either. Pre-qualification will give you an indication of how much you can qualify for, while pre-approval basically makes you a cash buyer. This will allow you to enter into negotiations with sellers more easily.
Not Working with the Right Broker
You could go with any broker when buying a luxury property, but for this type of mortgage, you might have to go with a company that is familiar with buyers looking for a large mortgage. Specialists in large mortgages have the expertise needed for a larger scope and access to a deeper pool of lenders. This translates to better rates for you and a smoother buying process as well.
Letting First Impressions Sway You
You cannot afford to get sentimental when buying a luxury property. This means that you don’t want to put too much stock in first impressions. That goes whether it was a positive or negative one.
You might not trust a seller or question their lifestyle, for instance, or you might not particularly like the decor choices, but you still have to scratch beneath the surface. You might be closer than you think to turning this mess into the house of your dreams.
You have to assess the costs of refurbishing the property and the location as well. You could be looking at a great deal with all things considered. Likewise, don’t fall for a property just because it’s pretty, as you might get a few ugly surprises at inspection.
Making Offers Based on Asking Price
This is one of the worst mistakes that you can make. You should never make offers based on the asking price, but rather you should use the market value. Ask your agent for a comparative market analysis. This is the only way to know the real market value of your house and avoid overpaying. You want to know how much comparable houses have sold for in the area and how long it took. Any big discrepancies between the asking price and market value should raise red flags.
These are all mistakes that you should avoid when on the market for luxury property. Don’t hesitate to ask your agent if you have any questions and learn as much as you can to be prepared for any scenario.