Searching for a Luxury Home
- Tap into the network of a recommended Realtor or broker with a specialty in the local, high-end market. Find an agent with the credentials and experience in the local market that can advise on schools, nuances to neighborhoods as well as the property specifics.
- While firms like Christie’s, Sotheby’s and most high-end divisions of the nation’s top realty firms show exclusively listed properties, most agents will be able to show you a property, says Klara Madlin of Klara Madlin Real Estate in New York. “If you have a good broker, they’ll have access to most properties. We all share. Get someone you like and trust as a professional that can steer you through the process.”
- Zero in on your top picks by seeing properties in person because many sellers, protective of their privacy, refrain from putting extensive photos of their homes on the Internet.
Evaluating Luxury Home Prospects
- Schedule detailed property tours. Expect to take a couple of hours to see a larger home to review things like construction methods, architectural highlights, the neighborhood and how the security works, Veissi says. “It’s a much more detailed process and the Realtor is much more involved in the nuances of the property.”
- Address required disclosures. “Each city and county may have its own special requirements for disclosures. While it’s easy to be an agent today, it’s very important they know the local market,” says Fanny Chu of Prudential California Realty in San Francisco. For instance, some municipalities require disclosure on sewer lines, while others, underground oil tanks.
- Examine comparable properties. Obtain pricing information on comparable properties. Financing and making an appropriate offer on the home can hinge on having good data on comparables.
Financing a Luxury Home
- Be prepared with bank statements, W-2s, tax returns from the last couple of years and other financial statements. “Sellers of luxury homes will typically ask their Realtor to bring them only qualified buyers,” says Virginia Cook of Virginia Cook Realtors in Dallas. “This can be different than the typical mortgage prequalification process and could require showing asset statements and demonstrate which assets will go toward the purchase.”
- Have your mortgage broker, loan officer or personal banker obtain your financing approval early on, says Nancy Suvarnamani, president of Century 21 SGR, Inc. in Chicago. She notes the difference between a prequalify letter and a pre-approval letter, the latter which requires extensive documentation and verification. “With a pre-qualify letter, it just provides general information, whereas a pre-approval letter will say the amount you are already pre-approved for and includes much more rigorous financial information.”
- Some types of properties require more in-depth financial review of buyers than others. Housing cooperatives found in large cities like New York and Chicago require the most scrutiny of your personal finances versus a condominium. “After you put down a hefty deposit, you still want to have liquid assets of at least two years of maintenance and mortgage payments,” Madlin says.
- Expect a longer financial approval process. Realtors say even if your financials are in good order, count on 45 to 60 days. “The loan rate lock usually lasts 60 days too without it costing more,” says Elizabeth Blakeslee of Coldwell Banker Residential Brokerage in Washington, D.C.
Making an Offer on a Luxury Home
Don’t Forget the Details
- Never skip the inspection process. From the potentially hazardous to the structural, you always want to know what it is you are buying. Make sure inspections and repairs are made in a timely manner.
- While not required in every state or buying circumstance, a good local real estate attorney can save you a lot of headaches. In Manhattan, for example, real estate brokers can’t write purchase agreements so buyer and seller are required to have attorneys.
- Be prepared for closing costs. Who pays for what varies by the customs of the given market. “It’s the Realtor’s job to tell the buyer what they need to cover, expenses at closing like transfer tax, attorney’s fees, title insurance, etc.,” Suvarnamani says.
When you are putting down this much money on a luxury home, you don’t want just any Realtor. Choose a Realtor who will be your advocate and not just try to “sell a home”. In South Florida, Fred Barboni is this person. He lives in the exclusive neighborhood of Tropic Isle. He knows the intricacies of buying and selling luxury homes first hand and has experience dealing with multimillion-dollar transactions. Fred is the guy who gives real estate agents a good name. He would like to be your advocate.
“The diversification of Fred’s experience and expertise gives him almost unlimited insight and ability to navigate almost any challenge.(testimony from past client)”